On Monday, the California Legislature passed a balanced budget for fiscal year 2020-2021, rejecting many of the health care cuts proposed by Governor Gavin Newsom in his May Revise budget proposal.

California began 2020 with a strong economy, historic reserves, a structurally balanced budget and a projected surplus of $5.6 billion. However, California is facing a $54.3 billion budget deficit due precipitous state revenue declines and caseload increases due to the COVID-19 pandemic.

Gov. Newsom had proposed sweeping the health care funding made possible by the Proposition 56 tobacco tax, and instead using it to address the looming budget deficit. The state Legislature rejected that plan, and fully restored the tobacco tax funds, including the funding for existing supplemental Medi-Cal payments and the CalHealthCares loan repayment program.

The governor’s proposed spending plan made programmatic cuts pre-emptively, with restorations of those same programs if federal funding assistance was realized. In contrast, the Legislature opted to continue programs put in place last year, with a different set of funding mechanisms triggered after September 1 if federal funding is not realized. Most importantly, even absent federal funding there would NOT be cuts to vital health care programs under the Legislature’s budget. The Legislature is committed to investments that improve meaningful access to care by increasing the number of physicians caring for Medi-Cal patients. 

"This budget helps ensure that Californians, regardless of income, can have access to the health care they need during these unprecedented times. This budget also maintains important investments to ensure California has the health care professionals our state needs now, and in the future," said California Medical Association (CMA) President Peter N. Bretan, Jr. M.D. "This plan is compassionate, rational and balanced. It protects adult dental coverage and diabetes prevention program services for low-income patients and maintains the expansion of postpartum mental health services for women diagnosed with a maternal mental health condition."

The main budget bill (SB 74) now heads to the Governor for his consideration and signature. The budget negotiations are still ongoing as there are some final details being ironed out between the Legislature and the Governor. It is likely that the spending plan will be amended by a budget junior bill in the coming weeks, to include additional  details negotiated in conjunction with the Governor’s office.

CMA will remain vigilant throughout the remainder of the budget process, working to ensure that maintaining and expanding access to health care remains a priority in California’s spending plan, and that Proposition 56 investments remain in place.

Take Action!

CMA is asking physicians to contact the governor’s office today and urge him to protect vital services for those who need them most and continue to invest in health care in the midst of this pandemic.