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File #: 19-1298    Version: 1 Name:
Type: Memo Status: Passed
File created: 1/21/2020 Departments: COUNTY MANAGER
On agenda: 1/28/2020 Final action: 1/28/2020
Title: Accept this analysis of the Governor's Proposed 2020-21 State Budget.
Special Notice / Hearing: None__
Vote Required: Majority

To: Honorable Board of Supervisors
From: Michael P. Callagy, County Manager
Connie Juarez-Diroll, Legislative Officer

Subject: Analysis of the Governor's Proposed 2020-21 State Budget

Accept this analysis of the Governor's Proposed 2020-21 State Budget.

On January 10, 2020 Governor Gavin Newsom released his proposed FY 2020-21 State Budget, which includes $153.1B in General Fund, $64.8B in special funds, and $5.4B in selected bond funds totaling $222.2B. The proposed budget reflects a 3.5 percent increase in spending from the current fiscal year budget.

The Governor's Budget continues the state's focus on building up discretionary reserves and spending nearly $2B of the $5.6B surplus on one-time spending. The surplus assumes about $1.8B in reimbursements from the federal government for costs associated with wildfires in 2017 and 2018. The revenue forecast also assumes federal approval of the Managed Care Organization (MCO) tax; however, revenues from the MCO tax are not assumed to begin to accrue until 2021-22. The budget continues to grow state government through new responsibilities, redesigned state departments, and increased safety net spending above the Legislative Analyst Office recommendation of no more than $1B.

The Administration projects that the nation's record-long economic expansion will continue through the forecast period, from 2020 to 2023, but projects that the pace of growth will slow both nationally and in California. The outlook projects that the state will continue to add jobs over the next few years, but at a slower pace. Although the Administration does not expect a recession in the forecast period, the Governor's Budget continues to acknowledge growing national and global economic risks from a recession on the horizon, global stock market volatility, and political instability. The outlook also points out ...

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