Californiaâs 2021â2022 State Budget: Focus on Health Care California Government Update August 03, 2021 Subscribe California’s New Budget Commits the State to Record Health Care Spending California Governor Gavin Newsom and the state Legislature enacted a $196 billion spending plan for FY2021–22, including authorizing a 29% increase in health care spending over FY2020–21. This new level of spending is in part a response to the COVID-19 pandemic, but much of it will go to pay for Medi-Cal expansion, innovation and reform that was under consideration before the pandemic. Historic Revenues Allow Record Spending Lawmakers are able to commit to record spending on health care because of an unprecedented $85 billion budget surplus, which includes higher-than-expected tax revenues and $26 billion in nonrecurring federal COVID-19 relief funding.