Summary of the Enacted 2020-21 Budget: Impact on California’s Older Adults, People with Disabilities, and Family Caregivers

On June 29, 2020, California Governor Gavin Newsom signed California’s 2020-21 budget. The budget addresses the $54.3 billion deficit while maintaining funding for critical programs serving older adults, people with disabilities, and family caregivers.

Overview

On June 29, 2020, Governor Gavin Newsom signed the 2020-21 budget, addressing the $54.3 billion deficit brought on by the coronavirus (COVID-19) crisis. The enacted budget rejected a number of proposed cuts outlined in the May Revision, including those impacting older adults, people with disabilities, and caregivers.¹ Additionally, Governor Newsom issued a budget emergency proclamation on June 25, making additional funds available through the state’s rainy day fund.² Overall, the budget reflects total General Fund (GF) resources of $139.7 billion and anticipated expenditures of $133.9 billion.¹

The enacted budget used a range of approaches to close the deficit, including program reduction, use of state reserves and federal funding for COVID-19 relief and withdrawal of several proposals in the January budget. The enacted budget includes $11.1 billion in reductions and deferrals that will be restored if at least $14 billion in federal funds are received by October 15, 2020. The triggered reductions and deferrals included funding for education, state employee compensation, courts, moderate-income housing, and more.¹

In the May Revision, the governor proposed eliminating the Community-Based Adult Services (CBAS) and Multipurpose Senior Services Program (MSSP), along with cuts to In-Home Supportive Services (IHSS), certain Medi-Cal optional benefits, and Proposition 56 provider rate increases. The Legislature disagreed, and worked out an agreement with the governor to preserve funding in the 2020-21 budget for these and other critical programs serving and supporting older adults, people with disabilities, and their caregivers.¹

In normal budget years, state tax collection is completed April 15, prior to the enactment of the budget. The governor uses the May Revision to adjust the state spending plan to reflect actual tax receipts. During the COVID-19 crisis, the tax deadline was extended to July 15. While it is unlikely that any major changes will be made to this budget  agreement, there is a possibility that state leaders may want to discuss budget adjustments in August to reflect the actual tax revenue collected. It is also possible that Congress and the president will act on the next COVID-19 relief bill by the end of July to provide a basis for further state budget discussions.

Looking forward, the deficit for 2021-22 is forecasted at $8.7 billion, which presents a continued threat in future budget years to fund programs that serve older adults, people with disabilities, and their caregivers.¹ Responding to the threat of future deficits, the budget maintains the January 1, 2022, suspension of several ongoing programmatic expansions established in the 2019 Budget Act. This includes specified Medi-Cal optional benefits, such as audiology, speech therapy, optometry services, and podiatry. In addition, the budget moves the suspension timeline of most Proposition 56 Medi-Cal program rate increases up to July 1, 2021. These suspensions will be lifted if it is determined that there is sufficient General Fund revenue to support these programs in the subsequent two years.

While the enacted budget rejected proposed cuts to critical programs serving older adults, people with disabilities, and family caregivers, the risk of budget deficits in following years could still pose a threat to future funding for these programs.

Enacted Budget Items Impacting Older Adults, People with Disabilities, and Family Caregivers

The following tables outline program funding in the enacted budget as compared to the May Revision proposals. Tables 1-2 outline proposed reductions to home- and community-based services that were rejected with funding included in the enacted budget. Tables 3-4 reflect proposals that were upheld in the enacted budget, resulting in funding cuts. Table 5 shows the proposed investment in skilled nursing facilities in the May Revision that was upheld.

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