Governor Newsom’s budget priorities shift drastically due to COVID-19, creating a $54 billion shortfall in the state’s budget

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On January 10, 2020, Governor Gavin Newsom introduced his 2020-21 state budget, a $222.2 billion budget proposal which demonstrated a strong commitment to strengthening California’s healthcare delivery system. The Governor’s January budget was the first step of a five-month budget period, during which time state legislators, including our State Senators and State Assembly members, review the Governor’s budget proposal, and budget committees and subcommittees in both the Senate and Assembly host public hearings through the 5-month period, ending in May. By May 14, the Governor provides an updated budget known as the May Revise, reflecting his proposed changes which usually reflect the California’s most current financial state. The final budget must be finalized by June 15, 2020 as mandated by constitutional law. The new  budget and fiscal year take effect July 1, 2020 and continues through June 30, 2021. 


Some highlights from Governor Gavin Newsom’s January budget proposal included California Advancing and Innovating Medi-Cal (formerly known as Cal-AIM) – a multi-year initiative to transform the state’s Medi-Cal program through an investment of $695 million for 2020-21 growing to $1.4 billion in 2020-21 and 2022-23. Governor Newsom’s budget also allocated $80.5 million to expand full-scope Medi-Cal to all income eligible undocumented seniors age 65 or older – also known as Health4All Seniors, and provided $150 million in supplemental funding to help community health centers (CHCs) mitigate expected financial losses caused by his proposed Medi-Cal 340B pharmacy transition to a fee for service model, which was scheduled to take effect on January 21, 2021. Governor Newsom’s budget priorities shifted drastically due to the COVID-19 pandemic ‘s impact on the state’s fiscal reality. 


On May 14, 2020, Governor Gavin Newsom released his 2020-21 May Revision which included a $54 billion shortfall and $14 billion cuts to several health and social programs, a significant change to his January budget proposal. The Governor’s May Revise included several proposed cuts – also known as trigger cuts, which would take effect immediately if the state does not receive financial support from the federal government by July 1, 2020. On June 3, 2020 the State’s legislative leadership including the Speaker of the State Assembly, Senate Pro Tempore and the Assembly and Senate Budget Committee Chairs came to an agreement regarding the 2020-21 State Budget. Their budget agreement continues to include anticipated funding from the federal government with trigger cuts taking effect in October if the state does not receive funds from the federal government. The Governor, Senate and Assembly leadership will continue their final negotiations to come to an agreement on the final budget. 


NEVHC works with a coalition of CHC advocates including the California Primary Care Association (CPCA) and the Community Clinic Association of Los Angeles County (CCALAC) to advocate for the protection of  protect programs important to our patients and community, including but not limited to: 


  • • 340B Medi-Cal Drug Discount Program: We continue to request that the Governor and state legislature maintain the $150 million supplemental funding in the 2020-21 budget, and that they delay the pharmacy transition from Managed Care to Fee for Service until the next 2021-22 budget cycle. 
  • • Telehealth/Telephonic Care: We continue to advocate for the Governor and state legislature to commit to making virtual visits allowable under Medi-Cal indefinitely. 
  • • Health4All Seniors: We request that the Governor and legislature commit to providing full-scope Med-Cal to income eligible undocumented seniors age 65 or older. 
  • • Protect the Health Navigator Program: We request that the Governor and legislature protect funding for the Health Navigator Program.


Stay tuned for additional Government Relations updates and advocacy opportunities!  

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NEVHC is a Health Center Program grantee under 42 U.S.C. 254b, and a deemed Public Health Service employee under 42 U.S.C. 233(g)-(n) with respect to certain health or health-related claims, including medical malpractice claims, for itself and its covered individuals.  

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