“After a nationwide search, the Board of Directors of Western Center on Law & Poverty has chosen Crystal D. Crawford to be its next Executive Director. Crawford is currently a program director at The California Wellness Foundation, a position she has held since 2012. Crawford will be the first Black woman or woman of color to serve as the organization’s Executive Director.”
Crawford Brings Decades of Experience in Strategic Philanthropy, Policy Advocacy and Social Justice
LOS ANGELES – After a nationwide search, the Board of Directors of Western Center on Law & Poverty has chosen Crystal D. Crawford to be its next Executive Director. Crawford is currently a program director at The California Wellness Foundation, a position she has held since 2012. Crawford will be the first Black woman or woman of color to serve as the organization’s Executive Director.
A seasoned leader with more than 20 years of senior management experience in the legal, philanthropic and nonprofit sectors, Crawford has played a pivotal role in advancing the health and economic security of low-income Californians, women of color and communities of color.
At Cal Wellness, she developed and led the organization’s groundbreaking Women’s Initiatives, a multi-million dollar program that amplifies the voices of women of color and provides philanthropy and policymakers with a vision for how to advance the health and economic security of women of color. She also helmed Cal Wellness’ legacy portfolio, Increasing Diversity in the Health Professions, which has supported community-based organizations, academic institutions and countless people of color pursuing and sustaining health professions careers.
“It’s an honor to lead Western Center in this season of renewed community commitment to fighting systemic racial and economic injustice,” said Crystal. “I am proud to stand on the shoulders of prior Western Center Executive Directors, including social justice heroes Professor Derrick Bell and Judge Terry Hatter. Right now, we find ourselves in the battle of a lifetime, so I’m energized to join forces with this smart, passionate team in fighting for justice. In the words of Ella Baker and Sweet Honey in the Rock, ‘We who believe in freedom cannot rest until it comes.’”
Founded over 50 years ago in the wake of the Watts rebellion, Western Center remains committed to building upon its roots in the fight for racial justice. The last several years have been a whirlwind of assaults on past civil rights wins, and Western Center has been on the forefront of advocacy and legal battles at the local, state and federal levels. With Crystal’s leadership, Western Center will continue to mobilize its considerable resources, networks, and power to change the systems and institutions that perpetuate systemic inequality.
“Crystal is a visionary who brings stellar operational and strategic leadership expertise — along with a deep commitment to valuing community voices — to this position,” said David Elson, Co-Chair of Western Center’s Board of Directors. “We’re confident that she’s the perfect person to lead us as we continue our fight to upend the systems that keep people in poverty.”
Prior to her work with Cal Wellness, Crawford was CEO of the California Black Women’s Health Project, the only statewide organization devoted to improving the health of California’s Black women and girls through policy, advocacy, education and outreach. Prior to joining CABWHP, she served as Legal Director for the Alliance for Children’s Rights. Before working in the nonprofit, public interest sector, Crawford was a litigation associate at Manatt, Phelps & Phillips and a summer associate with major corporate law firms in Los Angeles, Boston and New York. She began her post-collegiate career as a public school teacher in Harlem.
Crawford is active in the leadership of numerous civic and community organizations. She sits on the five-member Los Angeles County Public Health Commission and is a member of the Women’s Health Policy Council for the Los Angeles County Office of Women’s Health. She also sits on the Dartmouth Alumni Council and serves on the boards of the Black Alumni of Dartmouth Association, the Black Women Lawyers Association of Los Angeles Foundation and Funders Concerned About AIDS. She previously served on the boards of Dartmouth College’s Rockefeller Center for Public Policy, the Tucker Foundation at Dartmouth College, Health Access California, SisterSong, and on the advisory council for the California Breast Cancer Research Program.
Crawford is the recipient of numerous awards, including the 2009 Advocates’ Award from Western Center, the 2012 PowerPAC Award from the Los Angeles African American Women’s Political Action Committee, and the 2015 Outstanding Women of the City Club Award.
Originally from Harlem, New York and Teaneck, New Jersey, Crawford earned her bachelor’s degree in history from Dartmouth College and law degree from the New York University School of Law, where she was an Arthur Garfield Hays Civil Liberties Fellow. She is admitted to the bar in California, New York and New Jersey.
Crawford will transition from her current position at Cal Wellness and start with Western Center in early August. She will be based at Western Center’s headquarters in Los Angeles.
The state Legislature approved the 2020-21 budget after reaching a compromise with the Governor. The budget avoids most of the cuts proposed in the Governor’s May Revise to close an estimated $54 billion two-year budget deficit.
Progressive advocates mounted a strong campaign against the Governor’s proposed cuts, arguing that cuts during a recession harm low income families who need help now, make the recovery from the recession even harder, and reinforces structural racism and inequality by not asking the wealthy to pay more in taxes. Rather than approve the proposed austerity budget, the negotiated agreement includes a number of program advancements, and prevents almost all of the painful cuts proposed by the Governor.
Beneficial elements of this budget:
- Restores lifetime limit for adults on CalWORKs to 60 months, adding 12 additional months that were stripped in last recession.
- State Earned Income Tax Credit and Child Tax Credit no longer excludes ITIN tax filers with children under six.
- Increased pass through of child support for families on CalWORKs from $50 to $100 for one child, $200 for two or more.
- No trigger cuts to SSI, CalWORKs, or Medi-Cal.
- No cuts to existing Medi-Cal services and eligibility.
- No cuts to SSI – federal COLA to be passed through on January 1, 2021.
The approved budget relies on the receipt of $14 billion in federal COVID emergency funds by September. Without that funding, the “trigger” mechanism will institute $14 billion in budget solutions. The Governor previously proposed a different trigger, but it was centered around cuts to Medi-Cal, CalWORKs, SSI, IHSS and K-12 education. The trigger agreed to in the budget agreement does the following:
- Draws an additional $2.7 billion from the rainy day fund and Safety Net Reserve.
- $1.3 billion one-time benefit from reinstatement of a longstanding deferral of state payments to CalPERS, including from state special funds.
- $5.9 billion of increased deferrals to Proposition 98 (K-14 education) funding.
- $600 million reduction to the county realignment backfill in this budget plan (leaving $400 million of county backfill remaining).
- $770 million of university reductions ($370 million for UC and $400 million for CSU).
- $100 million of reductions to the judicial branch budget.
- At least $1.5 billion in state employee compensation reductions, for represented employees, through the collective bargaining process.
- Potentially, another $1.6 billion from reinstatement of the one-day June payroll deferral instituted during the last recession. (This change would be optional at the direction of the Director of Finance.)
The budget plan contains total reserves of approximately $11 billion, including about $2 billion in the discretionary reserve, $900 million in the Safety Net Reserve, and $8.35 billion in the Proposition 2 Rainy Day fund. If the federal funds do not arrive and these trigger actions take effect, total reserves would be over $7 billion, including over $800 million in the discretionary reserve and $6.5 billion in the rainy day fund.
Even with this agreement, the state’s budget problems are not solved. The budget relies on an estimate of state income tax revenues which were delayed from April 15th to July 15th. The budget assumes significant revenue declines, but if these estimates are inaccurate, it could make the deficit larger (or smaller). Additionally, large revenue gaps exist in the projected 2021-22 budget, and while this budget saves some solutions for the future, there is likely to be an $8-10 billion gap.
Progressive advocates organized under the banner of Commit to Equity are advocating for the Legislature and Governor to pass additional tax increase measures this summer to bridge this gap. Among the ideas under consideration are a tax on the top one percent of tax payers, increasing taxes on corporations and instituting a wealth tax on billionaires.
Public Benefits and Human Services
The Governor’s May Revise called for significant cuts to CalWORKs and SSI. In CalWORKs, the Governor proposed a significant reduction in funding for welfare-to-work just when tens of thousands of people were coming onto the program for both cash assistance and a chance to find employment. That cut was rejected. Smaller cuts to the CalWORKs Home Visiting program and a one-year suspension in funding for the Cal-OAR program were approved.
Supplemental Security Income — The Governor proposed to reduce the state contribution to the SSI grant by approximately $5 a month. That proposal would have kept the SSI maximum grant amount flat for 2021 since a similar sized federal cost of living adjustment is expected starting January 1. But that cut was rejected in the compromise, and SSI recipients will now get the full value of the federal funds.
CalWORKs “Time Clock” — In 2012, under pressure of another large budget deficit, the Legislature went along with Governor Brown’s proposal to cut CalWORKs time on aid from 60 months to 48 months, and to institute two confusing and unproductive 24 month clocks, one with more welfare to work flexibility and one rigidly following federal TANF work requirements. As a practical matter the changes had virtually no positive client impact and both advocates and counties advocated for it to end.
This budget finally restores the full 60 months on aid permitted under federal TANF law (a racist and misogynistic rule in itself) and eliminates the two 24-month work activity approach. It means that adults forced off CalWORKs because they hit the 48-month limit will be eligible to return to CalWORKs for an additional 12 months, have their grant restored, and be eligible for all supportive services. This change will start in May, 2022 after the counties complete the transition to a single welfare information system. Read our Coalition’s budget letter here.
In addition to the CalWORKs victories, the budget also includes several additional investments to prevent hunger. The budget includes hundreds of millions of dollars for:
- CalFresh outreach to and application assistance for Supplemental Security Income (SSI) recipients who do not yet receive CalFresh;
- The extraordinary effort by California’s food banks to respond to COVID-19;
- Simplifications in the CalFresh program that will help those enrolled retain benefits and those who are eligible to access the program more readily;
- Implementation and expansion of CalFresh to Medi-Cal dual enrollment outreach, in reach and retention;
- Extension of the sunset for the CalFresh Safe Drinking Water Supplemental Benefit Pilot Program;
- Shoring up county and state administration of the CalFresh program;
- Summer meal and school meal programs.
In addition to achieving new funding, the budget also rejects the Governor’s May Revision proposal to delay the implementation of the statewide Restaurant Meal Program, to cut $8.5 million General Fund for the Senior Meals on Wheels Program, and to cut funding from college basic needs programs.
Overissuance in CalFresh — The budget extends the authority of the Department of Social Services to seek federal authority to reduce the numbers of overissuances collected in the CalFresh Program. To learn more about why this authority is needed and how harmful overpayments and overissuances of benefits can be, see this article in The New Republic, which includes quotes from Western Center and our partners at Bay Area Legal Aid. Unfortunately, the budget does not include similar protection for CalWORKs families who had overpayments triggered by the Governor’s executive order suspending re-determinations. Advocates will be working to resolve this problem over the summer.
Calfresh Application Simplification — Makes simplifications in the CalFresh program application, interview, and recertification process and requires counties to do more to ensure that applicants and recipients for Medi-Cal receive assistance in applying for CalFresh. This alignment between Health Care enrollment and CalFresh enrollment is something Western Center has been working on for years in coalition with others, and this budget action mirrors the vision of SB 1002, a Western Center co-sponsored bill vetoed by then-Governor Brown.
Simplification of Reporting Processes — Requires a workgroup to be convened by the Department of Social Services to simplify the CalFresh Semi-Annual Reporting (SAR) process. Authorizes counties to communicate with CalFresh and CalWORKs recipients about redetermination via text, cell, or email, and allows counties to use alternative methods to verify information needed to complete the reporting process and rescind a discontinuance notice.
Protecting Human Services Workforce – Limits to the amount of county share-of-cost will be required for administrative costs in the CalFresh program during the COVID-19 recession, and for two years, to ensure there is no incentive for counties strapped with budget shortfalls to reduce staff. During the last recession, loss of county safety-net jobs were significant, creating a bottleneck for accessing needed services of newly unemployed Californians, but also leaving many in that workforce without a job and prolonging our state’s economic recovery. In some counties, caseworker jobs were never fully restored and their safety net programs suffer as a result.
Immigrants and CalEITC/ Child Tax Credit — Immigrant advocates got a partial victory with the inclusion of undocumented immigrants in the state Earned Income Tax Credit (they are still barred from the federal EITC) and the state Child Tax Credit. Both are limited to families with children under six years of age, so many undocumented immigrants who file with Individual Tax Identification Numbers (ITINs) are still excluded from receiving tax credits even though they are poor and pay taxes. Advocates will be mounting a campaign to complete the work of making state tax credits available to all workers.
Child Support Pass Through — The budget increases the pass through of child support paid to a family on CalWORKs from $50 to $100 for one child, and $200 for two or more children — a change Western Center has been seeking since 2007. Western Center and other members of the Truth and Justice in Child Support Coalition sponsored SB 337 (Skinner) last year, which was vetoed by the Governor. We have been calling for broad reforms of the child support system, including a transition to 100 percent pass through of child support paid. Read our Coalition’s budget letter here.
Access to Justice
The budget includes full funding for the Equal Access Fund. The Governor proposed a five percent cut in the May Revise, but that was rejected by the Legislature. The budget also includes $31 million from the Mortgage Settlement Fund for legal service organizations and support centers to provide eviction defense or other tenant defense assistance in landlord-tenant disputes, including pre-eviction and eviction legal services.
Housing and Homeless Funding
The Governor’s January budget proposed a $750 million one-time investment in homeless programs that would have been administered through regional collaborations. The May Revise pulled this proposal back and replaced state funding with funding from the federal CARES Act.
Project Roomkey — The final budget compromise includes $550 million in federal Coronavirus Relief Fund dollars for Project Roomkey. These funds will be available to cities, counties, and other local entities to acquire and rehabilitate motels, hotels, apartments, adult residential facilities, residential care facilities for the elderly, manufactured housing, and other buildings with existing residential uses that could be converted to permanent or interim housing for people experiencing homelessness. Funds can also be used for master leasing properties, relocation assistance for individuals displaced due to rehabilitation, and capitalized operating subsidies. Funds must be spent by September 1 or they can be reallocated to ensure the state meets the end-of-year deadline to expend funds or return them to the federal government.
Another $50 million will come from the General Fund for Project Roomkey for the acquisition, conversion, and rehabilitation of hotels, motels, and other properties into housing for people experiencing homelessness. These funds can also be used for capitalized operating reserves and must be spent by June 30, 2022.
Additionally, $1.789 billion in federal Coronavirus Relief Fund dollars will go to cities and counties for public health, public safety, or homelessness, with a September 1 deadline to expend funds:
- $225 million to cities with populations greater than 300,000 that did not receive a direct allocation from the federal government.
- $275 million to cities with populations less than 300,000.
- $1.289 billion to counties.
Homeless Housing, Assistance, and Prevention (HHAP) program — $300 million from the General Fund will go to the Homeless Housing, Assistance, and Prevention (HHAP) program, administered by HCD, with funds to be allocated proportionally based on the 2019 Point in Time (PIT) Count:
- $90 million to continuums of care.
- $130 million to cities with populations over 300,000.
- $80 million to counties.
- At least eight percent of funds must go to assist homeless youth.
Funds must be spent on evidence-based solutions for homelessness, including:
- Rapid rehousing, including rental subsidies and incentives to landlords, such as security deposits and holding fees.
- Operating subsidies for affordable or supportive housing, emergency shelters, and navigation centers.
- Street outreach to assist persons experiencing homelessness to access permanent housing and services.
- Services coordination, which may include access to workforce, education, and training programs, or other services needed to promote housing stability in supportive housing.
- Systems support for activities necessary to create regional partnerships and maintain a homeless services and housing delivery system, particularly for vulnerable populations including families and homeless youth.
- Delivery of permanent housing and innovative housing solutions, such as hotel and motel conversions.
- Prevention and shelter diversion to permanent housing, including rental subsidies.
- New navigation centers and emergency shelters based on demonstrated need.
California Tax Allocation Committee — Allocates $500 million in new State Low Income Housing Tax Credits (LIHTC) for 2020-21.
Foreclosure Assistance — $300 million from the National Mortgage Settlement allocated to The California Housing Finance Agency (CalHFA) for foreclosure assistance.
Following agreement from the Governor, the health omnibus trailer budget bill (AB 80/SB 102) closely resembles the legislative deal reached earlier this month. The budget deal rejects many of the health cuts proposed in the May Revision. Specifically, it maintains critical Medi-Cal benefits, rejects reinstating the senior penalty by raising the Medi-Cal Aged & Disabled income limit, limits estate recovery, and restores navigator and black infant health funding. Unfortunately, the budget indefinitely delays Health4AllElders by not expanding Medi-Cal to undocumented Californians aged 65 and older.
The budget deal maintains eligibility expansions approved last year but indefinitely delays Health4AllElders:
- Ends the senior penalty by expanding the Medi-Cal Aged & Disabled Program for individuals with incomes between 123 and 138 percent of the federal poverty line (FPL). The 2019 Budget scheduled implementation for January 2020, but was delayed to August 2020.
- Implements the Medicare Part B disregard, which would stop seniors and persons with disabilities from losing access to free Medi-Cal due to a confusing Medi-Cal rule that creates fluctuations in income calculations even though a person’s actual income has not changed.
- Extends Medi-Cal eligibility from 60 days to one year for post-partum women diagnosed with a mental health disorder.
- Upholds 2016 Budget Act that limited estate recovery federal requirement to long term services for individuals who pass away after January 1, 2017. Estate recovery is asset seizure of the home and savings of poor individuals who receive health care coverage through Medi-Cal and are 55 or older or permanently institutionalized. The proposed expansion of estate recovery would have acted as an enrollment barrier, and perpetuated government-sanctioned asset stripping in communities of color.
- Maintains one-time $30 million General Fund funding for enrollment navigators, approved in the 2019 Budget.
- Aligns with federal law to prohibit termination of Medi-Cal eligibility for a juvenile under age 21 or foster care youth under age 26 while incarcerated.
- Once funding is available, prioritizes Health4AllElders, which would expand full-scope Medi-Cal for adults 65 and older who, but for immigration status, would be eligible.
On the Medi-Cal benefits/services side, the budget deal:
- Maintains all critical Medi-Cal benefits, including adult dental benefits, audiology, incontinence creams and washes, speech therapy, optician/optical lab, podiatry, optometry, acupuncture, nurse anesthetists services, occupational and physical therapy, diabetes prevention program services, pharmacist-delivered services, screening, brief intervention and referral to treatments for opioids and other illicit drugs.
- Services that keep individuals in their home rather than nursing facilities, including Community-Based Adult Services (CBAS) and Multipurpose Senior Services Program (MSSP) remain. In-Home Supportive Services (IHSS) service hours remain uncut.
- Maintains funding for behavioral health counselors in emergency departments, approved in the 2019 Budget.
- Extends the Medically Tailored Meals Pilot Program authority for an additional year, at no additional cost due to delayed implementation.
- Directs DHCS to maximize federal funding to provide COVID-19 testing and treatment to uninsured and underinsured individuals through the COVID-19 Presumptive Eligibility (COVID19 PE) program.
On the Medi-Cal provider side, the budget deal:
- Maintains supplemental provider rates for physicians, dentists, women health services, family health services, developmental screenings, CBAS, Adult Day Health Center, non-emergency medical transportation, intermediate care facilities- developmental disabilities, hospital-based pediatric physician, adverse childhood experiences (ACEs) screening and provider training, value-based payments, and physician and dental loan repayment, but suspends these payments (with the exception of women’s health services) on July 1, 2021 unless revenues exceed expenditures.
- Maintains $8.2 million in supplemental payments to the Martin Luther King Jr. Community Hospital in Los Angeles.
- Provides payments to non-hospital clinics for 340B pharmacy services and continues planned implementation of Medi-Cal Rx for January 2021.
- Negotiated agreement cuts Medi-Cal plan rates up to 1.5 percent from July 2019 to December 2020, due to anticipated lower costs and utilization related to the pandemic, but does not include a cap on managed care plan rates for in-patient hospital stays. The budget also establishes a risk corridor as safeguard against unanticipated costs.
Other Medi-Cal budget agreements:
- Delays implementation of the CalAIM
- Maintains dental managed care in Sacramento and Los Angeles.
- Maintains funding for the Medical Interpreters Pilot Project that was approved in 2019 Budget.
- Prescription drugs – allows Medi-Cal to negotiate for rebates based on the international “best price,” allows DHCS to seek federal approval to establish a prescription drug rebate program for non-Medi-Cal populations, and eliminates copays and the six prescription limit in Medi-Cal fee-for-service.
Other health program budget deals:
- Department of Public Health – maintains funding for the Black Infant Health program and rejects reversions of 2019 augmentations, including partial reversions of funds appropriated for sickle cell disease and a farmworker health study, and an entire reversion of technical support for mental health disparities grants and mental health services grants.
- Covered California – keeps the additional state-based subsidies for households below 138 percent FPL and between 200-600 percent FPL at lower expenditure authority to reflect lower than projected enrollment.
- Health Care Payments Data System – establishes the system to provide for data collection and requires publicly available reporting and data releases.
- Hearing Aids – maintains funding to help cover the cost of hearing aids not covered by insurance for children in households up to 600 percent FPL to be implemented no sooner than July 2021.
“Usually people on the other end of overpayment or overissuance claims don’t have attorneys to help, said Jessica Bartholow, a policy advocate at the Western Center on Law & Poverty. “That’s really appalling, because a public benefits fraud case can be enough to kick you out of the country if you’re an immigrant; they could go to jail; they could lose their kids if they go into Child Protective Services.” When people have lawyers, by contrast, “one out of two times” they can prove there was no overpayment at all.”
FOR IMMEDIATE RELEASE
SAN FRANCISCO —The California Court of Appeal ruled that the Department of Motor Vehicles cannot suspend the licenses of drivers who fail to appear in court unless the DMV receives a notification of a willful failure to appear. The court’s finding that the DMV’s practice was unlawful means that likely thousands of motorists have had their licenses improperly suspended.
The plaintiffs in this statewide lawsuit—Hernandez v. California Department of Motor Vehicles—are represented by a coalition of legal aid and civil rights groups, including Bay Area Legal Aid, Western Center on Law & Poverty, The ACLU of Northern California, the USC Gould School of Law Access to Justice Practicum, The Lawyers’ Committee for Civil Rights of the San Francisco Bay Area (LCCR), and the law firm of Pillsbury Winthrop Shaw Pittman LLP.
This ruling marks another important step in a series of reforms to traffic court procedures that harmed low-income drivers without improving public safety. These reforms include the elimination in 2017 of driver’s license suspensions based on a driver’s failure to pay their traffic ticket. In making that change to state law, Governor Brown noted there “does not appear to be a strong connection between suspending someone’s drivers license and collecting their fine or penalty. Often, the primary consequence of a drivers license suspension is the inability to legally drive to work or take one’s children to school.”
As many Californians know, losing a driver’s license is a serious consequence that has long-term ripple effects in their lives. The Court of Appeal ruling affirms that state law does not allow traffic courts and the DMV to impose this severe consequence unless the traffic court also sends a notification of a willful failure to appear.
Poverty affects drivers’ ability to show up to court in many ways. Some traffic defendants lack transportation or can’t take time off work. Those who are homeless or unstably housed may not receive a mailed notice to appear in court. In some cities, defendants can be turned away for bringing a child to court even if they have no childcare.
“With this tremendous win, someone who isn’t able to come to court because they are hospitalized, have to take care of an ill family member, or are afraid to come to court because of immigration status won’t be unfairly punished with license suspension,” said Elisa Della-Piana, Legal Director of the Lawyers’ Committee for Civil Rights of the San Francisco Bay Area. “They won’t lose their job and fall deeper into a cycle of poverty because their license is suspended.”
Research shows that people who lose their driver’s licenses often lose their jobs, and that suspensions perpetuate and exacerbate poverty. “Most Californians need a driver’s license to work and care for their families,” said Clare Pastore, professor at the USC Gould School of Law Access to Justice Practicum, “And the importance of a driver’s license is only heightened during the current global pandemic and economic recession.”
As the country reflects on its history and the current state of policing, advocates point out that they have long highlighted the disparate impact non-safety related driver’s license suspensions have on communities of color. “The racially disparate enforcement of traffic laws must be understood within the context of over-policing and the presumption of criminality imposed on Black and Brown persons. For too long, our over-reliance on punishment at the expense of Black and Brown persons has steered us away from effective public safety practices,” said Novella Coleman, Acting Director of Litigation and Senior Litigation Counsel of Bay Area Legal Aid.
“This decision reaffirms California’s commitment to common sense traffic enforcement. Suspending the driver’s license of anyone who misses a traffic court date doesn’t make our roads safer, and it undermines people’s ability to work and care for their families,” said Rebecca Miller, attorney at the Western Center on Law & Poverty. “I hope the Legislature and Judicial Council use this decision as an opportunity to reexamine failure-to-appear suspensions and continue to make necessary reforms to California’s traffic laws.”
A recent analysis of data from the San Francisco Superior Court shows no negative impacts on collection of debt after eliminating license suspensions for unpaid traffic citations. San Francisco then went further and stopped suspending driver’s licenses for missing a traffic court date, too, clearing more than 88,000 failure-to-appear notifications that had been sent to the DMV.
“A major driver of that reform in San Francisco has been the clear consensus that failure to appear most often reflects poverty, not willful disregard for the court system,” said Anne Stuhldreher, Director of the City’s Financial Justice Project.
The case will now continue in the trial court to ensure the DMV implements policies consistent with this ruling. As a result of the Court of Appeal’s ruling, thousands of Californians may get their driver’s licenses back. “By requiring the DMV to enforce the statutes as they were actually written by the Legislature, the court has taken an important step toward removing unjust penalties that perpetuate poverty and inequality,” said William Freeman, senior counsel at the ACLU Foundation of Northern California.
Western Center on Law & Poverty, Courtney McKinney, cmckinney[at]wclp.org, (214) 395-2755
Lawyers’ Committee for Civil Rights of the San Francisco Bay Area, Sam Lew, slew[at]lccrsf.org, (415) 272-8022
Taylor Brady, Bay Area Legal Aid, Tbrady[at]baylegal.org, (510) 250-5234
The May Revision for the California 2020-21 budget is a troubling demonstration of how the COVID-19 crisis has impacted every aspect of our lives, and will continue to do so.
The proposed budget has cuts in virtually every area of state government, including devastating cuts to education, environmental programs, health care, public benefits, In-Home Supportive Services, and wages for state employees. Only programs directly fighting the pandemic will see budget increases.
The chart below makes the depth of cuts across programs clear:
Source: CA Dept. of Finance May Revise Budget Summary, page 11
In total, the May Revise estimates a two-year budget deficit of $54.3 billion. This dwarfs the highest budget deficit from the Great Recession of $28 billion. While the cuts are deep and painful, they would be worse if the state had not saved nearly $18 billion in reserves over the past decade. This budget proposes to use half of those reserves in the 2020-21 budget, while preserving the remainder of the reserve funds for future years.
Below is a high level summary of how the budget closes the $54 billion budget deficit.
Source: CA Dept. of Finance May Revise Budget Summary, page 4
Notably, the budget is balanced with $14 billion in cuts that will occur if additional federal funds are not received by July 1, 2020. These cuts, called “triggers” in budget parlance will go into effect automatically. They include cuts to CalWORKs, IHSS, Medi-Cal, and SSI. This means attention will be focused on Congress for the next several weeks. Western Center is working with a broad coalition of groups to advocate with Congressional members to pass the HEROES Act, a recently proposed $3 trillion federal relief package that includes $875 billion for state and local governments to fill budget deficits created by the pandemic.
There are no grant cuts or eligibility cuts proposed for CalWORKs, but there are major reductions being proposed to county Single Allocation Funding (SAF) to accommodate explosive growth predicted in the program. CalWORKs caseload is expected to rise to 724,000 families just months after reaching an all-time low of approximately 350,000 families in the program earlier in 2020. This rise in caseload is significantly higher than it was for the Great Recession, which peaked at just below 600,000 cases. To absorb the caseload increases, the budget uses $450 million from the Safety Net Reserve in the 2020-21 budget while retaining an additional $450 million in reserve for future budget shortfalls.
There is also very bad news for CalWORKs recipients in this budget. It reduces expenditures in CalWORKs by $850 million by making the following reductions if additional federal relief funding is not approved by Congress:
CalWORKs Employment Services and Child Care
The May Revision assumes CalWORKs Employment Services and Child Care will not be utilized by as many families due to the lack of jobs. These changes would result in a savings of $665 million General Fund in 2020-21.
CalWORKs Expanded Subsidized Employment
The May Revision reduces all but the base funding for CalWORKs Subsidized Employment. This proposal would result in a savings of $134.1 million General Fund in 2020-21.
CalWORKs Home Visiting
The May Revision reduces funding for CalWORKs Home Visiting by $30 million General Fund in 2020-21.
CalWORKs Outcomes and Accountability Review (CalOAR)
The May Revision eliminates funding for CalOAR, but provides counties with the ability to continue implementation. This proposal would result in a savings of $21 million General Fund in 2020-21.
The impact of these cuts will be a sharp curtailment of CalWORKs welfare-to-work activities. While the budget does not exempt all families with young children, as was done in the Great Recession, it assumes that the high unemployment rate will result in significantly reduced use of child care and employment services. It takes away significant funding from subsidized employment at a time when this program would be very helpful to encourage and support employers to hire CalWORKs recipients as the economy opens back up.
The budget also proposes one cut to CalWORKs not contingent on receipt of additional federal funds. The Governor’s January budget proposal to increase the child support pass through to CalWORKs families was withdrawn. This policy change would have allowed families to keep up to $100 for one child or up to $200 for two or more children in child support paid rather than keep this payment to pay the state, local and federal governments for the cost of providing basic needs help to low-income families.
While there are some disappointing cuts to the CalWORKs program services and pass through income, the Governor’s proposed budget stays the course on gains made to end childhood deep poverty. First, it retains California’s grant levels, including the proposed 3.1% increase proposed in January. CalWORKs grants will be at or above the “deep” poverty level for the first time in decades, just when poor families need the money most. Second, the budget makes no changes to CalWORKs eligibility, meaning that if the economy continues to lose jobs, there will be a safety net for families not eligible for unemployment insurance. Third, the budget does not reduce funding or eligibility for homeless and housing programs like Homeless Assistance, the Housing Support Program (HSP), Family Stabilization or CalWORKs diversion (where the Governor recently expanded eligibility via executive order).
These programs will be vitally important in protecting recipients from evictions once the pause on unlawful detainer filings is lifted.
Income and Tax Credits
While the budget makes no reductions to the state Earned Income Tax Credit and proposes an increase in the child poverty tax credit, it fails to end the exclusion for workers with ITINs.
The budget recognizes the role that wages have in reducing poverty and does not suspend the next increase in the minimum wage to $14 an hour on January 1, 2021.
State funding for SSI/SSP grants is proposed to be reduced on January 1, 2021 to the federal minimum of $156 a month. While that is not good news, because the Legislature has only restored $4 of the $77 cut from SSI/SSP grants during the Great Recession, there is now only $4 a month that can be taken from recipients. This cut, like the CalWORKs cuts outlined above, will not go into effect if the state receives additional federal funding.
Equal Access Fund
The budget proposes a reduction of approximately 5% in the Equal Access Fund, or around $1 million from the $20 million fund. The one-time $20 million augmentation to the EAF is not impacted because those funds were already dispersed in the 2019-20 budget. The budget also proposes to use $31 million from the Mortgage Settlement Fund to fund legal services for persons facing eviction or homelessness. These funds will be administered by the Judicial Council, who will determine who receives the funds and for what purposes.
There are no changes to the CalFresh program. The budget retains funding for both the Supplemental Nutrition Benefit and the Transitional Nutrition Benefit program which were created in 2018 to help households that lost federal SNAP benefits when SSI recipients were made eligible for SNAP. The May Revision also proposes a decrease of $11.4 million ongoing Proposition 98 General Fund to establish or support food pantries and CalFresh outreach at community college campuses. Instead, it proposes statutory changes to support community college food pantries within available Student Equity and Achievement Program funding.
Child Nutrition Programs
No cuts were made, but the $70 million in the Governor’s January budget proposal to increase access to and quality of food served has been withdrawn. Additionally, the May Revision proposes some of the remaining $1.6 billion in federal Elementary and Secondary School Emergency Relief funds be given in grants to county offices of education for the purpose of developing networks of community schools and coordinating health, mental health, and social service supports for high-needs students, citing food insecurity as one of the barriers to learning that this funding is intended to address.
The May Revision has withdrawn the Governor’s January Budget Proposal that would have increased the child support disregard pass-through and would have automatically forgiven uncollectable child support debt owed to the government, resulting in a savings of $8.4 million General Fund in 2020-21. Absent additional federal COVID-19 general relief funds, the budget would assume the funding levels for local child support agencies at the 2018 funding level, resulting in savings of $38.2 million General Fund in 2020-21. It would also require savings of $8.2 million in Department contracts and services.
Criminal Justice Fines and Fees
To address the expected decline in revenue for fines and fees collection, the Governor’s May Revision includes an additional $238.5 million one-time General Fund in 2020-21 and a 2-year total backfill to $315.5 million General Fund. No action was taken to relieve people who owe fees and fines.
Fees and fines will continue to weigh heavily on the physical, economic, and mental health of those impacted, and will continue to damage credit scores, access to traditional banking, and access to tax credits. What’s more, that debt will continue to impact relationships within families, and relationships with employers. Western Center will continue to push our co-sponsored bill, SB 144, to end these devastating fees in California.
The May Revision maintains funding included in the Governor’s Budget to expand the ability to pay program statewide.
Unfortunately, the May Revision makes deep cuts to the Medi-Cal program at a time when many of California’s poor families have not yet rebounded from the last recession. The Medi-Cal budget grows slightly from last budget year to $112.1 billion ($23.2 billion General Fund) due to an anticipated increase in caseload of 2 million due to the COVID-19 pandemic, for a total of 14.5 million (an increase of about 2 million absent the COVID-19 pandemic). However, there are significant proposed cuts to eligibility, benefits/services, and provider rates as outlined below:
The May Revision proposes the following Medi-Cal eligibility cuts:
- Withdraws January proposal to expand full-scope Medi-Cal to undocumented elders (Health4AllElders) for a savings of $87 million General Fund. Maintains Medi-Cal eligibility for undocumented children and young adults (Health4AllKids and Health4AllYoungAdults).
- Does not implement the 2019 Budget Act expansion of Medi-Cal Aged and Disabled Program for individuals with incomes between 123% and 138% of the FPL, for a savings of $67.7 million General Fund. The 2019 Budget scheduled implementation for January 2020, but was delayed to August 2020, and now proposed to be eliminated.
- Does not implement the Medicare Part B disregard, which would have stopped seniors and people with disabilities from losing access to free Medi-Cal because of a confusing Medi-Cal rule that creates fluctuations in income calculations, even when a person’s actual income has not changed.
- Does not implement the 2019 Budget Act to extend Medi-Cal eligibility from 60 days to one year for post-partum women diagnosed with a mental health disorder, for a savings of $34.3 million General Fund in 2020-21.
- Reverts one-time $30 million General Fund funding for enrollment navigator funding that was approved in the 2019 Budget.
On the Medi-Cal benefits/services side, the May Revision proposes trigger cuts (absent additional federal funds) to:
- Reduce adult dental benefits to the partial restoration levels of 2014. Partial dentures, gum treatment, and rear root canals will be cut for adults.
- Eliminate audiology, incontinence creams and washes, speech therapy, optician/optical lab, podiatry, and optometry, all of which were restored earlier this year. It also proposes to eliminate acupuncture (which was restored July 2017), nurse anesthetist services, occupational and physical therapy, pharmacist-delivered services, screening, brief intervention and referral to treatment for opioids and other illicit drugs, all of which were newly approved in the 2019 budget.
- Repeal 2016 Budget Act that limited estate recovery to federal requirement to long term services for individuals who pass away after January 1, 2017. Estate recovery is asset seizure of the home and savings of poor individuals who have received health care coverage through Medi-Cal and are 55 or older or permanently institutionalized. This has acted as an enrollment barrier.
- Eliminate diabetes prevention program services.
- Eliminate the Community-Based Adult Services (CBAS) program, effective January 2021, for a General Fund savings of $106.8 million in 2020-21 and $255.8 million in 2021-22. Eliminate the Multipurpose Senior Services Program (MSSP) effective no sooner than July 2020.
Note: The May Revision includes an additional $386.7 million in General Fund costs in 2019-2020 and $284.5 million in 2020-2021 for COVID-19 response for changes including:
- The COVID-19 presumptive eligibility program for the uninsured and underinsured who are ineligible for Medi-Cal.
- Hospital Presumptive Eligibility Expansion (HPE) for people over age 65 and for additional time periods.
- Waiving Shares of Cost for COVID-19 testing and treatment.
- Emergency Paid Sick Leave for IHHS and other providers.
- Testing, Diagnosis, and Treatment of COVID-19 for people who are Medi-Cal eligible and incarcerated.
- A number of provider rate increases.
On the Medi-Cal provider side, the May Revision proposes to:
- Eliminate supplemental provider rates for physicians, dentists, family health services and developmental screenings, non-emergency medical transportation, value-based payments, and amounts not yet spent on the physician and dental loan repayment programs funded by Prop 56, absent additional federal funds. These funds will be redirected toward caseload growth.
- Eliminate Prospective Payment System (PPS) carve-outs for FQHCs and Rural Health Clinics for Medi-Cal services including pharmacy, dental and other services with the exception of Specialty Mental Health and Drug Medi-Cal Services, for $50 million General Fund savings.
- Reduce rates to Medi-Cal plans resulting in $452.6 million General Fund savings, including a retroactive rate reduction going back to July 2019.
- A 4-month, 10% rate increase to Skilled Nursing Facilities to support COVID-19 response.
Other Medi-Cal proposals:
- Delay implementation of the CalAIM initiative, resulting in a decrease of $347.5 million General Fund in 2020-21.
- Withdraw proposal to provide payments to non-hospital clinics for 340B pharmacy services for a savings of $26.3 million General Fund in 2020-21, but continue planned implementation of Medi-Cal Rx for January 2020.
- Remove $45.1 million General Fund in 2020-21 in associated funding for the Behavioral Health Quality Improvement Program.
- Revert one-time $20 million General Fund for behavioral health counselors in emergency departments that was approved in 2019 Budget.
- Revert one-time $5 million General Fund for the Medical Interpreters Pilot Project that was approved in the 2019 Budget.
- Adjustment of $5.1 billion General Fund savings due to enhanced Federal Medical Assistance Percentage (FMAP) rate through June 30, 2021 and $1.7 billion saving from federally approved Managed Care Organization tax in April.
- Shift $50 million from the County Medical Services Program (CMSP) reserves in each of the next four fiscal years to offset CalWORKs costs, but maintains realignment annual allocation.
The May Revise proposes the following changes to other health programs:
- Covered California – keeps the additional state-based subsidies for households below 138% FPL and between 200-600% FPL. Because the take-up rate has been lower than anticipated, there are savings of $164.2 million for 2019-2020 and $90.3 million for 2020-2021, and $15 million in increased individual mandate penalty revenues in 2020-2021.
- Hearing Aids – the $5 million General Fund proposal to help cover the cost of hearing aids not covered by insurance for children in households up to 600% FPL is withdrawn.
- Medi-Cal’s Health Insurance Premium (HIPP) program in which Medi-Cal pays the premiums for eligible enrollees’ private insurance for $.7 million General Fund savings will be eliminated.
Housing Stability and Housing Supply
The Governor’s revised budget proposal includes a recognition of the devastating impact of the COVID-19 pandemic on the state’s finances as well as its disproportionate impact on low-income Californians, including with respect to housing. Importantly, the Governor’s May Revise outlines principles with respect to housing which we support, and are critical to recovering from the current crisis while advancing the goals of equity and inclusion. The proposal acknowledges the great need for increased stabilization and protection of tenants, and the related need to preserve and maintain existing affordable housing resources. At the same time, the proposal meets the current crisis and is informed by lessons learned from the foreclosure crisis by outlining the need to acquire properties and use public resources to ensure every Californian has a place to call home.
The Governor’s proposal stands for the principle that we cannot allow distressed properties to be acquired en-masse by entities which will utilize them as speculative investments, but rather must ensure community acquisition and control to advance our goals and put such properties to work solving our housing crisis.
With respect to housing production, we are heartened to see the Governor’s proposal maintain $500 million in funding for state tax credits for affordable housing construction. This program is critical for producing the units we need that can serve those hit hardest by our housing crisis. The Governor’s revised proposal also maintains various bonds and other funding streams for affordable housing production: approx. $277 million affordable housing funding from real estate transaction fees, approx. $452 million in cap and trade auction proceeds, and $4 billion in Prop. 1 bonds for affordable and veterans’ housing production.
The May Revise also recognizes available federal funding for affordable housing and necessary infrastructure to support it: $1.1 billion in CDBG funds for infrastructure and disaster relief stemming from the 2017-18 wildfires, and an additional $532 million in funding from the CARES Act for housing and homelessness. While the precise breakdown of proposed uses of this funding is not included in the Governor’s proposal, the proposal states these funds will be used to support ongoing efforts to address homelessness and to secure low- and moderate-income housing.
Recognizing the state’s dramatically reduced revenue projections, the Governor’s proposal also cuts several existing sources of funding for affordable housing that have not been dedicated to specific projects. The proposal includes $250 million in cuts to mixed-income development funds over the next three years, $200 million in cuts to the infill infrastructure grant program, and $115 million in cuts to various unnamed sources. Overall, we are pleased to see the level of funding for affordable housing in the Governor’s proposal, given the economic reality our state is facing.
Renters and Homeowners
The revised budget summary highlights actions that have been taken to provide temporary, emergency relief from evictions during the pandemic, but recognizes that increased support for both homeowners and renters will be critical to our recovery. At the same time, the Governor’s May Revise recognizes the economic reality we face after COVID-19, and makes reductions to multiple sources of funding for housing production.
The budget allocates $331 million in funds from the National Mortgage Settlement by providing $300 million for housing counseling and mortgage assistance to homeowners, and $31 million for grants to legal aid programs to assist struggling renters, which we estimate will enable these programs to provide eviction prevention services to up to 7,000-10,000 renters. While we are heartened to see this recognition of the need for renter assistance, as well as the critical role of California’s legal services programs in any disaster recovery effort, we are disappointed that the budget does not account for the scale of increased need for legal services for California’s 17 million renters. Legal assistance is most successful when paired with financial assistance and substantive legal protections against inappropriate eviction; Western Center echoes the Governor’s call for federal funding for struggling renters.
The May Revise reiterates the critical need to shield our unhoused residents from the COVID-19 pandemic, and the need to continue advancing solutions to reduce homelessness overall, while recognizing the reality of the state’s financial outlook. The May Revise proposes to maintain the $750 million level of funding contained in the previous budget proposal, but anticipates these funds to come from federal sources, and proposes to use this funding to acquire properties currently being used as temporary housing under Project Roomkey, to be operated by local governments or nonprofits. To date, the state has acquired approximately 15,000 units through this program, approximately half of which have been successfully occupied.
Additionally, the May Revise proposes to send $450 million in CARES Act funding to cities that did not get a direct allocation of CARES funds to reduce homelessness, $1.3 billion to counties for the same purpose, as well as a commitment to seek additional federal funds for various homelessness programs, including rapid rehousing, rental subsidies, and temporary/interim housing.
Today, Congress passed a $2 trillion aid package, the third piece of federal legislation to address the COVID-19 pandemic. While this aid package includes some direct payments, expanded unemployment benefits, and additional help for low-income communities and the organizations that serve them, it was passed without important benefits and considerations raised to address concerns for the poorest Americans, especially those who are living in deep poverty, people who are disabled or advanced in age, and people who are undocumented. The bill invests significantly more government aid for corporate America than it does for the people hit hardest by the crisis. We are hopeful that the fourth aid package, expected to be worked on by leaders while Congress is in recess for the next couple of weeks, will address these significant gaps.
Western Center is working hard to make sure that both the missed opportunities in the CARES Act and additional investments are considered in the next COVID bill, and we look forward to working with California’s Senators and our Congressional Delegation to make sure that happens.
The CARES Act expands eligibility and benefits for unemployment insurance, but it does not provide assistance for states to manage the cost of rising TANF (Temporary Assistance for Needy Families) caseloads, as was done in the 2009 American Recovery and Reinvestment Act (ARRA). TANF, known as CalWORKs in California, serves the poorest families with children by providing them a basic needs grant, work training and support, homelessness prevention, and subsidized employment. It is critical that Congress and the President provide increased funding for state TANF programs in the fourth COVID package. Unlike many states, California spends the bulk of its combined federal and state welfare funds on direct cash aid and supports to families. Still, it only serves approximately 60 percent of eligible families with a benefit, and in most cases, isn’t even above half of the Federal Poverty Level (FPL). As the needs increase and caseloads rise, the state may find it difficult to maintain the program at its current level. While California could receive about $1.6 billion for Supplemental Security Income recipients, and another $3.5 billion for the CalFresh (SNAP) caseload, we will need to keep working to make sure that national TANF investments include additional resources for low-income families to weather this storm.
The stimulus plan includes one-time income for many families and individuals, including very low income households. Unfortunately, the bill does not provide funding for households where one adult does not have a Social Security number (SSN). This means many households who pay taxes and may have American citizens or Legal Permanent Residents (LPR) in their households will receive nothing, despite the fact that payroll taxes are taken from their checks. Congress must address this gross inequity in the next COVID package; it will disproportionately deny aid to low-income workers of color, many of whom are essential workers on the front line of our service sectors.
For those families who are eligible, they will receive $1,200 payments for each adult and $500 for each child under the rebate program. These payments are available to households that filed a federal tax return for 2018 or 2019 even if the household payed no taxes. This is important because households with incomes under $25,000 are not required to file tax returns since they have no federal tax liability, so many do not routinely file taxes. As a result, many low-income families may not get a check unless they file a tax return by July 15th (the new extended tax filing deadline). This could prove challenging since many Volunteer Income Tax Assistance (VITA) centers and other tax preparers are closed during shelter in place, and most of them would have finalized 2020 activities as of April 15th, the regular tax filing deadline.
Currently, the IRS has information on its website on free options for filing taxes. The IRS is required to do a public education campaign on the rebates, which should provide more information on what people need to do to get the rebates. The federal government has discretion on how to get payments to people, so what the options are for non-filers (beyond filing a regular return) is yet to be determined and might differ for different groups. California will need to explore how it can assist low income households with filing returns so they can secure the resources needed to meet their basic needs. A summary of the rebate process can be found here.
Both the IRS and the state Franchise Tax Board (FTB) have long utilized tax intercepts to collect unpaid taxes from those getting tax refunds and Earned Income Tax Credit (EITC). According to the Tax Policy Center, the IRS will not be intercepting rebate checks to collect unpaid taxes. The Center also reports that the IRS has temporarily suspended interception of EITC payments for unpaid federal taxes. Click here for more on the IRS policy changes.
And today, after receiving a request from the Debt Free Justice Coalition, Western Center, and our Legal Services Allies, the FTB has announced it will use existing authority to immediately stop tax intercepts and all other debt collection practices (including bank levies and wage garnishments) for state government debt, with the exception of child support.
The CARES Act includes $900 million to help lower income households heat and cool their homes through the existing Low Income Heating and Energy Assistance Program (LIHEAP), and another $1 Billion to Community Services Block Grant (CSBG) to help communities address the consequences of increasing unemployment and economic disruption. These are flexible funds to alleviate poverty, so there will be great variation from community to community for how these funds are used.
The Cares Act provides $8.8 billion for child nutrition programs in the form of additional funding for food purchases and demonstration projects to increase flexibility for schools; $15.51 billion for SNAP; $100 million for food distribution to low-income households living on Indian reservations and participating Indian Tribal Organizations; $200 million for U.S. territories that cannot access SNAP (Commonwealth of Northern Mariana Islands, Puerto Rico, and American Samoa), in addition to annual block grant funding; and $450 million for commodities and distribution of emergency food assistance through community partners, including food banks.
The CARES Act investments in food security mainly support administration of existing benefits, and does not establish new benefits. It will help fund H.R. 6201 implementation, support caseworker staff needed to keep up with increases in applications and caseload, and fund waivers and other accommodations necessary to comply with COVID-19 stay-at-home orders and the impending recession that our economy will face. This is important not only because this workforce will be needed to help low-income Californians meet their basic needs, but also because the county social worker workforce is made up primarily of women of color.
We are disappointed the bill doesn’t include a needed benefit increase and pause on the implementation of Trump Administration cuts to SNAP food stamp benefits. We are committed to working with local, state, and national partners, as well as California’s U.S. Senators and our Congressional Delegation, to make sure the expected fourth COVID bill includes these investments and others that are necessary to address acute levels of hunger caused by extended school feeding and congregate meal closures, and prolonged stay-at-home orders.
Through the passage of the CARES Act, private health plans must cover COVID-19 testing free of charge. The CARES Act also requires health plans to cover vaccinations at no-cost when it becomes available. For older adults and individuals with disabilities, the CARES Act enhances several Medicare benefits, including coverage of COVID-19 vaccination when it becomes available, more flexible provision of telehealth services, and a three-month supply of prescription drugs. For Medi-Cal beneficiaries who receive unemployment benefits under this act, these payments will not affect their Medi-Cal eligibility.
The CARES Act requires price transparency for COVID-19 testing but does not place a limit on testing costs which may skyrocket as the demand for testing increases and testing supplies remain low. Consumers will also face challenges to accessing affordable coverage for COVID-19 treatment. The CARES Act contains no prohibitions on surprise billing, such as additional costs patients often incur when using emergency care services, and no measures addressing the high out-of-pocket costs that many patients will have to pay for COVID-19 treatment. Even with this third emergency act, the federal government still has not authorized state Medicaid programs to cover COVID-19 treatment for those who are uninsured and undocumented.
The CARES Act provides for (1) a forbearance period for borrowers with Federally-backed loans who are financially impacted by COVID-19, (2) a moratorium on foreclosures of Federally-backed loans, and (3) a moratorium on evictions from public housing or housing with Federally-backed mortgages.
Under the CARES Act, borrowers with Federally-backed mortgages may request a forbearance on the loan if they are experiencing a financial hardship during the COVID-19 emergency. The forbearance can last for 180 days and may be extended at the request of the borrower. No fees, penalties, or additional interest will accrue for borrowers during the period of forbearance. The CARES Act also provides a moratorium on foreclosures of federally-backed mortgages. Borrowers with Federally-backed multifamily mortgage loans may obtain forbearance of 30 days, which may be extended, and during the period of forbearance, are prohibited from evicting a household solely for non-payment. Importantly, the Act provides a 120-day moratorium on eviction filings for most federally subsidized rental housing, as well as for any housing that has a Federally-backed mortgage or multifamily mortgage loan if the eviction is based on non-payment. Borrowers curious about their mortgages can look up the information through Fannie Mae, Freddie Mac, or by contacting your own mortgage company.
The CARES Act also dedicates $4 billion to the expansion of the existing Emergency Solutions Grant program intended to be used for people experiencing or who are at risk of homelessness. These funds can increase shelter capacity, allow communities to reconfigure shelter space to adhere to physical distancing guidelines, deliver medical care to people who acquire the virus or may be at higher risk, and provide short-term rental or utility assistance so that people who have lost jobs or income don’t also lose their housing. Although the funds can be used for emergency assistance, the needs of shelters (and creating alternatives to current shelter options) are so great that there is unlikely to be sufficient funds to address all the emergency needs that come with such high rates of joblessness. It is unclear how California will use this funding.
For a PDF of this analysis, click here.
Last week, Governor Newsom unveiled his $222 billion 2020-21 budget proposal. Western Center’s summary of the proposal can be found here.
The state is in its 11th year of increasing tax revenue, and estimates a $5.6 billion budget surplus over existing obligations. The budget continues the practice of prioritizing saving state revenue for future years by increasing the Rainy Day fund to $18 billion and paying down state debts to reduce state payments in future years.
Governor Newsom is focused on addressing many long standing issues, particularly the homelessness and housing crisis. The budget proposes to allocate $1.4 billion to a variety of solutions, including $750 million in one-time funding to shore up board and care facilities, provide rental assistance to those at risk of or experiencing homelessness, and to fund adaptive re-use of existing structures to create additional housing that people experiencing homelessness can afford. The budget also includes substantial new funding for health care, including a proposal for the state to manufacture prescription medications and to expand health care to undocumented seniors.
The budget proposal does not include the third step of CalWORKs funding that would bring grants to 55 percent of the federal poverty level. Instead, the budget proposes a 3.1 percent increase for CalWORKs grants in October 2020. The budget also provides no increase in state funding for Supplemental Security Income (SSI/SSP) grants, keeping in place recession era cuts that have still not been restored.
The Governor’s budget proposes $750 million in one-time funds to be deposited in the new California Access to Housing and Services Fund, which the Governor recently created by executive order. The fund would be administered by the Department of Social Services, which would allocate dollars to “regional administrators” to be used to provide short- and long-term rental subsidies to people at risk of or experiencing homelessness, create additional housing units affordable to people with extremely low-incomes, and stabilize licensed board and care facilities around the state. How funds would be allocated and administered remains open to negotiation.
The budget proposes a one-time $500 million increase in the state Low-Income Housing Tax Credit program, which funds the production and rehabilitation of housing affordable primarily to households with incomes between 30% and 80% of area median income (AMI).
CalWORKs: CalWORKs has gone through a period of substantial investment. In 2019, the budget included funding for a 13 percent grant increase, expanded the earned income disregard to $500 a month, and stabilized CalWORKs child care for families. This budget is not as ambitious as prior years, though it does provide a 3.1 percent increase in grants beginning October 2020. This will increase grants for a family of three by about $25 a month. However, it was anticipated that CalWORKs grants would be raised to 55 percent of the federal poverty level to ensure no child lives in deep poverty. This budget proposal will not achieve that goal.
The budget does include funding to increase the CalWORKs child support pass through. Under current law, the first $50 of child support paid by the non-custodial parent goes to the CalWORKs family, but any amount over that is used to pay for the cost of welfare benefits to the state and federal government. Beginning January 2022, CalWORKs families with one child will keep the first $100 of child support, and families with two or more children will keep the first $200 of child support.
We are grateful the Governor heard parents and families in their call for a child support program that works for children. The increases to child support pass through and relief from government-owed, uncollectable debt proposed by the Governor look like a good start. We are eager to see the associated proposed trailer bill law changes so we have more details, and look forward to working with the Governor and legislature to achieve the goals of conforming with federal law and regulation, and ensuring the program works to benefit the children it purports to help.
Fines and Fees: The budget proposes to expand the traffic court ability to pay pilot program statewide. Currently, an eight county pilot program (operational in four counties) allows persons to adjudicate traffic tickets through an online portal and reduce fines by at least 50 percent for low income drivers. The budget would expand this pilot statewide over several years to all counties. The pilot has yet to be evaluated.
Additionally, the budget makes a $92 million investment in reducing criminal justice fees and their harmful, recidivistic impact on people with low-incomes and people of color, their families, and their communities. We are grateful to Budget Chair Mitchell for her leadership on this issue and look forward to working on details with her, the Governor, and other budget leaders.
SSI/SSP: The SSI/SSP caseload continues to decline, and as a result, state funding for the state supplemental program (SSP) is declining. In the 2020-21 budget the administration projects a 1.6 percent decline in SSP spending to $2.66 billion, down from $2.73 billion in the 2019-20 budget. This continues a trend of declining state spending for disabled and elderly adults. As recently as the 2016-17 budget, the state spent $2.87 billion. Rather than invest savings from caseload declines into grants, the savings are going into the General Fund for other purposes. SSI/SSP grants are critical for paying the cost of housing; this failure to invest in SSI grants will put more recipients at risk of homelessness.
Expands full-scope Medi-Cal to all income-eligible undocumented adults age 65+ (Health4AllSeniors): Building on the 2019 Budget, which made California the first in the nation to expand full-scope Medi-Cal to adults up to age 26 regardless of immigration status, the Governor’s recent proposal includes $80.5 million ($64.2 million General Fund) to expand full-scope Medi-Cal to all income-eligible undocumented adults age 65 and older. This would benefit about 27,000 older adults, to be implemented no sooner than January 1, 2021. Full implementation costs are projected to be approximately $350 million ($320 million General Fund) in 2022-23 and ongoing.
Delays 2019 Budget Act suspensions from December 31, 2021 to July 1, 2023: The 2019 Budget made important Medi-Cal investments that were to be suspended on December 31, 2021 and the proposal delays these suspensions by 18 months. This includes restoration of Medi-Cal benefits (optical, audiology, podiatry, speech therapy, and incontinence creams and washes), extension of Medi-Cal eligibility from 60 days to one year for post-partum women diagnosed with a mental health disorder, expansion of Medi-Cal screening for the overuse of opioids and illicit drugs, and Prop 56 supplemental payments to providers.
Funding for CalAIM (recently renamed to Medi-Cal Healthier California for All Initiative): The Governor’s proposal includes $695 million ($348 million General Fund) for CalAIM effective January 1, 2021 and ongoing. Despite the name change, the administration continues to advance policy changes released in October’s proposal. The proposal still terminates the Health Homes Program (HHP) despite loss of enhanced federal match rate and the Whole Person Care (WPC) program, and includes $225 million to implement the new statewide enhanced care management benefit through plans. Plans will have the option of providing housing transition services, currently provided under HHP and WPC, and other services In Lieu of Service. The Dental Transformation Initiative will end December 2020, but $112.5 million is proposed to continue and expand program elements including provider incentives for preventive services (expanded to adults); provider incentive payments for continuity of care (expanded to adults); caries risk assessment, and adding silver diamine fluoride as a covered service for children.
Termination of Dental Managed Care in Medi-Cal: The administration proposes transitioning Medi-Cal dental services from a managed care delivery system, currently mandatory in Sacramento and optional in Los Angeles, to a fee-for-service (FFS) system in January 2021. A net zero fiscal impact is estimated due to small administrative savings offset by higher dental utilization in FFS system. However, any transition will have to ensure existing consumer protections for enrollees in dental managed care, including network adequacy requirements, continuity of care protections, and a strong grievance and appeal process.
Medi-Cal Medication Assisted Treatment Benefit Changes: The administration proposes adding all FDA approved drugs (specifically buprenorphine and buprenorphine-naloxone combination) to treat opioid addiction as a Medi-Cal benefit. Currently, only methadone and naltrexone is covered for Medi-Cal enrollees needing Medication Assisted Treatment; adding two new drugs is estimated to cost $876,000.
Prescription Drug Cost Containment: The Governor proposes to continue last year’s Executive Order to carve-out the Medi-Cal managed care benefit from managed care to fee-for-service effective January 1, 2021 to include savings that are partially offset by creation of a new supplemental payment pool for non-hospital clinics for 340B pharmacy services. The Governor also proposes to establish the state’s own generic drug label to manufacture certain generic drugs, establish a single market for drug pricing within the state to combine purchasing power, and expand authority to negotiate with manufacturers internationally for Medi-Cal supplemental rebates.
Potential Public Option: With more details to come, the Health and Human Services Agency will develop options to strengthen enrollment, affordability, and choice through Covered California, including leveraging the network of existing public Medi-Cal managed care plans.
Office of Health Care Affordability: The administration proposes the establishment of the Office of Health Care Affordability in spring 2020 to increase price and quality transparency, and to reduce costs to generate savings to directly-impacted consumers.
Hearing Aids for Children: The budget proposes to create a state program to assist families with the cost of hearing aids and related services for children without health insurance coverage for households with incomes up to 600% FPL.
Behavioral Health: The administration proposes to establish the Behavioral Health Task Force Agency and strengthen enforcement of behavioral health parity laws. The Department of Managed Health Care’s enforcement will focus on timely access to treatment, network adequacy, benefit design and plan policies. The administration also supports updating the Mental Health Services Act to focus on people with mental illness experiencing homelessness, those involved in the criminal justice system, and for early youth intervention.
“Even with all this evidence that fees are recidivistic and fees are bad for children and bad for communities of color … we still end up with counties choosing to continue to collect them, and that’s really disappointing,” said Jess Bartholow, legislative advocate at the Western Center on Law & Poverty, which sponsored the original legislation. “Why would we allow these fees to continue to be out there and create harm?”
First and foremost, Western Center is pleased that Governor Newsom’s proposed budget includes significant and innovative proposals to address the homelessness crisis in California, which will not only help the thousands of people currently experiencing homelessness, but will also prevent more people from losing their housing. We are also pleased to see the Governor take another major step toward providing health care for all by expanding Medi-Cal coverage to undocumented adults over age 65, and to see the extension of the tax ban on period products and diapers, which makes our tax code more equitable for women, girls and young families.
We were hoping to see additional investments for CalWORKs and SSI grants in this proposal, since they are both crucial for lifting Californians out of poverty. We will continue to advocate for those increases in the final budget agreement.
Below are our initial reactions to the proposed budget by issue area. We will release an in-depth analysis next week.
The proposed budget appropriately treats the state’s homelessness crisis as an emergency. The proposal devotes additional resources to help people at risk of homelessness remain stably housed and to increase both temporary shelter capacity and permanent housing options for people already experiencing homelessness. We are pleased to see the Governor’s sustained commitment to addressing homelessness and look forward to working in partnership with his administration and legislative leaders to further develop effective, sustainable solutions to the crisis that prioritize residents living in poverty.
We agree with the Governor that the state must ramp up efforts to address the state’s shortage of housing, which is primarily a shortage at lower income levels. We are eager to work with the Governor to ensure that policies and programs to speed housing production prioritize the creation of units for households with the lowest incomes who are priced out of the rental market in every county in the state, protect low-income communities and communities of color from displacement, and increase access to high opportunity areas for our clients.
The budget includes funding to increase the CalWORKs child support pass through (read about it here). Currently, the first $50 of child support paid by a non-custodial parent goes to the CalWORKs family, but any amount over that is kept by state and federal governments. In the Governor’s newly proposed budget, CalWORKs families with one child will keep the first $100 of child support, and families with two or more children will keep the first $200 of child support, beginning January 2022. It also includes funding to provide debt relief for child support owed to the government that is deemed uncollectable. We are grateful that the Governor has heard from parents and families in their call for a child support program that works for children, and we are eager to see proposed associated trailer bill law changes for details. We look forward to working with the Governor and legislature to achieve the goals of conforming with federal law and regulation, and ensuring the program works to benefit the children it purports to help.
The budget also includes the extension of the tax ban on period products and diapers, which will make our tax code more equitable, since taxes on period products and diapers are regressive to poor families and young people. We look forward to continuing work in the legislature to end unmet diaper need and period poverty in California.
Additionally, the budget makes a $92 million investment in reducing criminal justice fees and their harmful, recidivistic impact on people with low-incomes and people of color, their families, and their communities. We are grateful to Budget Chair Mitchell for her leadership on this issue and look forward to working on details with her, the Governor, and other budget leaders. We’re also happy to see that Californians with low incomes will soon be able to reduce the cost of their traffic fines and the overall impact of expensive traffic tickets, with this budget proposing to expand the traffic court ability-to-pay pilot program (currently operational in four counties) statewide over several years. The pilot has yet to be evaluated, so we look forward to details from the Judicial Council to see if the program’s reductions in fines and fees are adequate or need to reduced further.
Finally, to further enhance financial security for Californians, the Governor’s budget creates a new state version of the Consumer Financial Protection Bureau (CFPB). The proposed financial watchdog will hold banks and other financial firms accountable when they engage in unfair and abusive debt collection and banking practices. Medical, student loan, school lunch, and other forms of debt disproportionally burden people experiencing poverty; we expect this new agency to offer important protections for our clients.
We applaud the Governor for continuing to move toward universal coverage by making California the first in the nation to expand full-scope Medi-Cal to all income-eligible seniors regardless of immigration status, taking a whole person approach to Medi-Cal, and cost containment with an eye toward quality and equity. We look forward to working with the administration and legislature to advance a budget that ensures equitable access to affordable, comprehensive, quality health care for poor Californians.
The Governor’s proposal also delays suspension of benefits and eligibility, by extending certain Medi-Cal benefits (optical, audiology, podiatry, speech therapy, and incontinence creams and washes), extending Medi-Cal eligibility from 60 days to one year for post-partum women diagnosed with a mental health disorder, and expanding Medi-Cal screening for the overuse of opioids and illicit drugs, all until July 2023.