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Overview of Western Center Priorities in the Final 2021-2022 California Budget

*PDF available here

After almost two months of negotiation, the Governor signed AB 128, the final 2021-22 budget passed by the Legislature. The Governor has not yet signed SB 129, which amends AB 128, and many trailer bills are not yet finalized. We will update this document as developments unfold.

As it stands, the budget marks progress for many Western Center priorities, including the expansion of health programs for new parents and undocumented Californians 50+, increased grants for CalWORKs and SSI/SSP recipients, increased funding for legal aid services, and increased investments in tenant protection.

FINANCIAL SECURITY

The state budget increases CalWORKs grants by 5.3 percent on October 1, 2021. Maximum grants by family size now slightly exceed 50 percent of the federal poverty level (FPL). CalWORKs households will also receive a $640 payment in July 2021 from the TANF Pandemic Emergency Fund. This budget increases the eligibility income disregard from $90 to $450 beginning May 2022.

CalWORKs Grants:

ACCESS TO JUSTICE/ FINES & FEES

The budget increases SSP grants by $36 a month beginning January 2022, and commits to making a second $37 payment starting in January 2024. It also eliminates the removal of people receiving the Transitional Nutrition Benefits for failure to fill out recertification paperwork within 30 days of the deadline.

The budget increases funding for the Equal Access Fund (EAF) by $50 million, for a total funding amount of $70 million. It also provides $40 million in funding for eviction prevention with 75% of those funds for organizations that receive EAF.

The budget provisionally repeals civil assessments for those who fail to appear or pay tickets in traffic courts. It also expands the online traffic adjudication pilot program to all counties. Indigent persons using the online tool get a minimum 50% reduction in the total fine amount and cannot pay more than $25 a month towards the remaining fine.

HEALTH CARE

The Medi-Cal budget has significant investments in eligibility, including elimination of the Medi-Cal asset test to ensure elders and people with disabilities are not impoverished by health care, expansion of Medi-Cal to all income-eligible adults age 50 and older regardless of immigration status, and Medi-Cal eligibility extension from 60 days to 12 months for all post-pregnancy individuals. Unfortunately, the budget excludes Medi-Cal coverage for undocumented adults ages 26-49 and continuous Medi-Cal coverage for children up to age 5.

Medi-Cal service expansions include addition of doula services, community health workers as a class of providers, continuous glucose monitoring systems for beneficiaries with diabetes, a permanent end to the suspension of certain benefits, and funding for field testing of translated Medi-Cal materials to ensure that documents are understood by the intended audience.

Even with the progress made in the budget, SB 65 (Skinner), the California Momnibus bill, still contains additional provisions to reduce maternal health disparities. AB 470 (Carrillo) will be amended to include any clean-up language for Medi-Cal asset test elimination.

In addition, there is funding for community-based organizations and local public health entities to address health disparities (delayed to July 2022), funding to zero out $1 Covered California premiums, and funding for the creation of the Health Care Affordability Reserve Fund to allow for future investment in Covered California subsidies.

HOUSING

The biggest success is AB 832, which will provide 100% payments towards arrears for eligible tenants who were unable to pay rent during the pandemic. The U.S Treasury dedicated a total of $5.2 billion in federal rental relief to support tenants for a total of 18 months. There is an additional $300 million in the national mortgage settlement funds for homeowners and $1 billion to the CA Housing Finance Agency for mortgage assistance and principal reductions, as well as an additional $100 million to expand CalHFA First Time Homebuyer Assistance Program.

There aren’t many changes from the May Revise for housing production. This budget includes:

  • $1.75 billion in one-time general funds to support Housing and Community Development affordable housing projects — 6,300 projects are currently shovel ready.
  • $81 million in one-time funds to expand CalHFA’s Accessory Dwelling Units (ADU) program.
  • $300 million in one-time funds to sustain Housing and Community Development legacy project affordability requirements.
  • $50 million for the Golden State acquisition fund.
  • $45 million in one-time GF to finance low- and moderate-income units.
  • Up to $500 million for Low Income Housing Tax Credits.
  • $50 million for farmworker housing.
  • $500 million in foreclosure intervention and housing preservation.

The budget also includes significant investments in homelessness funding:

  • $2 billion over two years for local jurisdictions to address homelessness.
  • $150 billion in one-time funds for RoomKey program to acquire and rehabilitate more housing facilities.
  • $2.75 billion for Project Homekey using American Rescue Plan Act and GF.
  • 50 million in one-time general funds for encampment resolutions services
  • $92.5 million in general funds in both 2021-2022 and 2022-2023 to expand program to provide housing support for eligible families experiencing homelessness in the child welfare system.
  • $50 million invested in the Homesafe program to support access to health, safety, and housing support for elderly people experiencing homelessness or at risk of homelessness.
  • $150 in general funds annually through 2023-2024 for people with disabilities who are experiencing homelessness under the Housing and Disability Advocacy program.
  • $40 million for homeless youth emergency service projects including rapid rehousing, rental assistance, transitional housing up to 36 months, supportive housing, housing navigation, and housing stability.
  • $25 million to the Department of Veterans Affairs that provide supportive services to homeless or at risk of homelessness veterans, for emergency or long-term housing support, among other things.

Finally, the budget includes an investment of $536,000 to the Department of Fair Housing and Employment to investigate and enforcement civil rights violations.

 

 

THANK YOU for voting in the MY LA2050 Grants Challenge!

Thanks to your votes, Western Center will be awarded $15,000 for our advocacy on behalf of Californians experiencing poverty – in L.A. and beyond.

We were one of 25 finalists in the 2021 My LA2050 Grants Challenge. LA2050 is a community-guided initiative created by the Goldhirsh Foundation to drive and track progress toward a shared vision for the future of Los Angeles. The foundation launched the My LA2050 Grants Challenge in 2013, inspiring ideas to create a better L.A.

We appreciate your support!

 

 

PRESS RELEASE: CA DMV Reports Lifting 554,997 Improperly Imposed Driver’s License Suspensions

FOR IMMEDIATE RELEASE

(Versión en español aquí)

DMV filing follows Court of Appeal ruling, marking an important step in the ongoing fight for fair traffic laws in California

SACRAMENTO, CA — In compliance with a California Court of Appeal ruling, the California Department of Motor Vehicles reported to the court that it lifted 554,997 improperly imposed driver’s license suspensions. The DMV action was the result of a statewide lawsuit, Hernandez v. CA Department of Motor Vehicles, in which several Californians challenged the DMV’s suspension of licenses based on drivers’ failure to pay traffic citations or appear in court. The plaintiffs were represented by Bay Area Legal Aid, Western Center on Law & Poverty, The ACLU of Northern California, East Bay Community Law Center, The USC Gould School of Law Access to Justice Practicum, The Lawyers’ Committee for Civil Rights of the San Francisco Bay Area (LCCRSF), and the law firm of Pillsbury Winthrop Shaw Pittman LLP.

In June 2020, the Court of Appeal agreed with the plaintiffs that state law only allows a license to be suspended for a failure to appear in court when the traffic court notifies the DMV that the failure to appear was willful. In November 2020, the parties reached an agreement under which the DMV would clear failure-to-appear suspensions that did not include the required notification of a willful failure to appear. The DMV also agreed to change its policies going forward and now will only suspend a license where a court notifies the DMV that the failure to appear was willful.

The DMV reported to the court that it cleared 554,997 suspensions in December 2020. Previously during the plaintiffs’ lawsuit, California ended the legal basis for suspending a license based on a driver’s failure to pay a traffic fine, and in 2018 the DMV lifted several hundred thousand existing failure-to-pay suspensions.

“A driver’s license is essential to one’s economic security,” said Rebecca Miller, an attorney with Western Center on Law & Poverty who represented the plaintiffs. “In the majority of cases, California suspended licenses of people who could not afford to pay their traffic tickets. The result did very little to make our roads safer, but it imposed a severe penalty on drivers with low incomes, making it harder for them to work and care for their families.”

The lead plaintiff, Guillermo Hernandez, had difficulty paying a traffic ticket in 2016 for expired registration and failing to update his license with the DMV. The unpaid ticket then prevented him from renewing his driver’s license and impacted his ability to work and earn money to support his two kids. “I am happy that our lawsuit helped so many people like me who could not afford their traffic tickets get their driver’s licenses back,” he said.

While the result in Hernandez provided critical relief to hundreds of thousands of Californians, it is important to note the significant issues that remain.

End Failure-to-Appear Suspensions

Despite the limitation affirmed by the Court of Appeal, California law still allows license suspensions based on a driver’s failure to appear in court before the due date on their traffic citation. The DMV’s filing stated more than 600,000 failure-to-appear suspensions remained as of January 2021.

In the overwhelming majority of cases, a driver’s failure to appear is the result of financial circumstances, for example, not being able to pay their ticket, afford legal assistance, or get time off work to go to traffic court. California should end failure-to-appear suspensions.

State law does not require courts to notify the DMV of a driver’s failure to appear. During the COVID-19 pandemic, some courts, including Marin County, have temporarily halted this practice.  “The harms caused by California’s expensive traffic tickets and punitive license suspensions existed before and will continue to exist after the pandemic,” said Elisa Della-Piana, Legal Director at Lawyers’ Committee for Civil Rights of the San Francisco Bay Area. “Now is the time to end this counterproductive practice.”

At a minimum, courts should use willful failures to appear sparingly in the small subset of cases where the driver is a repeat offender and the failure to pay traffic tickets or come to court is not due to financial circumstances. Traffic courts are not in a position to conclude that a driver’s failure to come to court is willful if the court is not providing drivers with information about how to request a fine reduction based on income and how to resolve their ticket online, or by mail.

End Civil Assessments

In California, drivers who don’t go to court or pay their traffic tickets by the deadline are hit with $300 civil assessments. This penalty and other later fees can exponentially increase the cost of a traffic ticket and can turn a $250 ticket into close to $900 within just a few months. While state law provides that traffic courts “may” impose this penalty “up to” $300, in most counties the full amount is assessed automatically by the court’s case management system with no consideration of the individual circumstances or the underlying violation. Advocates have also raised concerns about conflict of interest because most of the money from civil assessments goes to fund the courts. Trial courts that collect civil assessment revenue beyond a threshold amount are rewarded with an apparent proportional return of that money from the trial court trust fund.

“The widespread trial court practice of automatically imposing the full $300 amount reflects the questionable incentives set up by the current funding system,” said Novella Coleman, Litigation Director at Bay Area Legal Aid. Furthermore, the Judicial Council Trial Court Budget Advisory Committee acknowledged this problem as recently as April 2020 when it proposed changes to the current funding system to reduce the “perceived conflict of interest” and to reduce reliance on this “[u]nstable funding” stream, which “makes it impossible to provide fair, equitable and timely justice to all litigants.” The state Department of Finance rejected the proposal.

“We believe that it is essential to reform a funding system that is currently based on the racialized extraction of wealth from the most economically challenged Californians, predominantly Black and brown communities,” said William Freeman, Senior Counsel at the ACLU of Northern California.

Reform Driver’s License Suspensions for Child Support Arrears

California has made important strides to end driver’s license suspensions that are not based on unsafe driving. However, one significant area that still needs reform is driver’s license suspensions for child support arrears. California’s suspension process is one of the most punitive in the country and does not consider individual circumstances. As a result, many driver’s license suspensions make it harder for parents to work and support their children.

“California should continue the moratorium on license suspensions for child support arrears until the process can be reformed,” said Michael Herald, Legislative Director for Western Center. “Suspending licenses to reimburse the government for public benefits, for example, causes unnecessary harm to parents and stresses family relationships without sending any additional money to the children whose well-being the system is supposed to protect.”

Contact: Courtney McKinney, cmckinney[at]wclp.org

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The ACLU of Northern California is an enduring guardian of justice, fairness, equality, and freedom, working to protect and advance civil liberties for all Californians.

Bay Area Legal Aid is committed to providing meaningful access to the civil justice system through quality legal assistance regardless of a client’s location, language or disability. As the only regional poverty law firm in the Bay Area, we work with 20,000 or more low-income Bay Area residents each year, opening access to the civil justice system and providing high quality legal assistance in areas of law that most significantly affect low-income people’s self-sufficiency: economic security/public benefits, housing stability and homelessness prevention, family law and domestic violence prevention, health care access and equity, and consumer law. Our litigation and advocacy practice extends this impact beyond our clients to improve health, safety, and stability for tens of thousands more low-income Californians per year.

The East Bay Community Law Center was founded in 1988 by Berkeley Law students committed to addressing the intractable social determinants that contribute to poverty and inequity. Today, the organization operates 8 nationally recognized anti-poverty clinics that provide free legal services to over 8,000 Alameda County households and train over 150 law students annually, while advancing policy solutions to disrupt systemic racism.

The Lawyers’ Committee for Civil Rights of the San Francisco Bay Area (LCCRSF), one of the West Coast’s oldest civil rights organizations, protects and promotes the rights of people of color, immigrants, and low-income people in California.

Pillsbury Winthrop Shaw Pittman LLP is an international law firm with a particular focus on the technology & media, energy, financial, and real estate & construction sectors. The firm’s pro bono caseload is as varied as our lawyers’ interests, ranging from affordable housing to civil liberties, advocacy for victims of abuse and voting rights.

The Access to Justice Practicum at USC Gould School of Law in Los Angeles provides a hands-on opportunity for law students to work as colleagues with public interest lawyers and supervising faculty on civil rights and anti-poverty advocacy and litigation.

Through the lens of economic and racial justice, Western Center on Law & Poverty fights in courts, cities, counties, and in the Capitol to secure housing, health care and a strong safety net for Californians with low incomes.

 

 

 

PRESS RELEASE: Advocates call on Riverside County Superior Court to stop civil assessments on unresolved traffic tickets

FOR IMMEDIATE RELEASE

Riverside County’s practice of automatically adding up to $600 when a driver misses court or doesn’t pay a ticket violates state law and constitutional protections.

SAN FRANCISCO — Riverside County Superior Court is illegally adding hundreds of dollars in civil assessments to unresolved traffic tickets, according to a demand letter sent by Western Center on Law & Poverty and the American Civil Liberties Union of Southern California.

Riverside County’s traffic court automatically adds multiple $300 civil assessments on to California’s already expensive traffic tickets, without considering the circumstances of individual cases as state law requires. The oversized civil assessments are an excessive fine under the state and U.S. Constitutions, adding $600 to a $50 or $100 base fine. The advocates also say the court receiving income from these fees creates a conflict of interest.

“Civil assessments are inequitable and exacerbate wealth extraction from overpoliced Black and brown communities,” said Adrienna Wong, attorney at the ACLU of Southern California. “What’s more, because the money from civil assessments goes into the state Trial Court Trust Fund, courts have an interest in imposing more and larger civil assessments. Instead of doubling down on a structure that rewards courts for imposing civil assessments and deprives drivers of impartial decision makers, California could fund courts directly.”

More often than not, the failure to resolve a traffic ticket is the result of poverty, including the inability to pay and lack of access to legal assistance. Often, a driver’s failure to come to court or pay their ticket stems from transportation barriers, insufficient childcare, inflexible work schedules, disability, or homelessness.

“California’s traffic ticket system is broken,” says Rebecca Miller, a senior litigator for Western Center on Law & Poverty. “Despite multiple amnesty programs and other efforts to provide relief to drivers with low incomes, there are still billions of dollars in unpaid traffic debt. Adding hundreds of dollars to unresolved traffic tickets does not make people pay their tickets; these failed policies make it harder for people to work and create more obstacles for Californians trying to pull their families out of poverty.”

Civil assessments punish those who face added barriers to payment or court appearance, thus widening inequality and disproportionately targeting people with low incomes, people of color, people with unstable housing, and people with disabilities. This is exacerbated by the economic devastation of the pandemic, which has fallen harder on Californians with low incomes and people of color.

The demand letter sent to Riverside Superior Court describes how its traffic court policies are stricter than what state law provides. For example, the traffic court only allows drivers 10 days to ask the court to excuse their non-appearance or non-payment, but state law provides 20.

Additionally, Riverside traffic court’s forms artificially restrict the reasons someone may be excused for not coming to court on a ticket by only providing check boxes for medical incapacitation/hospitalization, incarceration, and military orders.[1] State law says that a driver may be excused for “good cause” and does not limit it to those three categories.

Advocates are asking the Riverside court to stop imposing civil assessments, and to bring its policies into compliance with state and federal law. Change may also come at the state level, because the Legislature’s proposed budget would repeal civil assessments and increase direct funding to the courts.

Contact: Courtney McKinney, cmckinney[at]wclp.org

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[1] Riverside Superior Court Form # RI-OTS38 [Rev. 10/13/17].

Analysis of Governor Newsom’s May Revision of California’s 2021-2022 Budget

*PDF of this analysis available here.

Over the past year, millions of Californians experienced the most devastating pandemic and economic downturn in nearly a century. The cumulative impact of COVID-19 has caused financial devastation and a prolonged period of wealth and asset stripping from Californians unlike anything in recent memory. With that in mind, we see this budget revision by the Governor as a mixed bag.

While it includes notable investments in homelessness and housing funding and health care, it falls short in meeting the existing needs of Californians with low incomes. Doing so would include providing health care for ALL, restoring decade-old cuts to grants for SSI recipients, insuring CalWORKs families have enough income to allow children to thrive, and helping those who are in debt and threatened with eviction due to the pandemic receive justice. The $76 billion budget surplus is more than adequate to meet those needs, and we call on the Legislature to revise the Governor’s budget proposal to ensure that families with low incomes receive a truly historic investment.

OVERVIEW

Governor Newsom’s 2021-22 May Revision of the California budget includes an unprecedented level of state funding. Despite high unemployment for the past year and increased state costs in responding to the pandemic, the budget has $41 billion more in state revenue than anticipated in the January budget. When combined with federal funds, the total surplus is more than $75 billion. These figures could change (likely higher) since the April tax deadline was pushed back by one month.

For the first time in nearly 40 years, budget funding exceeds the Gann Limit, which caps state budget spending based on a formula that limits budget growth to population increases and inflation. The budget anticipates that state funding will exceed the Gann Limit by $16.2 billion in 2023, and in response expands the Golden State Stimulus tax refunds to families earning less than $75,000 and increases state funding for K-12 education.

The proposed budget includes substantial reserve funds including $15.9 billion in the Proposition 2 Budget Stabilization Account (Rainy Day Fund) for fiscal emergencies, $450 million in the Safety Net Reserve, $4.6 billion in the Public School System Stabilization Account, and $3.4 billion for the state’s operating reserve.

The Senate Budget and Fiscal Review Committee analysis provides more specifics on the Governor’s budget.

ACCESS TO JUSTICE

Traffic Fines

The budget includes $300 million in one-time spending for debt forgiveness on uncollectible traffic court debts, which would eliminate 100 percent of debt for applicants with low incomes. However, this funding level is inadequate to meet the actual need, as there is more than $8 billion in uncollected traffic debt outstanding.

We are encouraged by the proposal for traffic fines but urge the Governor and Legislature to go far beyond what the Governor proposed. The state needs to undo the archaic policies that criminalize people in poverty – predominately in Black and brown communities, and eliminate criminal system administrative fines and fees. We are co-sponsoring SB 586 (Bradford) to eliminate the rest of the fines and fees that were not eliminated last year.

Legal Aid for Renters in Landlord-Tenant Disputes

The May Revision includes $20 million federal ARPA funds annually for three years ($60 million total) to provide legal aid services for renters and homeowners to avoid eviction and foreclosure. Specifically, these additional funds will provide free legal services for landlord-tenant issues, including legal assistance for counseling, renter education programs, and preventing evictions. More about this can be found below in the housing section.

HEALTH

The Governor’s May Revision includes major health care expansions, including expanding full-scope Medi-Cal to all income-eligible seniors age 60+ regardless of immigration status (Health4AllElders), adding the services of doulas and community health workers as Medi-Cal benefits, extends Medi-Cal eligibility for postpartum individuals, eliminating Medi-Cal program suspensions, and making $4 billion in behavioral health investments for children and youth under age 25. Unfortunately, the May Revision does not include a repeal of the Medi-Cal asset test, funding to build out housing support service capacity as part of CalAIM, or complete Health4All by adding adults ages 26-59.

Medi-Cal

  • The May Revision proposes to expand full scope Medi-Cal for adults 60 years and over regardless of immigration status, to be implemented no sooner than May 1, 2022. Health4AllElders is expected to cost $68 million ($50 million General Fund), fulfilling and building upon last year’s budget commitment of elders age 65+, and is expected to cover an additional 80,000 people. Trailer bill language (TBL) is forthcoming.
  • The proposal adds doula services as a Medi-Cal benefit to be implemented January 1, 2022 and includes $402,584 ($152,043 General Fund) in FY 2021-22 and approximately $4.4 million ($1.7 million General Fund) annually at full implementation. TBL is forthcoming.
  • The proposal adds Community Health Workers to the class of individuals who can provide Medi-Cal covered services to be implemented January 1, 2022 at a cost of $16.3 million ($6.2 million General Fund) in FY 2021-22 and increasing to $201 million ($76 million General Fund) by 2026-27.
  • The proposal includes one-time $315 million ($31.5 million General Fund) to provide population health management services as part of a CalAIM initiative that would centralize administrative and clinical data from the Department, health plans, and providers to better identify and stratify member risks and allow providers and beneficiaries to see what additional services are available.
  • The May Revision includes one-time $200 million ($100 million General Fund) to build capacity for effective pre-release care for justice-involved populations to enable coordination with justice agencies and Medi-Cal coverage of services 30 days prior to release.
  • The proposal includes an additional one-time budget allocation of $9.3 million to expand a current pilot that provides medically tailored meal intervention services to a broader population, which includes Medi-Cal participants with diabetes, chronic obstructive pulmonary disease, renal disease, chronic kidney disease, cancer, and malnutrition, and adds Fresno, Kings, Madera, Santa Cruz, and Tulare counties to the service area.
  • The proposal permanently ends the suspension of Medi-Cal benefits and provider rate funded through Medi-Cal and will have TBL. Specifically, the following will no longer sunset:
    • Optional benefits restored in the 2019 budget, specifically audiology and speech therapy services, incontinence cream and washes, eyeglasses and contacts, and podiatric services.
    • Supplemental provider payments and elimination of the AB 97 rate freeze.
  • The proposal expands accelerated enrollment to adults, ages 19 through 64, to provide immediate and temporary benefits while income verifications are pending at a cost of $14.3 million ($7.2 million General Fund) in FY 2021-22. Also see our earlier announcement of settlement in our Rivera Medi-Cal case.
  • The proposal revises its telehealth policy (TBL forthcoming) to set rates for audio-only telehealth at 65% of the Medi-Cal rate for the service rendered in fee-for-service, and comparable alternative to prospective payment system (PPS) rates for clinics. Only providers who can provide in-person services to each client served by synchronous and audio-only telehealth can claim Medi-Cal reimbursement for the service.
  • Federal funding from American Rescue Plan Act:
    • Medi-Cal eligibility extension from 60 days to 12 months for all postpartum individuals for 5 years.
    • Increased Federal Funding for Home and Community-Based Services (HCBS).
    • Increase in payments to disproportionate share hospitals of $1.1 billion ($105 million General Fund) in FY 2021-22.
    • Increased Substance Abuse and Mental Health Services Administration (SAMHSA) Block Grant Funding.
  • The proposal includes $5 million ($2 million General Fund) in FY 2020-21 and $18 million ($9 million General Fund) in FY 2021-22 to provide specialty mental health services to foster youth returning from out of state and other youth with similar level of needs that otherwise would have been placed out of state.
  • The May Revision proposes ending dental managed care and restoring dental fee-for-service in Sacramento and Los Angeles to be implemented January 1, 2022 for a savings of $20 million ($8 million General Fund.) TBL forthcoming.
  • The May Revision includes $4 billion investment in behavioral health services for children and youth, including:
    • Procuring a business services vendor to implement an all-payer behavioral health direct service and supports virtual platform to be integrated with screening, app-based supports, and direct behavioral health services for children and youth age 25 and younger.
    • Building infrastructure, partnerships, and capacity statewide to increase access to ongoing behavioral health prevention and treatment services on or near school campuses.
    • Grants to Support Development and Expand Age-Appropriate and Evidence-Based Behavioral Health Programs for Children and Youth.
    • Behavioral Health Continuum Infrastructure Program to provide competitive grants to qualified entities to construct, acquire, and rehabilitate real estate assets to expand the community continuum of behavioral health treatment resources funded at $2.455 billion over three years.
    • $50 million one-time provider training in FY 2022-23.
    • New Dyadic Services Benefit in Medi-Cal that provides integrated physical and behavioral health screening and services to the whole family funded at $200 million total ($100 million General Fund) ongoing.
  • The May Revision includes $12.6 million ($4.4 million General Fund) to reimburse specialty pharmacies for services provided to beneficiaries with complex drug therapies in the fee-for-service delivery system, effective July 1, 2021.
  • The May Revision includes one-time funding of $73 million ($36.5 million General Fund) in each of 2021-22 and 2022-23 to resume annual Medi-Cal redeterminations upon conclusion of the federal public health emergency and continuous coverage requirement.
  • The May Revision includes $300 million one-time federal fund to help public health hospitals cover costs associated with critical care delivery needs provided during and beyond the pandemic.

Other Health Proposals                                                  

  • The proposal includes $20 million ongoing to zero out $1 premium for health plans due to federal policy concerning abortion coverage.
  • The proposal sets aside $333.4 million in a Health Care Affordability Reserve Fund to deposit individual mandate penalty revenue in the event the federal subsidies are not extended, and to allow for future investment in Covered California subsidies for future affordability investments, but returns $732 million to the General Fund in unspent state subsidies.
  • The proposal includes $20 million one-time General Fund for language access services across Health and Human Services programs and builds upon January’s proposal to develop and implement an HHS-wide policy framework to improve language access standards across programs and services.

HOUSING & HOMELESSNESS

The Governor’s May revise increases funding for housing and homelessness programs to a grand total of $9.3 billion and $12.4 billion respectively. Building on Legislative efforts to keep Californian’s housed throughout the pandemic and protect renters from eviction, $5.2 billion have been assigned to bolster California’s Emergency Rental Assistance Program (ERAP) to pay 100% of retroactive and several months of prospective rent for Californian’s unable to pay their rent due to the pandemic.

Record unemployment and loss in hours and wages has left many Californians struggling to pay rent and utilities including water, power, and gas. In recognition of this hardship, the revise has allocated an additional $2 billion to cover the costs of utility bills. We commend this critical investment and urge the Governor and Legislature to continue to work with community and equity partners to improve the program and ensure the rollout of the funds is as quick as possible. We also implore the Governor and Legislature to critically examine and improve the HCD ERAP application so renters and landlords can receive the full benefits of the rental assistance program. We cannot take our foot off the pedal now.

The revise allocates $12.4 billion to combat the issue of homelessness in California, which has the highest number of people experiencing homelessness in the United States. The Governor’s proposal focuses on current state programs such as Project HomeKey, which focuses on the acquisition and rehabilitation of facilities for housing, and Project RoomKey which uses empty motels and hotels to provide temporary shelter during the pandemic for people experiencing homelessness.

Additional attention is given to encampment cleanup and safety inspections — we are concerned that the proposed partnership with CalTrans may encourage sweeps, and incorrectly targets trash cleanup as a priority instead of investing in the avoidable humanitarian crises at hand. We should focus our resources on ensuring that all Californians have access to safe, stable, affordable housing and target the root of the problem.

The revise also allocates $20 million a year for three years for legal services for those who are at risk of eviction. This minimal investment fails to recognize the increasing need for legal services, which was already severely underfunded. With eviction protections set to expire on June 30, 2021 and reports of a slow roll out of the rental assistance funding, there will be an eviction tsunami that the courts and legal services providers are simply not prepared or funded for. The revise also does not include any additional funding for the state to comply with the U.S Supreme Court decision, Jameson v. Desta, which is critical to ensuring that litigants have full access to their due process rights. Thus, the $20 million allocated by the Governor does not match the need from community.

Lastly, the revise includes funding for housing production, one of the main contributing factors in California’s housing shortage. Among other proposals, the Governor proposes $1.75 billion in one-time funding to support Housing and Community Development affordable housing projects, 6,300 of which are currently shovel ready.

In summary, the May Revise makes the following investments:

Rent and Housing Relief

  • $5.2 billion in federal rental relief aid for state and local entitlement jurisdictions from the U.S. Treasury.
  • $331 million in national mortgage settlement funds for mortgage assistance for homeowners.
  • $1 billion to the California Housing Finance Agency (CalHFA) for mortgage assistance and principal reductions.

Housing Production

  • $1.75 billion in one-time general funds to support Housing and Community Development affordable housing projects, 6,300 projects that are currently shovel ready.
  • $81 million in one-time funds to expand CalHFA’s Accessory Dwelling Units (ADU) program.
  • $45 million to scale up excess land development.
  • $500 million for Housing and Community Development to provide planning and implementation grants to regional entities for infill developments, the goal of which is to reduce vehicle miles traveled (VMT) and align with the state’s climate goals.
  • $300 million in one-time funds to sustain Housing and Community Development legacy project affordability requirements.

Homelessness

  • $3.5 billion in one-time funds for HomeKey program to acquire and rehabilitate more housing facilities.
    • $1 billion of this funding is dedicated to families experiencing or at risk of experiencing homelessness.
  • Project RoomKey Transition
    • The budget provides $150 million to help transition individuals from short term Project RoomKey housing into permanent housing. Trailer bill language is anticipated that would provide more information on how these funds are to be used.
  • $40 million one-time general fund available over five years to Homeless Coordinating Financing Council for grants and tech assistance to jurisdictions.
  • $53 million in one-time general funds to “coordinate encampment outreach services” with CalTrans to connect unhoused individuals with services.
  • $475 million in general funds in both 2021- 22 and 2022-23 to expand the existing CalWorks housing support program.
  • $280 million in general funds in both 2021-2022 and 2022-2023 to expand program which will provide housing related supports to eligible families experiencing homelessness in the child welfare system.
  • $100 million in general funds dollars in 2021 and 2021 to support access to health, safety, and housing support for people experiencing or at risk of Adult Protective Services involvement.
  • $20 million one-time funding for deferred maintenance for seasonal farmworker rental housing.
  • $175 in general funds annually through 2023-2024 for people with disabilities who are experiencing homelessness under the Housing and Disability Advocacy program.

Student Housing

  • $4 billion in one-time general funds split evenly for fiscal years 2021-20221 and 2022-23 to invest in the low-cost student housing grant program.
  • An increase of $130,000 for the Homeless Youth Project through the California State Library.

Homeownership

  • $100 million to expand CalHFA First Time Homebuyer Assistance Program.

PUBLIC BENEFITS

The pandemic exposed significant gaps in our state’s social safety net that leaves many Californians to fend for themselves as the federal, state, nor local governments were able to find solutions during the global pandemic. However, the pandemic also provided a chance to build from the current safety net. We are encouraged by proposals in the May Revise that advance the goal of building a permanent safety net that captures everyone who calls the golden state home.

Food Security

Efforts by the Governor to tackle hunger are appreciated, however, the state must go far beyond the investment laid out in the May Revise to truly address hunger for all Californians. Many Californians continue to lack access to food, so the Governor and Legislature must make an investment that significantly invests in providing emergency food to all Californians, regardless of their immigration status.

  • In January, Newsom put in $35 million one-time to food banks to provide emergency food assistance, but no additional funding is included in the May Revise.
  • We are advocating for $800 million in emergency food assistance to all Californians, a proposal championed by Assembly member Santiago and prioritized by the Latino Caucus. The Governor must do a lot in in this budget to truly make a make a significant dent on hunger.

Free School Meals

During the pandemic, we’ve seen success in providing every school aged child free grab and go meals throughout California — we applaud the Governor for prioritizing Universal School Meals in the May Revise for all students to access free breakfast and lunch. This is a critical program that tackles hunger for children who live in food insecure homes. We look forward to working with the Governor and Legislature to ensure that all children have access to free breakfast and lunch.

  • Governor’s proposal: $150 million ongoing Proposition 98 General Funds to encourage local educational agencies to participate in one of the federal universal meal provisions. The flexible language is questionable; however, we believe that we may see this as a competitive grant.

Food Distribution

Another result of the pandemic is the disruption of how food arrives to communities. The Governor’s proposal creates additional funding to get older Californians enrolled in the CalFresh program and allocates funding to direct California grown food to reach urban communities.

  • Governor’s proposal:
    • $2 million ($1 million from general fund) ongoing allocated to the Department of Aging for outreach to older adults to enroll in the CalFresh program.
    • $68 million (in addition to the $10 million in the January budget for a total of $78 million) one-time funding to increase access to California grown food in urban communities. The proposal heavily supports small and urban farmers.
    • The ideas and intentions for these proposals are good, but the lack of detail does not promise that food will be redirected to existing food deserts or other communities where produce is not readily available.

CalWORKs

The May Revise provides a 5.3 percent increase for CalWORKs grants, an increase from the January budget proposal of 1.5 percent. This will raise grants for all family sizes above 50 percent of the federal poverty level. However, this increase fails to complete the agreement to raise CalWORKs grants to assistance unit plus one which would ensure that no child receives a CalWORKs grant that is less than half the federal poverty level.

The chart below compares current grant levels, where grants would be if funded under the 2019 agreement, and what the grant would be under the Governor’s May Revise budget. We call on the Legislature to fully fund CalWORKs grants to AU+ 1.


One Time CalWORKs Payments

The budget proposes to use $203 million in federal TANF Emergency Pandemic funds to provide a $640 one-time payment to all CalWORKs households. This payment will be provided in July and will be the second payment CalWORKs families receive in 2022.

CalWORKs Family Re-Unification Funding

The budget proposes $8,776,000 ongoing to provide cash assistance to parents whose children have been removed from the home and placed in out-of-home care and who would not otherwise qualify for CalWORKs.

CalWORKs Overpayments

The budget proposes to reduce the monthly amount collected from CalWORKs grants where a family got a cash assistance overpayment during the pandemic due to delays in re-determining eligibility and grant levels. Currently, such overpayments take ten percent of the monthly grant; under this proposal, the reduction would be five percent of the grant amount. Western Center supports waiving all such overpayment collections.

CalWORKs Housing Support Program

The budget proposes a massive $475 million increase in funding for the CalWORKs Housing Assistance Program (HSP) in each of the next two years. This funding will be on top of the existing $90 million in funding for the program and will include statutory changes that may allow counties to serve households before they receive a three-day notice of eviction.

Golden State Stimulus II

The proposed budget includes $8.1 billion for an additional Golden State Stimulus (GSS) payment, including $600 payments for families earning up to $75,000 who did not already receive a GSS payment. The budget includes an additional $500 payment to families with dependent children making up to $75,000 and an additional $500 to ITIN filers that earn up to $75,000 and have a dependent. This would bring the total investment in the GSS to $11.9 billion when combined with the earlier funding provided in February.

We support the Governor’s providing an additional state stimulus that includes ITIN holders, however, barriers remain for providing pandemic relief to undocumented Californians who lack an ITIN, Californians who do not file taxes because they do not make enough in earnings, and those most in need who are currently enrolled in public benefit programs, including General Assistance recipients.

Guaranteed Basic Income Pilot

The budget proposes to provide $35 million to cities and counties to establish guaranteed basic income pilot programs. Western Center supports this as a solid step toward providing people with low incomes more economic autonomy and dignity.

SSI/SSP

The budget proposes a 6.4 percent increase in the SSP portion of the grant for individual SSI recipients only. This would increase the overall grant amount by approximately $10 a month beginning January 1, 2022. This is the first SSP grant increase since at least 2008 (the 2017 increase was a one-time COLA) but falls far short of the level needed to restore the SSI/SSP grant to the federal poverty level. When combined with the anticipated federal cost of living adjustment, SSI grants for individuals would rise from $954 a month to $998 a month.

Housing Disability Advocacy Program

This program provides grants to counties to assist homeless individuals to apply for SSI and to provide housing while the application is pending. The budget proposes to increase funding by $175 million over each of the next two budgets for HDAP. The budget also proposes to eliminate the requirement that counties collect interim assistance payment reimbursements.

Immigration Programs

The budget proposes $20 million in one-time funding to provide additional support for Unaccompanied Undocumented Minors (UUMS) through the Opportunities for Youth pilot project and UUM legal services.

Deferred Action for Childhood Arrivals (DACA) and Naturalization Filing Fees: The budget provides $25 million for immigration services for work on behalf of clients involved in federal DACA status.

 

 

 

Statement on Governor Gavin Newsom’s May Revision of California’s 2021-2022 Budget

Over the past year, millions of Californians experienced the most devastating pandemic and economic downturn in nearly a century. The cumulative impact of COVID-19 has caused financial devastation and a prolonged period of wealth and asset stripping from Californians unlike anything in recent memory.

With that in mind, we see today’s budget proposal by the Governor as a mixed bag. While it includes notable investments in homelessness and housing funding and health care, it falls short in meeting the existing needs of Californians with low incomes. Doing so would include providing health care for ALL, restoring decade-old cuts to grants for SSI recipients, ensuring CalWORKs families have enough income to allow children to thrive, and helping those who are in debt and threatened with eviction due to the pandemic receive justice. The $76 billion budget surplus is more than adequate to meet those needs, and we call on the Legislature to revise the Governor’s budget proposal to ensure that families with low incomes receive a truly historic investment.

Western Center will release its full, detailed analysis of the Governor’s May Budget Revision on Monday, May 17, 2021.

PRESS RELEASE: Settlement Requires CA to Provide Access to Care for Medi-Cal Applicants During Lengthy Eligibility Verification Process

FOR IMMEDIATE RELEASE

LOS ANGELES, CA — Hundreds of thousands of Californians will have speedier access to health care thanks to a settlement in a seven-year lawsuit requiring California’s Department of Health Care Services to allow eligible Medi-Cal applicants to receive health coverage right away, subject to later verification of their declared income.

The lawsuit, filed in 2014, sought to end the state’s practice of leaving hundreds of thousands of eligible low-­‐income applicants to wait for months without the health care they desperately needed. One of the plaintiffs, Frances Rivera, lost her adult son to a treatable condition while he waited for the state to approve his Medi-Cal application. Shortly after he died—and more than six months after he first applied—Rivera received a letter stating her son qualified for Medi-­Cal, and that his coverage would apply retroactively.

When the lawsuit was first filed, there was a backlog of more than 350,000 Medi-Cal applicants who had been waiting significantly longer than was allowed under state and federal mandates. Cancer patients were unable to see oncologists.  People with heart conditions were unable to see cardiologists. Without access to arthritis medication, one woman had to go on disability because she could no longer walk. Women with high-risk pregnancies went without the critical care they needed to keep themselves and their babies safe.

“People’s lives are in the balance—our clients knew that firsthand,” said Richard Rothschild, Director of Litigation for Western Center on Law & Poverty.

The settlement, which was finalized on May 10th, ensures applicants who meet eligibility criteria have health coverage as soon as they apply, while verification and other processing are being completed.

“This victory is especially important now, with low-income essential workers and their families bearing the brunt of the pandemic’s health burdens,” said Lynn Kersey, Executive Director of Maternal and Child Health Access, whose organization was a plaintiff in the case.

Plaintiffs were represented by Bay Area Legal Aid, Central California Legal Services, Multiforum Advocacy Solutions, Neighborhood Legal Services of Los Angeles County, the National Health Law Program, and Western Center on Law & Poverty.

“Some 84% of Medi-Call applicants are in households with low-wage workers whose jobs don’t provide health insurance for them or their children,” said Lucy Quacinella of Multiforum Advocacy Solutions, lead counsel for the plaintiffs. “This settlement will prevent suffering and help address significant racial disparities in health.”

As the pandemic tore through Los Angeles’ low-income neighborhoods, a lack of access to healthcare led to extraordinarily high levels of serious illness and death—much higher than in wealthier areas.

“Medi-Cal is supposed to be the great healthcare equalizer,” said Neighborhood Legal Services’ Jackie Dai. “This settlement moves us a little closer to that promise.”

Contact: Courtney McKinney, cmckinney[at]wclp.org

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The mission of Bay Area Legal Aid is to provide meaningful access to the civil justice system through quality legal assistance regardless of a client’s location, language or disability.

Central California Legal Services (CCLS), established in 1966, provides free civil legal services to eligible low-income residents in Fresno, Tulare, Merced, Kings, Tuolumne, and Mariposa Counties. In partnership with the statewide Health Consumer Alliance, CCLS also serves Madera, San Luis Obispo, Stanislaus, Monterey and San Benito County residents with their healthcare access concerns.  CCLS seeks to advance justice through community education and legal service. We endeavor to empower low-income communities to fight social injustice and assert their rights as individuals, groups, and communities.   We commit to doing high-quality work promoting systemic change while serving individual clients with respect and compassion.

Lucy Quacinella is an attorney in private practice and the Principal of Multiforum Advocacy Solutions. In addition to impact litigation on health care issues, MAS provides research, analysis, and technical assistance to community-based organizations and assists with legislative and administrative advocacy. Through the Fulbright program, she has collaborated with local human rights advocates in Namibia, Rwanda, and Italy.

Neighborhood Legal Services of Los Angeles County (NLSLA) is a steadfast advocate for individuals, families, and communities throughout Los Angeles County.   Each year NLSLA provides free assistance to more than 100,000 people through innovative projects that address the most critical needs of people living in poverty. Through a combination of individual representation, high impact litigation and public policy advocacy, NLSLA combats the immediate and long-lasting effects of poverty and expands access to health, opportunity, and justice in Los Angeles’ diverse neighborhoods.

The National Health Law Program, founded in 1969, protects and advances health rights of low-income and underserved individuals and families. We advocate, educate, and litigate at the federal and state levels to advance health and civil rights in the U.S.

Western Center on Law & Poverty fights for justice and system-wide change to secure housing, health care, racial justice, and a strong safety net for Californians with low incomes. Western Center attains real-world, policy solutions for clients through litigation, legislative and policy advocacy, and technical assistance and legal support for the state’s legal aid programs. Western Center is California’s oldest and largest legal services support center.

Joint Statement: California’s Momnibus Bill Continues On After Attempt to Stop It

UPDATE as of Wednesday, 4/28/2021: The California Senate voted to remove SB 65 from the Senate Human Services Committee and send it back to the Senate Rules Committee. On April 28th, the Rules Committee decided to send it to Senate Appropriations; Appropriations has until May 21st to advance the bill to the Senate floor.

We thank Senate Leader Atkins for acting to keep the bill alive, and Senator Skinner for authoring the bill and staying the course to protect birthing people in California. We are deeply thankful to everyone supporting SB 65 – your calls, tweets, and emails make all the difference.

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SB 65, California’s Momnibus Bill to address maternal and infant mortality disparities, was held by the State Senate’s Human Services Chair. Before it was held by Senator Hurtado, SB 65 had no registered opposition, and had unanimous support in the Senate Health Committee, with several members asking to join as co-authors. Now the bill is at risk, as it only has until April 28th to be heard in committee before it can move through the legislative process.

As written, SB 65 would provide additional health care via extended Medi-Cal eligibility for postpartum people, doula care, investment in the midwife workforce, and cash assistance for people with very low incomes through pregnancy and in the first years of their babies’ lives, all throughout California. These comprehensive services are needed to reduce the disproportionate health disparities that Black and Indigenous birthing people and babies face in California. SB 65 also added important state oversight to the boards investigating maternal and infant death to gain better understanding and make recommendations on how to reduce such disparities.

News that the bill would be held came as supporters and witnesses waited to testify on its behalf before the committee. This happened at the same time that the guilty verdict for Derek Chauvin was read. People around the world took the verdict as a sign of hope, that this country’s system of laws and policy may in fact have the ability to uphold the sanctity of Black lives. But for those waiting in vain to testify for SB 65 in California, it did not feel like Black lives were being protected, as politics got in the way of protecting people who face obstacles to healthy birth outcomes in our state — disproportionately Black and Indigenous people.

For many of us working for a more just future for Black lives, it is important that the lives we say matter are meaningful to us more than in just death. Making sure that we are actively working to dismantle systemic barriers, including socio-economic and institutional racism, is an essential part of the work. There is no excuse for SB 65 to be held. The need is obvious, the support is resounding, and Black and Indigenous lives matter. The California Legislature needs to show that they are willing to take action to protect not just Black and Indigenous birthing people, but everyone who will benefit from the passage of this bill, which includes millions of people in California.

 

 

PRESS RELEASE: Settlement Reached with USDA to Provide Emergency Food Benefits to One Million California Households Most in Need

FOR IMMEDIATE RELEASE

Settlement comes ten months after lawsuit said denial of SNAP Emergency Allotments violated the Families First Coronavirus Response Act

SAN FRANCISCO, CA — Approximately one million California households will soon be permitted to receive emergency food benefits under new USDA guidance, thanks in part to the settlement of the lawsuit Hall v. U.S. Department of Agriculture, which was filed in the early months of the pandemic. Plaintiffs Robin Hall and Steven Summers are two Californians who were denied emergency food benefits authorized by Congress in March of 2020. In the lawsuit, Hall and Summers argued that USDA illegally denied them and other Californians emergency benefits from the Supplemental Nutrition Assistance Program (aka SNAP — CalFresh in California), solely because they already received the maximum regular benefit allotment, which was $194 per month at the time.

“Even before the pandemic, I worked hard to stretch my monthly SNAP benefits to meet my food needs. The pandemic made it much harder to get regular meals,” said Hall. “This emergency assistance will be a huge help to me and many others. I feel so honored to fight for everyone like me. It means so much to me.”

After the emergency benefits were signed into law in March 2020, USDA published guidance denying emergency benefits to households receiving the maximum regular benefit, which are those with the lowest incomes. Both Hall and Summers are single adults in groups at high risk for complications from COVID-19, who struggled to maintain healthy diets during the pandemic but were denied emergency food assistance. They are represented by the Impact Fund and Western Center on Law & Poverty.

Under the terms of yesterday’s settlement, USDA agreed to immediately stop enforcing its guidance on emergency allotments as to California. The same day, USDA issued new guidance announcing a policy change to provide emergency allotments to all households enrolled in SNAP with minimum payments of $95 per month for each household.

“This settlement represents exactly what we were hoping to achieve here in California,” said Lindsay Nako, Impact Fund’s Director of Litigation and Training, who represented Hall and Summers. “USDA’s willingness to settle this lawsuit, as well as the steps the Biden Administration has taken to make emergency food aid available to people with the lowest incomes, is cause for optimism about the future of SNAP – in California and beyond.”

Congress passed the Families First Coronavirus Response Act in March of 2020 in response to COVID-19; it was partially meant to address rising food insecurity and hunger by providing additional resources for SNAP recipients. Specifically, the Act authorized USDA to approve state requests for emergency allotments to households participating in SNAP. When California applied for the emergency aid, USDA initially denied the state’s request because it included benefits for those receiving the maximum regular benefit, which prompted the lawsuit. USDA did not approve California’s request until the state removed households receiving the maximum regular benefit.

Within days of President Biden’s inauguration, the White House issued an executive order and accompanying fact sheet that called on USDA to “[a]llow larger emergency [SNAP] allotments for the lowest-income households,” which would provide enhanced SNAP benefits to an additional 12 million people. The settlement and updated guidance mark a new path forward for USDA.

“We are pleased to see USDA turn the page toward making sure people who need help the most can get it,” said Alexander Prieto, a senior litigator for Western Center who represented the plaintiffs. “The past year has been incredibly hard for people with very low incomes. This settlement and USDA’s new guidance is a step in a different direction, and we hope for continued efforts to expand, rather than take away, vital safety net programs.”

People with very low incomes continue to face the greatest risk of hunger and food insecurity during the pandemic. They are less likely to have food reserves on hand and more likely to rely on food banks, free meal providers, and other emergency channels for food distribution, which are currently overextended and under-resourced. By acknowledging those realities and providing additional aid so individuals and families can take care of their food needs, USDA is embarking on a more humane path forward for people who rely on its assistance.

“The outcome of this lawsuit counters the mythology that SNAP covers an entire food budget,” said Summers. “Households have to supplement what they receive even in normal times — just because you get the full amount doesn’t mean you are on easy street. Hopefully this lawsuit will be a reminder of this: not enough is not enough, no matter how much you receive. I hope this is a springboard for recognizing the shortcomings in SNAP and making more changes to combat hunger.”

Contact: Courtney McKinney, cmckinney[at]wclp.org

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The Impact Fund provides strategic leadership and support for litigation to achieve economic and social justice. We provide funds for impact litigation in the areas of civil rights, environmental justice, and poverty law. We offer innovative technical support, training, and expertise on issues that arise in large scale impact litigation. We serve as lead counsel, co-counsel, and amicus counsel in select class action and impact litigation.

Western Center on Law & Poverty fights for justice and system-wide change to secure housing, health care, racial justice and a strong safety net for Californians with low income. Western Center attains real-world, policy solutions for clients through litigation, legislative and policy advocacy, and technical assistance and legal support for the state’s legal aid programs. Western Center is California’s oldest and largest legal services support center.

Western Center Analysis of Governor Gavin Newsom’s 2021-2022 California Budget Proposal

PDF available here

Governor Newsom has released his proposed 2021-22 state budget. Due to a strong, unanticipated influx of General Fund revenue, Newsom proposes to spend billions of dollars on a one-time basis to address the immediate needs of tenants, landlords, businesses, schools and others in the midst of the pandemic. The budget follows the outlines of the 2020-21 budget agreement, which largely avoided the draconian cuts to education, health and public benefit programs that characterized many past budgets during economic downturns. This proposed budget, while not austere, is conservative both in terms of its long term economic outlook and ambition to meet existing needs of millions of Californians.

Though the budget avoids deep cuts and proposes immediate action to bolster spending, the Governor assumes slower growth in revenue in future years, resulting in significant deficits beginning in 2022-23, which could result in lower spending in the future. In short, the 2022-23 state budget and beyond will either require deep cuts or substantial new revenues to maintain current spending levels.

BACKGROUND

The 2020-21 budget assumed that there would be a substantial loss of state General Funds due to the economic crisis brought on by the COVID-19 pandemic. The budget was passed using half of the Prop 2 Budget Stabilization reserves (aka Rainy Day Fund) and by assuming that the state would receive $14 billion from the federal government in the form of COVID relief by September 2020. Without that funding, the “trigger” mechanism would institute $14 billion in budget cuts.

Despite the fact that federal COVID relief did not arrive in September as projected, budget cuts have not been implemented. In late December, the federal government approved additional COVID relief, but much-needed funding for state and local governments was not included. The state did receive billions to address some COVID related costs, and to fund transportation, education and rental assistance. But in general, those funds cannot be used to fill holes in state budgets.

Fortunately, the deep recession did not result in the massive loss of state General Fund revenue that was predicted. Throughout the second half of 2020, state revenue coffers exceeded estimates by billions of dollars. This counterintuitive outcome reflects the growing impact of income inequality in California, where despite double digit unemployment, tax receipts continue to climb because the incomes of the wealthy are growing — most of the lost jobs were in low wage employment. Additionally, many of those who lost jobs received unemployment insurance that was supplemented by the federal CARES Act. Higher income workers largely did not suffer job losses, and many online enterprises saw substantial increases in profits leading to higher tax payments to the state.

Additionally, anticipated higher caseloads for health and human service programs did not materialize, resulting in lower state spending in the 2020-21 budget. By late November, the non-partisan Legislative Analyst Office projected a $26 billion surplus for the state. The Governor’s budget, however, is cautious, and pegs the surplus at $15 billion. But starting with the 2022-23 budget, the Governor projects that revenue will be more than $6 billion short of estimated expenses, and by the 2024-25 budget, the deficit could grow to $11 billion if no adjustments to spending or revenue are made.

COVID-19

The Governor is calling for “early action” by the Legislature on a package of assistance to respond to the COVID crisis. Among the items in the package are:

  • $600 checks to all households receiving the state earned income tax credit. This would provide cash to approximately 4 million Californians.
  • $575 million to small businesses and non-profits impacted by the COVID crisis.
  • $2 billion in Prop 98 funds to safely re-open public schools starting with classes for the youngest children.
  • $1.2 billion to help Californians with low incomes acquire green vehicles.

While this spending is welcome, it does not come close to meeting the needs of struggling Californians. Increased cash payments to the poorest Californians are needed now and should not be limited to those who have earnings from work. More state assistance is needed to ensure tenants are not saddled with debt that will decimate their credit and drive them further into poverty. The greatest public health crisis in memory is the time to provide health care for all.

FINANCIAL SECURITY

CalWORKs

The budget proposes a 1.5% increase in CalWORKs grants to begin October 1, 2021. The increase will bring the grant for a family of three to 49% of the federal poverty level or a maximum grant of $891 a month. This is similar to a proposed increase from last year’s budget that was dropped when the pandemic started. This funding is provided from the Child Poverty subaccount.

Overall spending on CalWORKs is declining to account for lower than anticipated caseload. The 2020-21 budget assumed the caseload would rise by more than 200,000 families. However, the increase was far more modest, resulting in an increase of about 50,000 cases. Thus, funding for the 2020-21 budget is proposed to be clawed back. Funding for 2021-22 is $600 million lower than the current year but a caseload increase to 480,000 families is funded in the budget.

  • Total TANF (Temporary Assistance for Needy Families) funding: $9.3 billion. This amount includes $7.4 billion for CalWORKs program expenditures and 1.9 billion in other programs.
  • Average monthly caseload for CalWORKs is to be 482,436 2021 – 22, this is a 19% increase from last year.
  • CalWORKs Time on Aid Exemption – $46.1 million one-time General Fund (TANF) block grant funding to temporarily suspend any month in which CalWORKs aid or services are received from counting towards the CalWORKs 48th month time based on a good cause exemption due to the COVID-19 pandemic.
  • CalWorks Grant Increase – 1.5% increase to CalWORKs maximum aid payment levels effective October 1, 2021. $50.1 million in 2021 – 22. The increased grants costs are funded entirely by the Child Poverty and Family Supplemental Support Subaccounts of the Local Revenue Fund.

SSI/SSP

There is no SSP grant adjustment in the Governor’s budget. The budget describes the passing through of federal COLAs that are required under current federal law, but that is not an increase. Indeed, state spending for SSI is proposed to decline again, by an estimated $20 million. Yet again, as in past years, these “savings” are not re-invested into the program to benefit recipients who still have not had grant cuts restored from the last recession. The ongoing failure to address these cuts is unreasonable and unjust.

  • $2.69 billion General Fund, a 0.6% decrease from last year’s budget.
    • Monthly average case load is expected to be 1.18 million recipients this fiscal year, a 1.1% decrease.

$2.4 Billion in Earned Income Tax Credit Assistance

The Governor is proposing a one-time $600 increase in state Earned Income Tax Credit (CalEITC) payments to families that receive CalEITC. With so many people in California struggling, and with many working families losing jobs or income from work, putting cash in people’s pockets is good for people experiencing poverty and good for the state economy. The Legislature may wish to consider increasing the size of the payments or providing more cash assistance to the lowest income families.

The Governor’s proposal will benefit more than four million California families, but it leaves out several million California households who do not have earnings from work. This includes CalWORKs families, virtually all SSI recipients, immigrants with neither SSNs or ITINs, people on General Assistance and many others who are unemployed. The Legislature should consider ways to provide assistance to all low income families and individuals.

Food Security

  • $30 million in one-time General Funding for emergency food assistance to food banks, tribes, and tribal organizations.
  • Supplemental Nutrition Benefit and Transitional Nutrition Benefit Programs Adjustment – $22.3 million ongoing General Fund.
  • California Food Assistance Program – $11.4 million in one-time General Funding for households to receive max allowable allotment based on household size.
  • $10 million one-time General Funding to the Office of Farm to Fork’s Farm to School Program. Brings healthy food to schools and supports agriculture education, including school gardening, farms and cooking.

Higher Education

  • $100 million in Prop 98 funds to address food and housing insecurity for community college students.
  • Increase of $15 million ongoing General Fund to the CSU Graduation Initiative 2025 that targets students experiencing food and housing insecurity.
  • $35 million ongoing from the General Fund for Cal Grants which will add 9,000 students to the Cal Grant awards, bringing the total to 50,000 awards.

Child Support

  • $24.9 million ($8.5 million General Fund) ongoing for local child support agencies to improve collections and services
  • $23.8 million ($8.1 million General Fund) for local child support courts and state operations for child support funding.

Miscellaneous

The proposal includes $35 million one-time General Fund to support micro-grants of up to $10,000 seed funding. These grants are for underserved groups, including undocumented immigrants, to start small businesses.

ACCESS TO JUSTICE/ FINES & FEES

Online Traffic Court Adjudication Pilot

The Governor is proposing again to expand the traffic court online adjudication pilot program statewide. This pilot allows people to pay traffic tickets online rather than make an appearance in court. People with low incomes are given a minimum reduction of 50% of the fines, fees and assessments due to the court. It also allows them to get on a payment plan not to exceed $25 a month.

The proposal allots $12.3 million General Fund, increasing the total to $58.4 million ongoing General Fund by 2024-25, to expand the program statewide, and to include non-traffic infractions.

The Legislature chose not to move forward with the proposal last year and instead used the funding provided for the pilot to reduce criminal fees. Advocates also expressed concern about the design of the pilot and were seeking changes that would expand discounts to people with low incomes.

HEALTH CARE

The Governor’s proposal takes a baseline approach to health care with no major expansions, including no proposal to expand Medi-Cal to undocumented elders or eliminate the harmful Medi-Cal assets test. The proposal resumes the California Advancing and Innovating Medi-Cal initiative (CalAIM), which was put on hold due to the pandemic; expands Continuous Glucose Monitoring systems; extends suspension of Medi-Cal benefits and supplemental provider rates for 12 months; proposes one-time funding for behavioral health services, particularly for school-aged children; and takes further steps to implement the Master Plan on Aging.

Medi-Cal

  • The Governor’s proposal assumes a 10.1% Medi-Cal case rate from 2019-20 to 2020-21 and 11.7% from 2020-21 to 2021-22, starting with nearly 14 million Californians and increasing to 15.6 million (peaking at 16.1 million in January 2022), representing nearly 40% of California’s population in 2021-22. The administration bases this estimate on continuous coverage requirements under federal law and a pandemic-induced recession, although enrollment numbers have not born out these projections.
  • The proposal includes $12 million ($4.2 million General Fund) to add Continuous Glucose Monitoring systems as a Medi-Cal benefit for beneficiaries ages 21 and older with diabetes, effective January 1, 2022.
  • The proposal implements the CalAIM initiative effective January 1, 2022, including $1.1 billion ($531.9 million General Fund) for FY 2021-22, growing to $1.5 billion ($755.5 million General Fund) in FY 2022-23. This investment follows the proposal that was put on hold last year.
  • The proposal includes $750 million General Fund, available over three years, for DHCS to invest in critical gaps across the community-based behavioral health continuum, including the addition of at least 5,000 beds, units, or rooms. Funding would be made available to counties, requiring local funding match, via a competitive application process.
  • The proposal includes $400 million ($200 million General Fund) one-time over multiple years to implement an incentive program through Medi-Cal managed care plans, in coordination with county behavioral health departments and schools, to build infrastructure, partnerships, and capacity statewide to increase the number of students receiving preventive and early intervention behavioral health services.
  • The Governor’s proposal extends the suspension of Medi-Cal benefits, eligibility, and provider rates by 12 months. Specifically:
    • Optional benefits restored in 2019 Budget, specifically audiology and speech therapy services, incontinence cream and washes, eyeglasses and contacts, and podiatric services, have been extended by 12 months to 12/31/2022 for a cost of $47 million ($15.6 million General Fund).
    • The proposal delays the suspension of Medi-Cal post-partum extended eligibility by 12 months to 12/31/2022 for a cost of $27.1 million General Fund.
    • Supplemental provider payments are also extended by 12 months to 6/30/2022 for a cost of $3.2 billion ($275.3 million General Fund, $717.8 million Prop 56 funds, and $2.2 billion in federal funds).
      • Payments to intermediate care facilities for the developmentally disabled, freestanding pediatric subacute facilities, and Community Based Adult Services proposed to be extended to 12/31/2022 to align with managed care calendar rate year. The 7% IHSS hour cuts has also been proposed to be suspended to 12/31/2022.
      • Supplemental payment for Women’s Health, Family Planning, the Loan Repayment program, behavioral health integration program, AIDS waiver, home health, and pediatric day health no longer subject to suspension.
    • The proposal reflects last year’s announcement to postpone the carve-out of prescription drugs through Medi-Cal Rx to April 2021. Under revised estimates, Medi-Cal Rx is projected to result in less net savings of $612 million ($238.1 million General Fund) in FY 2021-22.
    • The proposal makes permanent the restoration of adult over-the-counter cough/cold and acetaminophen drug benefits for savings of $21 million ($7.8 million General Fund) effective July 2021, although the waiver provided temporary reinstatement earlier as of March 2020.
    • The proposal includes $94.8 million ($34 million General Fund) to make permanent and extend telehealth flexibilities, including implementing remote patient monitoring services as an allowable telehealth modality in fee-for-service (FFS) and managed care delivery systems.
    • The proposal states the administration’s intention to focus on health disparities and cultural and language competency through health plan contractual language.

Other Health Proposals                                                                     

  • The proposal includes $11.2 million in 2020-21 and $24.5 million in 2022-23 to establish the Office of Health Care Affordability, which is charged with increasing cost and quality transparency, developing cost targets for the health care industry, enforcing compliance, and filing gaps in market oversight. The Office will be under the newly created Department of Health Care Affordability and Infrastructure, which will also house the current Office of Statewide Health Planning and Development.
  • The proposal provides $25 million in one-time Mental Health Services Act (MHSA) funds over five years, for the oversight and accountability commission to augment the mental health student services act partnership grant; $25M ongoing Prop 98 General Fund to fund partnerships and county behavioral health departments to support student mental health.
  • The proposal provides $750M in one-time General Funding for competitive grants to counties to acquire and rehabilitate real estate assets to expand the community continuum of behavioral health treatment resources.
  • The proposal establishes a new Office of Medicare Innovation and Integration that will explore strategies and models to strengthen and expand low and middle income Californians access to services and supports, while developing new partnerships with federal government.
  • The administration will appoint a senior advisor on Aging, Disability, and Alzheimer’s to advance cross-Cabinet initiatives and partnerships; $5 million General Fund to further implement Master Plan on Aging; $3 million one-time General Fund for OSHPD to grow and diversify geriatric medicine workforce.
  • In response to the pandemic, the proposal includes $300 million as an initial estimate for vaccine distribution, including a public awareness campaign.

HOUSING

The Governor’s budget proposal includes important investments to address California’s existing housing crisis at a time when the COVID-19 pandemic is making the crisis worse for low-wage workers and communities of color. The proposal builds on recent efforts to provide stability to at-risk households and invest in programs that will aid economic recovery, and increase the supply and production of very low, low, and moderate income housing. In total, the Governor proposes more than $8 billion in housing resources.

Preventing Evictions and Foreclosures

Last August, the Legislature enacted AB 3088 to create strong statewide eviction protections for tenants unable to pay rent due to hardship caused by COVID-19. The bill extended rental protections to January 31st, 2021 to forestall an incoming wave of evictions. The administration is seeking an immediate extension of AB 3088 beyond January 31, 2021 to allow the state to use federal resources to assist those with arrears, rent, and utilities so families and individuals with low incomes stay housed. The budget includes $11.7 million one-time General Funds for trial courts to process the anticipated increase in unlawful detainer and small claims filings resulting from AB 3088.

The Governor is relying on the federal COVID-19 relief bill that was enacted in late December, which will allocate $2.6 billion in rental relief funds to California. Rental assistance will be dispersed between the state and local governments with an estimated $1.4 billion going to the state and $1.2 billion to local jurisdictions with populations over 200,000. The federal program includes eligibility parameters related to eligible use of funds as well as income parameters, with the primary focus of the rental assistance to support individuals and households with less than 80% Area Median Income (AMI), with a priority for individuals and households with less than 50% AMI.

National Mortgage Settlement Program

In the 2020-2021 budget, the California Housing Finance Authority allocated $331 million in National Mortgage Settlement funds to prevent foreclosures and evictions. Last year, the Judicial Council provided $31 million of those funds to local legal service organizations, with the California Housing Finance Authority (CalHFA) recently providing the remaining amount to 90 certified housing counselors throughout California. CalHFA plans to continue to provide mortgage assistance in 2021-22.

Anti-Discrimination

The Budget proposes $2 million General Fund dollars for the Department of Fair Employment and Housing to prosecute violations of anti-housing discrimination laws and to conduct surveys and education and outreach campaigns.

Low-Income Housing Tax Credits

The budget proposes a third round of $500 million in tax credits to reduce funding gaps in affordable housing units. These tax credits will be administered by the California Debt Limit Allocation Committee, the Tax Credit Allocation Committee, and the California Business Consumer Services and Housing Agency.

Excess State Land Development

The Governor is proposing statutory changes to allow market-rate and commercial development on excess state land.

Construction Apprenticeships

In an effort to align housing development with workforce development, the budget proposes $8.5 million General Fund to expend access to state-approved construction apprenticeships and pre-apprenticeships that will result in approximately 650 jobs.

Infill Infrastructure Grant Program

$500 million in General Fund dollars is included to create jobs and increase long-term housing development to further a more equitable housing supply in a post-COVID-19 housing market. This includes $250 million in the current fiscal year and $250 million in fiscal year 2021-22.

Expanded Facilities to Support Housing

To further the goal of ending homelessness in California, the Governor’s budget includes $250 million for the acquisition and/or rehabilitation of Adult Residential Facilities (ARF) and Residential Care Facilities for the Elderly (RCFE). These funds will support physical upgrades and capital improvements.

Project Homekey

To accelerate the work on providing permanent housing for people experiencing homelessness and stop the spread of COVID-19 among this vulnerable population, the Governor is allocating $750 million to extend the program. $250 million is allotted for the current year (2020-21), and $500 million for fiscal year 2021-22. This will be administered by the Department of Housing and Community Development.