California State Budget Proposal for 2018-2019 January 24, 2018 Legislative Update 978 Governor Brown released his state budget proposal for the 2018-2019 fiscal year. General Fund revenues are up $5.9 billion as compared to the 2017 Budget Act. Because of a "healthy, one-time surplus" the Administration proposes to fund several key priorities including: A $3.5B supplemental deposit to fully fund the state's Rainy Day Fund (established by Prop.2) bringing fund total to $13.5B. A full implementation of the Local Control Funding Formula with $3B in new funding for K-12 schools. Additional funding for an online community college to provide opportunities for Californians to improve their work skills and prospects. The Administration has sustained its commitment to maintain Proposition 56 funding to provide supplemental payments for Medi-Cal providers in the 2018-19 budget. The Governor's Budget includes $2 billion ($650 million state funds plus a federal match) for provider payments, with $1.3 billion ($417 million state funds plus a federal match) earmarked for physicians. Overall Medi-Cal General Fund expenditures are expected to total $21.6 billion in 2018-19, an 11-percent increase from 2017-18, while caseload remains relatively flat at 13.5 million beneficiaries. Bottom line: $2B for provider payments and $1.3B for physician payments. Now that the Governor has released his proposal, the budget subcommittees in both houses of the Legislature will hold hearings over the next few months to deliberate the issues. CMA and LACMA will be active in advocating for our budget priorities, including the full restoration of Proposition 56 GME funding. Additional information will be provided as it becomes available.