“0:42 – We continue on the California budget, this time exploring what’s not included in the budget, with Michael Herald, director of policy advocacy at the Western Center on Law and Poverty.”
The Newsom Administration released its 2022-23 May Revise budget, which includes a massive three year budget surplus of over $90 billion. While the budget includes many noteworthy proposals, overall it fails to provide robust help to those who need it most. Rather than target the surplus on increased tax credits and emergency relief for people with low incomes, the budget proposal provides more than $11 billion in tax credits to car owners, including households with incomes up to $250,000.
Paradoxically, the state has so much extra revenue that General Fund spending is limited since the increased revenue exceeds the State Appropriations Limit (aka the Gann limit). As such, the May Revise proposes large infrastructure spending that is not counted towards the Gann limit. While those proposals are not without merit, the Revise fails on fundamental anti-poverty measures, like backfilling the lost federal child tax credits proven to reduce child poverty, leaving hundreds of thousands of children at risk of unnecessarily falling back into poverty. The Revise also fails to fully eliminate civil assessment fees that disproportionately punish people experiencing poverty who cannot afford to pay a traffic ticket or take time to appear in court.
The governor proposes $65 million to fund a new court process called Care Court, which would force unhoused individuals with schizophrenia and other psychotic disorders into a court ordered treatment plan. Western Center has been tracking the proposal and vocal about our opposition since the governor revealed it in March, as it touches on each of our issue areas.
The Revise provides $39 million to the Judicial Council to run the court process, $10 million to finance a supporter program within the state Department of Aging, and $15 million to counties for training and technical assistance.
With its lack of necessary interventions, like a clear budget strategy and mechanisms for creating housing, we believe the framework of the proposal is fundamentally flawed. If implemented, it is likely CARE Court will lead to unnecessary institutionalization of people with disabilities and unhoused people and likely create a chilling effect that will prevent people from seeking services for fear of being institutionalized. Additionally, by involving the court system the proposal will perpetuate institutionalized racism and exacerbate existing disparities in health care delivery since Black, Indigenous and other people of color are significantly more likely to be diagnosed with psychotic disorders than white people. All evidence shows that adequately-resourced, intensive, voluntary outpatient treatment – not court-ordered treatment – is most effective for treating the population CARE Court seeks to serve.
HOUSING & HOMELESSNESS
The governor’s May Revise proposes a $2.5 billion dollar increase for housing and homelessness programs from last year for multi-year investments to build housing and behavioral health housing. The Revise includes an additional $150 million to fund Homekey projects, $50 million to build interim housing and $500 million to accelerate affordable housing production and conversions of retail space in downtown corridors.
Even with the economic fallout of the pandemic raging on, the proposal does not include additional funding for tenants at the brink of eviction for their inability to pay rent. To confuse matters, the governor announced a $2.7 billion budget allocation for rental assistance, but it is not a new commitment. Rather, it’s part of the commitment the legislature made in February via Senate Bill 115, designed to ensure full coverage for rental assistance applications submitted before March 31. However, because of the burdensome application process, tenants accrue debt while they wait for approval and still face the threat of eviction for the months their application was being processed.
The governor’s proposal fails to comply with the legal requirement for the state to fully fund rental assistance applications submitted before March 31 by paying those tenants 100% of their accrued debt at the time they are approved. To keep tenants housed and fulfill the promise of the rental assistance program, the massive budget surplus must be used to fully fund tenants’ rental debt and ensure that vulnerable Californians remain housed.
Western Center will continue to advocate for other sponsored proposals missing in the May Revise, including $500 million in the Community Anti-Displacement and Preservation Program (CAPP) to acquire unsubsidized affordable housing and make them permanently affordable, $200 million in the Reentry Housing and Workforce Development Program to provide stable housing and supportive services to formerly incarcerated people as outlined in AB 1816 (Bryan), and $150 million for eviction defense funding and community education and outreach.
PUBLIC BENEFITS & ACCESS TO JUSTICE
The May Revise proposes an 11.1 percent increase in CalWORKs, the largest one-year increase in the grant levels in recent memory. The funding for this comes from the Child Poverty subaccount which has seen a significant increase along with the overall budget. Even with this increase, CalWORKs grants for most families are still not out above deep poverty (50 percent of the federal poverty level). That is because most families have an excluded adult. We are calling on the legislature to fulfill the commitment made four years ago to fund CalWORKs grants at the assistance unit plus one level. See the chart below for what the gap will remain at:
Child Support Pass Through
The May Revise makes no change in the administration’s proposal to pass through all child support to former CalWORKs families. While advocates support the proposal, we seek to have it extended to current CalWORKs cases where families have lower incomes and could use the child support assistance immediately.
The May Revise makes no change to the governor’s January proposal seeking to expand the California Food Assistance Program to Californians regardless of immigration status for those 55 years of age and older. Western Center stands with our partners advocating for the expansion of the program to include Californians of all ages. Many immigrant families were excluded from pandemic relief and continue to be left behind as we rebuild the state’s safety nets.
The governor’s May Revise budget makes no proposal to increase grants for blind, aged and disabled Californians. There is a provisional agreement to restore the remainder of the 2009 SSP grant cuts beginning in January 2024 but the governor did not include CA4SSI’s request to accelerate the grant increase to January 2023. By delaying the second restoration, the value of the grant will decline when compared to the federal poverty level.
The governor’s May Revision maintains the expansions proposed in the January proposal, including expanding Medi-Cal to all adults regardless of immigration status (Health4All), zeroing out premiums and copayments for Medi-Cal, and expanding Medi-Cal coverage of custom crowns for back teeth. In addition, the May Revision makes new investments to increase the Medi-Cal doula reimbursement rate, provides navigator funding, and permanently extends presumptive eligibility for older adults and individuals with disabilities. Unfortunately, the May Revision does not update the Medi-Cal share of cost, fully fund SB 65, or implement Health4All sooner than January 2024.
Below is summary of health proposals in the May Revision, which still needs to be negotiated with the legislature by the budget deadline of June 15th.
- Increased Doula Reimbursement Rate: The May Revision proposes to increase the average doula service reimbursement rate from $450 to $1,094, which includes antepartum visits, delivery, and postpartum visits. The implementation date for the doula benefit will be shifted from July 2022 to January 2023 resulting in $974,000 total funds ($377,000 General Fund) in 2022-23 for this benefit.
- $60M One-time Navigator Funding: The May Revision proposes to add $60 million total funds ($30 million General Fund) to the Health Enrollment Navigators available over four years through fiscal year 2025-26 to assist in outreach, application assistance, enrollment, and retention for difficult-to-reach populations, including the implementation of Health4All.
- Presumptive Eligibility for Individuals 65 +, Blind, or Disabled: The May Revision includes $73 million total funds ($37 million General Fund) to continue Medi-Cal presumptive eligibility for older adults and individuals who are blind or disabled. Already permanent for other populations, this gives eligible older adults and individuals who are blind or disabled instant Medi-Cal eligibility for a limited time. Advocates are working to ensure this means two Presumptive Eligibility periods per year, as is currently available during COVID.
- Equity and Practice Transformation Payments: To close health equity gaps in preventative, maternity, and behavioral health care measures, and to address gaps in care, the May Revision proposes an additional $300 million ($150 million General Fund) to the $400 million proposed in January for a combined $700 million in total funds.
- Transitions to Managed Care: Under CalAIM, various populations are shifting to mandatory managed care effective January 2022 and January 2023. The May Revision proposes to delay the transition of ICF/DDs and Subacute Care Facilities into managed care from January 1, 2023 to July 1, 2023 to prepare for the transition. The administration also identified additional individuals subject to mandatory managed care that were assumed to already be included and will provide details on specific populations once determined.
- LA Care Sanctions: The May Revision proposes budget bill language to use monetary sanctions collected from LA Care in the budget year to award grants to qualifying non-profit legal aid programs and organizations that serve Medi-Cal managed care enrollees in Los Angeles County or other impacted counties, for purposes of improving access to care in the Medi-Cal program.
- Medi-Cal Media and Outreach Campaign: In an April budget change proposal prior to the May Revision, the Department of Health Care Services (DHCS) requested $25 million ($12.5 million General Fund) for a media and outreach campaign to encourage members to update their contact information with their counties, and to educate members of potential Medi-Cal termination if requested information is not submitted.
- Additional AB 97 Provider Payment Reductions Elimination: In addition to elimination of AB 97 payment reductions in the January proposal, the May Revision proposes to include doula services, community health worker services, asthma prevention services, health care services delivered via remote patient monitoring, dyadic services, Medication Therapy Management, and continuous glucose monitoring system, supplies and accessories.
Other Health Proposals
- Covered California: The May Revision proposes $304 million to extend California’s premium subsidy program for middle income Californians with incomes between 400 and 600% FPL. This represents a fraction of potential loss if federal relief is not extended.
- Children and Youth Behavioral Health Initiative Grants: The May Revision includes $85 million General Fund for Children and Youth Behavioral Health Initiative (CYBHI) grants to schools, cities, counties, tribes, and/or community-based organizations. This includes grants to wellness and mindfulness programs as well as parent support and training programs.
- Reproductive Health: The May Revision includes $57 million one-time General Fund to support safe and accessible reproductive health care, for a total of $125 million including investments in the January budget. Specifically, $40 million to DHCS for uncompensated reproductive health care, $15 million for the California Reproductive Justice and Freedom Fund at the Department of Public Health (DPH); $1 million to DPH for the Comprehensive Reproductive Rights Website, and $1 million to DPH for research on unmet needs for reproductive health care.
For questions contact:
- Housing & Homelessness:
- Health Care:
- Linda Nguy, Policy Advocate – [email protected]
- Public Benefits/ Access to Justice:
“Madeline Howard, a senior attorney at the Western Center on Law and Poverty, said the dollar amount may be new, but Newsom’s overall plan isn’t — because state lawmakers already committed to paying those applicants. “It really doesn’t change the picture at all,” she said. “People are still going to be waiting many months for their application to be processed. And the state is not indicating that they’re going to change their policy of refusing to pay people any rent that accrued past March.”
Governor Newsom released his January proposal for the 2022-23 California state budget. In total, the administration projects a $45 billion surplus — a combination of higher revenue collections for the past two budgets and higher than anticipated revenue for the 2022-23 budget. As the governor noted in his press conference, if current economic trends continue, the surplus could grow even more by the time the proposed budget is revised in May. The budget includes a record $36 billion reserve.
The governor’s proposed budget includes a historic investment in health care by expanding Medi-Cal eligibility for those currently excluded from the program due to immigration status, and by eliminating Medi-Cal premiums for children, pregnant people, and people with disabilities. It does not eliminate the burdensome “share of cost” that many people on Medi-Cal still pay as a monthly deductible.
The budget also includes expanded funding to house people experiencing homelessness, a large investment in health care related workforce development, and an expansion of proposals intended to reduce poverty such as increasing CalWORKs grants, passing on all child support to families formerly on public assistance, and expanding the state child tax credit to households with no reported income. The budget also proposes to fund 36,000 new childcare slots for working families, but this means approximately 150,000 families will remain on the waiting list.
Unfortunately, this proposal misses an opportunity to build on significant progress made through existing poverty-reduction initiatives. Despite the expiration of the very effective federal child tax credit increase, the governor’s proposed budget does not backfill that lost income for California families. It also fails to fund more stimulus payments for Californians with low incomes. Additionally, it does not provide a cost-of-living increase for the SSI/SSP grant as required by state law, and it does not accelerate the SSI/SSP grant restoration scheduled for January 2024.
The need for rental and utility assistance in California has greatly outpaced federal funds allocated to the state. While California was recently allocated an additional $62 million in federal funds to address the growing need, the state needs about $2 billion. The governor missed an opportunity to supplement the federal dollars with surplus from the General Fund. However, California will continue to advocate for additional funding from the federal government.
Despite the large surplus and number of proposed initiatives, the governor’s proposal uses just $20 billion for the needs of Californians. More than half of the surplus is being used to fund reserves and to pay off long term debt. Of the $20 billion being spent, the governor proposes to use 86 percent for one-time expenditures. The reluctance to invest in ongoing needs means proposals that could make a major impact, like funding a broadly available rental assistance program, are not part of the discussion. The legislature should review the governor’s budget with an eye toward meeting more of the short- and long-term needs of all Californians.
The governor’s proposal expands Medi-Cal to all adults regardless of immigration status. This would make California the first state in the nation to cover all adults, and together with the recent increase in the income level for seniors and people with disabilities, as well as the scheduled elimination of the Medi-Cal assets test by January 1, 2024, all adults under 138 percent of the poverty level will be eligible for free, full-scope Medi-Cal. The governor’s proposal also eliminates premiums for children, pregnant people, and the Working Disabled Program, and expands Medi-Cal coverage of custom crowns for back teeth. In addition, there are affordability, provider payment, and workforce investments.
- Health4All: The governor’s proposal expands full-scope Medi-Cal coverage to an estimated 700,000+ undocumented adults ages 26 through 49, effective no sooner than January 1, 2024, with estimated costs of $819 million total funds ($614 million General Fund) in FY 2023-24 and $2.3 billion total funds ($1.8 billion General Fund) at full implementation.
- Zero out premiums: The proposed budget includes $53 million total funds ($19 million General Fund) in FY 2022-23 and $89 million total funds ($31 million General Fund) ongoing and trailer bill language to reduce premiums to zero for Medi-Cal and other Children’s Health Insurance Program (CHIP) programs. This includes Medi-Cal premiums for children above 160 percent of the poverty level, the 250 percent Working Disabled Program premiums, as well as the premiums for pregnant women and infants under the Medi-Cal Access Program (MCAP) and County Children’s Health Insurance Programs (C-CHIP).
- Justice-related initiatives: The proposal includes $50 million total funds ($16 million General Fund) in FY 2022-23 to implement the CalAIM justice-related initiatives with implementation beginning January 2023. This includes pre-release applications, pre-release “in-reach” services, and coordinated re-entry. There will also be trailer bill language to extend the duration of suspension of Medi-Cal benefits when an individual is incarcerated to increase the likelihood that coverage is maintained.
- Dental Lab Processed Crown (AKA Custom Crown) Coverage: The budget includes $37 million total funds ($13 million General Fund) in FY 2022-23 and trailer bill language to update adult coverage requirements to include lab processed crowns for posterior teeth, in place of stainless-steel crowns. Also related to dental, the administration proposes to extend dental managed care contracts and procure new contracts no sooner than January 1, 2024.
- The governor’s proposal includes the following provider payment investments:
- Proposition 56 Supplemental Provider Payment Backfill: To address declining tobacco revenue, the proposal includes an increase of $29 million from the General Fund to fully fund remaining Proposition 56 payments at their current level in FY 2022-23.
- Equity and Practice Transformation Payments: To close health equity gaps in preventive, maternity, and behavioral health care measures and address gaps in care arising out of the pandemic, the proposal includes $400 million total funds ($200 million General Fund) in one-time funds, aligning with the goals of the Medi-Cal Comprehensive Quality and Equity Strategy.
- Elimination of Certain AB 97 Provider Payment Reductions: The budget includes $20 million total funds ($9 million General Fund) in FY 2022-23 and $24 million total funds ($11 million General Fund) ongoing to eliminate AB 97 payment reductions for nurses, alternative birthing centers, audiologists/hearing aid dispensers, respiratory care providers, durable medical equipment, oxygen and respiratory services, chronic dialysis clinics, non-emergency medical transportation, and emergency air medical transportation.
- Discontinue Child Health and Disability Program (CHDP) and Expand Children’s Presumptive Eligibility (PE): The Department is proposing to sunset CHDP by July 1, 2023 via trailer bill language and replace with the Children’s Presumptive Eligibility Program, which will include all Medi-Cal providers.
- Mobile Crisis Services: The proposal includes $108 million total funds ($16 million General Fund) and trailer bill language to add qualifying 24/7 community-based mobile crisis intervention services as a Medi-Cal benefit as soon as January 1, 2023. The benefit will be implemented through county behavioral health delivery systems by multidisciplinary mobile crisis teams in the community.
Other Health Proposals
- Office of Health Care Affordability: The proposal reappropriates funding for the Office that was originally included in the 2021 Budget Act (originally $11.2 million in 2020-21 and $24.5 million in 2022-23) and proposes statutory changes for its establishment. The Office is charged with increasing cost and quality transparency, developing cost targets for the health care industry, enforcing compliance, and filing gaps in market oversight.
- Covered California: The proposal continues to deposit into a reserve fund to be used for future Covered California affordability programs the $333.4 million General Fund that would have been used for Covered California state premium subsidies (not currently needed due to American Rescue Plan Funds). The administration intends to work with the Legislature to determine the best use of these funds based on the recent AB 133 affordability report produced by Covered California, after determining what ongoing federal support will be available. In addition, the proposal continues to include $20 million General Fund in 2022-23 to support the One-Dollar Premium Subsidy program, which zeros the cost of Covered California consumers for health plans due to federal policy concerning abortion coverage.
- Behavioral Health Bridge Housing: The proposed budget includes $1.5 billion General Fund ($1 billion in FY 2022-23 and $500 million in FY 2023-24) for behavioral health bridge housing to address the immediate housing and treatment needs of people experiencing unsheltered homelessness with serious behavioral health conditions by purchasing and installing tiny homes and providing time-limited operational supports in various bridge housing settings.
- Workforce Development: The proposal includes $1.7 billion in Care Economy Workforce investments, including $350 million General Fund to recruit and train 25,000 new community health workers as well as additional health care providers.
HOUSING & HOMELESSNESS
In total, the governor’s 2022-2023 budget dedicates $9 billion for housing and $8 billion for homelessness. Largely building on last year’s efforts, this budget proposal attempts to chip away at the housing and homelessness crisis by streamlining production, increasing housing accountability, and funding homelessness solutions through a climate focused lens.
This “Housing as a Climate Strategy’’ focuses on preservation and production of affordable housing near schools, jobs, transit, density, and community hubs to fight climate change. Despite the well-placed investments in climate resilient housing, the budget falls short in supporting struggling Californians from eviction with the notable lack of state funding for eviction protection. The budget also proposes to battle the state homelessness crisis with an eye toward housing and behavioral health. While on the surface this plan addresses the long-standing need for better mental health for the unhoused community, it plays on the trope that all people experiencing homelessness have mental health conditions, rather than recognizing the very tangible fact that most Californians simply cannot afford the high cost of living, which has steepened since the start of the pandemic.
The governor is also increasing funding for “beautification” and “hazardous material removal” in encampments, which translates to increased sweeps, harassment, and further ostracization of people experiencing homelessness. With another budget surplus, we hope the budget’s May revision will use the additional funding to preserve and increase affordable housing, prevent needless evictions with increased funding for California’s Emergency Rental Assistance Program, and provide tangle solutions to get people off the streets and into safe, stable, affordable, and permanent housing.
Affordable Housing and Climate
- $300 million one-time General Fund for the Affordable Housing and Sustainable Communities program to support land-use, housing, transportation, and land preservation projects for infill and compact development that reduce greenhouse gas emissions.
- $100 million one-time General Fund to expand affordable housing development and adaptive reuse opportunities on state excess land sites.
- $100 million one-time General Fund for adaptive reuse incentive grants to remove cost impediments to adaptive reuse (e.g., structural improvements, plumbing/electrical design, exiting) and help accelerate residential conversions, with a priority on projects located in downtown-oriented areas.
- $500 million in Low-Income Housing Tax Credits.
- $4.6 million in farmworker Housing Assistance Tax Credits.
- $200 million one-time General Fund for the California Housing Finance Agency (CalHFA) to provide loans to developers for mixed-income rental housing, specifically for households with incomes between 30 percent and 120 percent of the Area Median Income.
- $200 million one-time General Fund for the Portfolio Reinvestment Program to further preserve targeted units in downtown-oriented areas and continue increasing the state’s affordable housing stock.
Mobile Home Rehab
- $100 million one-time General Fund for HCD’s Mobile Home Park Rehabilitation and Resident Ownership Program. These funds will finance the preservation and development of affordable mobile home parks.
- Infill Infrastructure Grant Program—$500 million one-time General Fund ($225 million in 2022-23, and $275 million in 2023-24).
Emergency Rental Assistance Program
- California requested an additional $1.9 billion in federal funding to address the growing need for rental assistance and utility assistance for Californians. California was allocated an additional $62 million from the U.S. Department of Treasury. While grateful that California was allocated 30 percent of the total federal reallocation, this amount is woefully short of the need. Currently, California needs almost $2 billion more than what we were originally allocated, and the need is growing. California will continue to advocate with the federal government to obtain additional rental and utility assistance.
Formerly Incarcerated Housing
- $10.6 million one-time General Fund over three years to the Returning Home Well program that will provide transitional housing to parolees at risk of housing insecurity or homelessness.
Legal Services for Renters
- $40 million investment in legal assistance for renters and homeowners.
- $2 billion one-time General Fund, multi-year grant to cities, large counties and Continuums of Care working with the California Interagency Council on Homelessness (Cal-ICH). Cal-ICH will work with grantees on their homelessness accountability plans.
- $500 million one-time general fund dollars in housing encampment resolution efforts that will expand program jurisdictions investment in short- and long-term rehousing strategies for people experiencing homelessness.
- $25 million in Clean California and $20.6 million for hazardous material removal at encampments.
- $1 million investment in homeless youth programs.
- $1.5 billion in General Funds over two years dedicated to resources to address the immediate housing and treatment needs of people experiencing homelessness who have behavioral health conditions. This funding will be administered through DHCS’ Behavioral Health Continuum Infrastructure program to purchase tiny homes and facilitate bridge/transitional housing. Such funding can also be used for bridge housing including an expansion of Project Homekey Acquisition.
- $5 million for Housing Opportunities for Persons with AIDS (HOPWA).
PUBLIC BENEFITS & ACCESS TO JUSTICE
The governor is proposing a 7.1 percent grant increase to CalWORKs grants starting October 1, 2022. The funding for the increase comes from Child Poverty Subaccount, a stream of revenue dedicated to CalWORKs grant increases. As a result of the 7.1 percent increase, maximum CalWORKs grants will equal 54 percent of the federal poverty level. For families not subject to sanctions, timed off aid or with an ineligible adult, the grant levels exceed the deep poverty level, which means a reduction in the well-documented, long-term negative impacts of deep poverty on children. Despite the increase in the grant level, the administration’s budget does not fulfill the commitment to increase CalWORKs grants so that no child is living in deep poverty. The so-called AU+1 approach requires significantly more investment than this budget provides. Below is a chart which shows current grant amounts, grant amounts with the 7.1 percent increase, the percent of the federal poverty level, what the grant would need to be to ensure an end to deep poverty, and lastly, the gap between the current grant and an end to deep poverty.
The administration is proposing two major investments in workforce development. One is a $1.5 billion Proposition 98 General Fund effort to support the development of college and career pathways focused on education, health care, technology, and climate-related fields. Promoting pathways that allow students to move seamlessly from high school to college and career will improve the number of students who pursue and achieve post-secondary education and training.
The governor is also proposing to invest $1.7 billion over three years in care economy workforce development—across both the Labor Agency and California Health and Human Services Agency—that will create more innovative and accessible opportunities to recruit, train, and hire, and will advance an ethnically and culturally inclusive health and human services workforce, with improved diversity and higher wages. These programs will target students such as those in CalWORKs welfare to work.
Safety Net Reserve
The budget provides no increase in the safety net reserve, maintaining a $900 million level. While this amount represents an important safeguard against Medi-Cal and CalWORKs program reductions in lean budget years, the continuing growth in spending in both programs might require additional funds to preserve the effectiveness of the reserve.
Child Support Pass Through
The governor is proposing a major change to child support rules by allowing all child support paid by non-custodial parents to go to families formerly receiving CalWORKs or Medi-Cal. For decades it has been state policy for the state to retain any child support for the state to pay off the cost of providing welfare and medical benefits. In short, the state has reimbursed itself and made the families live with less income. When fully implemented, these families are estimated to receive an additional $187 million. While the idea of passing through all child support is certainly welcome, it is notable that the administration is proposing to do this only for families no longer receiving government assistance. The governor chose not to allow a 100 percent pass through to families currently on aid. The legislature may wish to consider expanding this proposal to pass through all child support to all families.
The administration did not propose an increase in the SSI/SSP grants for 2022-23 budget, citing last year’s agreement to a two-step increase in SSP funding to restore grant cuts made by the state in the 2010 and 2011 budgets. The first of these grant increases went into effect on January 1, 2022, and in conjunction with a federal cost of living increase for the SSI portion of the grant, SSI/SSP grant levels went from $954 a month up to $1,040 a month for a single individual. The second step of grant increases is set to go into effect in January 2024.
In 2018, the legislature and then Governor Brown agreed to provide a state cost of living adjustment on the SSP portion of the grant beginning in January 2023. While that agreement is subject to funding in the budget, the administration chose not to include it in the January budget. As it currently stands, SSI recipients would not see any increased state funding for two years. The legislature may wish to consider whether to accelerate the second SSP increase to 2023 or to provide a cost-of-living adjustment.
The administration proposes to increase funding for Home Visiting by $50 million ongoing for the Department of Public Health (CDPH) to expand the California Home Visiting Program and the California Black Infant Health Program, serving approximately 6,000 additional families over five years on top of 3,700 currently served by the Home Visiting Program and 1,650 served by the Black Infant Health Program. The administration does not propose increased funding for the CalWORKs Home Visiting program, which was cut in 2020 during the early days of the pandemic. The budget proposes greater flexibility for home visiting models offered to meet the diverse needs of families across the state, expands home visiting services to additional counties, and makes them accessible to families with the highest need. Additionally, this proposal will support early literacy by including books and early literacy programming provided by home visitors, and will be further supported by a $350 million General Fund investment to recruit, train, and certify new community health workers.
Earned Income Tax Credit
The administration is proposing to allow families with zero reported income to be eligible for the $1,000 state child tax credit so long as the family would otherwise be eligible. The concept of a zero-earnings tax credit potentially opens the door for allowing people receiving SSI, SSDI, and Social Security to get the same state assistance that families receive from the state EITC and Child Tax Credit.
The administration is proposing to reduce the impact of fines and fees on low-income Californians by reducing civil assessments from a maximum of $300 to a cap of $150. Civil assessments are imposed on people in criminal and traffic courts when they fail to appear for a hearing, or they fail to pay a fine in a timely fashion. Legal service advocates tell us that many clients receive multiple civil assessments that increase the amount they owe and make it even harder to pay court ordered fines and fees. While this proposal goes part way in meeting the goals of legislators and advocates, as proposed, civil assessments would still impact Californians with the lowest incomes most, and leaves open the question of whether retroactive civil assessment debts would continue to be subject to collection.
California Food Assistance Program
The administration proposes phasing in the expansion the California Food Assistance Program to all Californians ages 55 and older, regardless of immigration status. This year’s budget proposal includes $35.2 million for initial planning phases of the expansion and allocates $113.4 million annually starting in the 2025-26 budget year for the full expansion.
Golden State Stimulus/Grants
The administration chose not to provide another round of pandemic stimulus payments. These payments, which went out to low- and moderate-income households, were instrumental in allowing families and individuals to absorb some of the costs of the pandemic and to give breathing room in household budgets. The grants were also a method for the state to reduce state expenditures below the Gann Limit, which caps the amount the state budget can increase from year to year. The governor noted in his press conference that the door is not closed on this and it may be under consideration for the May Revise.
For questions, contact:
- Public Benefits/ Access to Justice: Michael Herald, Director of Policy Advocacy – mherald[at]wclp.org
- Food Access: Christopher Sanchez, Policy Advocate – csanchez[at]wclp.org
- Health Care: Jen Flory, Policy Advocate – jflory[at]wclp.org; Linda Nguy, Policy Advocate – lnguy[at]wclp.org
- Housing: Cynthia Castillo, Policy Advocate – ccastillo[at]wclp.org; Tina Rosales, Policy Advocate – trosales[at]wclp.org
Western Center Awarded $15,000!
Thank you for voting in the My LA2050 Grants Challenge! Because of your votes, we will receive $15,000 to support our advocacy. Thank you!
California Budget Update
The dust is mostly settled for the 2021-22 California budget; we break things down by Western Center priority area in this Budget Overview. There is a lot of good news in this budget, including the biggest investment in health care in California since the implementation of the ACA, as it becomes the first state to remove exclusions to Medi-Cal for adults 50+, young adults, and children, regardless of immigration status. The budget will also eliminate the draconian Medi-Cal assets test by 2024, and includes many priorities from SB 65, California’s Momnibus bill that we are co-sponsoring this year to close the state’s racial gaps in birth outcomes. While the budget includes many components of SB 65, we will continue to push the bill to further address the state’s disparate birthing outcomes.
After two decades of advocacy, this year’s California state budget also includes reparations for victims of forced sterilization in women’s prisons, making California the first state in the country to compensate survivors of state sterilization. Reparations are an important step in confronting California’s legacy of reproductive violence against Black, Indigenous, Latinx, and other people of color, people with disabilities, and people living in poverty, as well as for other reparations movements. PBS’ Belly of the Beast follows the historic movement for reparations for survivors of forced sterilization in California.
Emergency Broadband, Tenant Fact Sheet, Black Women’s Equal Pay Day
Thanks to the advocacy of the National Urban League and other community partners, funds are now available to make the internet more accessible for households with low incomes. Each month, $50 will go directly to broadband providers on behalf of eligible customers. $100 is also available for purchase of new equipment, like a computer or tablet. Learn more here.
Alongside our coalition to keep Californians safely housed amidst the pandemic, we published an update to our California Tenant Relief Fact Sheet. Last month, California extended statewide renter protections and updated how California renters and landlords receive financial help; the fact sheet explains what it all means. The fact sheet is also available in Spanish, Chinese, Russian, and Vietnamese.
August 3rd is Black Women’s Equal Pay Day, which, according to the Equal Pay Today campaign, is “the approximate day a Black woman must work into the new year to make what a white non-Hispanic man made at the end of the previous year.” Black women earn only 63% of what white men earn, so there is A LOT to do to reach pay equity. The Equal Pay Day movement also includes different days of acknowledgement for each BIPOC group — some earlier in the year, and some still to come. We must all keep working to uplift women of color, especially Black women, because as Malcolm X said, the lowest baseline this country has is for its treatment of Black women. If we can fix that, we can fix this country.
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.
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.
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.
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.
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.
Over the next two weeks, the Governor and Legislature will determine how to spend the state’s $38 billion dollar surplus (closer to $76 billion if you include constitutionally mandated spending). The Governor has requested nearly 400 new spending proposals, many of them one-time investments to be spent over several years. There are many worthy proposals in the Governor’s budget — most demonstrably, a $12 billion commitment to reduce homelessness.
California is one of the wealthiest places on earth. We have more billionaires than any other state and our per capita income ranks 6th among states at over $71,000 a year. California residents, by far, pay the most in federal income taxes, exceeding New York by roughly $90 billion annually. We have a highly progressive state tax structure that asks those with the most to pay more. This wealth provides the largest budget of any state in the nation. But for all its wealth, California has a dark side.
More than one in six children lives in poverty in California. 450,000 California children are estimated to live in households that earn less than half of the abysmally low federal poverty level. This is often referred to as deep poverty. Research shows that children who live in deep poverty experience a form of toxic stress that slows normal brain development, results in lower educational achievement, higher risk of chronic health conditions, and lower earnings as adults.
For decades, California has provided sub-meager grant levels to people who are disabled (Supplemental Security Income (SSI), families with kids (CalWORKs), and indigent single adults (General Relief). For years, CalWORKs grants were worth less than 40 percent of the federal poverty level, at around $700 a month. That’s a program for kids and families living deep poverty, where the family income is less than 50 percent of the poverty level. Due to ridiculously low CalWORKs grants, these families are housing unstable, and must occasionally use homeless services.
Former Senator Holly Mitchell led the effort to increase CalWORKs grant and succeeded when Governor Brown committed to a three-step increase to prevent children on CalWORKs from living in deep poverty. Though Governor Newsom did provide the second of the promised increases, his current budget doesn’t finish the job. It provides an increase that falls short of eliminating deep poverty among children.
To his credit, Governor Newsom gets it. In addition to following through on the second of the CalWORKs grant increases in his first budget, one of his first acts as governor was a refundable $1,000 child tax credit for families in poverty, paid for by closing corporate tax loopholes. Legislators and advocates believed that the dream of ending childhood deep poverty in California would finally happen in the 2020-21 budget, but then COVID hit. Millions of people lost jobs and the state’s revenues plummeted. California could no longer afford to end deep childhood poverty, or so we thought.
As it turns out, the state’s revenues quickly rebounded, since billionaires made so much money during the pandemic. California ended up with the largest surplus in its history.
Even so, Governor Newsom did not include funding to end childhood deep poverty in his 2021 May budget announcement, instead offering a modest, insufficient grant increase for CalWORKs. It is simply unacceptable that one of the richest places on earth will continue to allow children to live in abject poverty.
Similarly, the Governor offered a modest $10 a month increase to SSI recipients who are blind, aged and disabled. Over the past decade, the standard of living for SSI recipients has degraded due to the elimination of state cost of living adjustments and the resistance by successive governors to restore cuts made during the Schwarzenegger and early Brown administrations. California saved over $10 billion with those cuts and kept them in effect even when the state was running substantial surpluses with large reserves.
Against this backdrop, Senate Budget sub-committee #3 considered the Governor’s 2021-22 SSI proposal. The empathetic new chair, Senator Susan Talamantes Eggman, noted that the proposal leaves SSI recipients below the poverty level, and that she is helping a friend living on SSI just to make it month to month. Single, indigent adults leaving the criminal legal system have it even worse, with paltry assistance upon release and $221 in General Relief they can use for housing. In fact, 70% of Californians experiencing homelessness have a history of incarceration. It’s all a recipe for instability.
Governor Newsom really wants to do something about homelessness, which is good, but it doesn’t matter how much we spend on housing and services if we don’t slow the stream of people losing their housing due to poverty. California is using austerity tactics on people in poverty, getting the same results over and over again. Now we’re funding a $12 billion emergency program to fix the carnage. If we want to end homelessness, we must give people the money they need to stay stably and safely housed.
State governments are afraid to provide benefits it may have to cut down the road and believe that a way to save money is to deny adequate levels of assistance. What legislators fail to see is that the reluctance to spend money upfront causes enormous downstream costs. Homeless services, child welfare, emergency food, and foster care are not free, but require funding at ever increasing amounts. If we simply invested to keep people housed and healthy from the get-go, rather than forcing them to live in a constant state of toxic stress caused by extreme poverty, we might not have that problem.
In the next couple of weeks leading up to the budget deadline, the Legislature has a chance to end this shameful chapter in our history by using this year’s surplus to reverse toxic trends that reinforce poverty. Grants for SSI and CalWORKs should be substantially raised so no one is homeless, and the same level of benefits should be provided to people coming out of the criminal legal system and those on General Relief.
This is California, the 5th largest economy in the world. We can and must do better.
“Christopher Sanchez, a policy advocate at the Western Center on Law & Poverty, said the COVID-19 crisis has exacerbated inequities for California’s undocumented communities, many whom live paycheck-to-paycheck and lost jobs at unequal rates during the pandemic-induced recession.
“The governor’s proposal is absolutely a great step in the right direction for undocumented families,” Sanchez said. “However, we know that there are going to be individuals who are left out.”
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.
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.
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.
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.
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.
- $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.
- $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.
- $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.
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.
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.
- 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.
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.
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.
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.
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.
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.