2015-16 State Budget Summary

Click here to download the PDF version of the CA Labor Federation State Budget Summary

After years of deep budget cuts and recession, California’s economy is slowly recovering and we now have a budget surplus. While we’re headed in the right direction, we have a long way to go to make the necessary investments to support a healthy economic future. The passage of Proposition 1 allows for urgently needed investment in the state’s water infrastructure, while Proposition 2 creates a rainy day fund to prepare the state for future downturns. This budget isn’t as bleak as it’s been in previous years, but Californians are still feeling the devastating effects of cuts to important services made during the economic downturn. It’s critical that we make substantial investments in job creation, education, health care, social services and infrastructure to create good jobs and rebuild the middle class. The 2015-16 budget proposal makes important strides toward that goal, but much more must be done.

State Government and Workforce

Retiree Healthcare: Calls for employees and employers to equally share in the prefunding of retiree health care, a proposal that will be addressed through collective bargaining as contracts come up for renewal.

o Asks CalPERS to offer a High Deductible Health Plan with a Health Savings Account.
o Plans for CalPERS to implement dependent tiers and a surcharge on spouses who are eligible for coverage through their employers.
o Proposes for newly hired workers to work 15-25 years to qualify for retiree health care, rather than 10-20 years for current workers.

Civil Service: Recommends a plan to work with employee groups on Civil Service Reform.

K-14 Education

Deferrals: Pays back $992 million in remaining deferred payments to schools.
Prop 98: Increase in Prop. 98 K-12 per pupil spending of $306 over 2014-15 levels.
LCFF: Invests $4 billion in the Local Control Funding Formula (LCFF), an increase of 8.7% over 2014-15.
School Facilities: Proposes recommendations from a DOF stakeholder group to design a new K-12 School Facilities Program.

Higher Education

UC: Increase of $119.5 million contingent upon the keeping tuition capped at 2011‑12 levels and not increasing non-state resident enrollment.

o Requires UC Regents to form a committee to reduce the University’s cost structure.

CSU: Increase of $119.5 million with the expectation that tuition will not increase.
Community Colleges: Provides $200 million for student success programs, $125 million in increased operating expenses and $106.9 million for enrollment growth, among other increases.

Health and Human Services

Managed Care Organization (MCO) tax: Proposes a new MCO tax in 2015 to replace the current tax that was invalidated by the federal government in order to offset payments from the General Fund for the non-federal share of supplemental payments and increased capitation rates for Medi-Cal managed care plans for a GF savings of $1.1 billion
IHSS: Restores the 7% across the board reduction to IHSS hours and will use the MCO tax to fund the restoration effective July 2015.

o Does not implement federal overtime pay requirements for IHSS workers.

CalWORKs: Increases Maximum Aid Payment levels by 5% for CalWORKs recipients.
High-cost drugs: Reserves $300 million for use of high‑cost drugs like Sovaldi in state programs. The Administration will convene a workgroup of affected entities to address how the state deals with high-cost and specialty drugs.
Medi-Cal: Allocates $150 million to address Medi-Cal workload increases at the county level.
Dept. of Public Health: Increases funding from special funds for Licensing and Certification by $21.8 million for 237 new positions.
Immigrant healthcare: Budget does not assume covering immigrants who gain deferred action status under the President’s Executive Order. Immigrants who gain that status would be eligible for Medi-Cal, IHSS and Cash Assistance Program for Immigrants.

Labor and Workforce Development

Workforce Development: Proposes $1.2 billion in a comprehensive Workforce Development program in the following areas:

o $500 million for an Adult Education Block Grant for basic skills, ESL, etc.
o $250 million for a three year transitional Career Technical Education Incentive Grant pProgram to develop new CTE programs in K-14 education.
o $14 million for existing apprenticeship programs and $15 million for new apprenticeships in emerging industries.

Disability Fund: Repays $303.5 million of a loan to the Unemployment Compensation Disability Fund.
EDD: Allocates $39.7 million to fund 238 new positions at EDD to meet efficiency and service goals.
UI Debt: Makes a $184.4 million interest payment on the federal loan to the state UI fund.
Cal/OSHA: Increases OSHA funding by $4.6 million to fund 44 positions to do 1,400 additional workplace health and safety inspections.
ALRB: Increases ALRB funding by $1.6 million for 13 positions to support the Board.


Transportation: Invests $250 million for high speed rail and $100 million for transit and intercity rail from cap and trade revenues.
Water: Begins Prop. 1 water bond projects with a first year investment of $532.5 million in water projects.
Infrastructure: Releases the Five Year Infrastructure Plan which outlines the state’s debt service and investment plans.


Operations: Augments trial court operations with $90.1 million in funding.
• Prop 47: Increase of $26.9 million for workload associated with the implementation of Prop. 47.

Read the complete Budget at: