Earlier today, Governor Jerry Brown signed more than 20 bills in the 2018-19 state budget package, his final budget as Governor. The new budget package forecasts revenues that are $8.0 billion higher — over a three-year window — than projected in January, due to strong economic growth.
The budget agreement prioritizes building up state reserves. As required by Proposition 2 (2014), $3.5 billion is set aside, with half going to the state’s rainy day fund and half to pay down debts. An optional $2.6 billion is deposited into a new, temporary reserve; $2 billion is placed in a discretionary reserve; and a new $200 million “safety net reserve” is created to help support CalWORKs and Medi-Cal services in an economic downturn. State reserves are expected to total almost $16.0 billion by the end of 2018-19.