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Western Center’s Overview of the Final 2023-2024 California State Budget

, By Western Center Policy Team

Summary 

The Governor and Legislature reached their 2023-2024 budget agreement, including a package of implementing bills detailing how California will spend $310 billion in revenues, manage a deficit, and maintain reserves for future uncertainty.  

After years of a budget surplus, California is forecasting a downturn in funding due to a combination of capital gains losses and delayed tax filings due to natural disasters, but California remains strong. The final budget reflects $37.8 billion in total budgetary reserves and additional funds from the Managed Care Organization tax.   

While the budget agreement avoids cuts to critical programs that communities with low incomes and communities of color rely on and investments in our safety net, there are still major gaps in the investments needed to build an equitable and thriving California. 

HEALTH CARE 

Health4All: The budget maintains full funding to expand full-scope Medi-Cal eligibility to all income eligible adults ages 26-49 regardless of immigration status on January 1, 2024.  

Managed Care Organization (MCO) Tax: The budget includes a larger and accelerated MCO tax with an earlier start date (April 2023 through the end of 2026). This results in $19.4 billion in total funding, which will offset the General Fund with the majority going to Medi-Cal investments. Medi-Cal investments include increasing reimbursements rates to 87.5% of Medicare rates for primary care, birthing care, and non-specialty mental health care. Other provider reimbursement will be decided and spent over a 4-to 5-year period instead of 8- to 10- year period originally proposed by the Administration.  

Covered California Affordability Funding: The budget rejects the proposed sweep of individual mandate penalty funds to the General Fund. Funds will be used as intended to lower costs of Covered CA plans and provides $82.5 million ($165 million ongoing) from penalty funds to lower copays and deductibles for about 900,000 Californians beginning January 1, 2024. The budget includes a $600 million loan from the Health Care Affordability Reserve Fund to the General Fund, to be repaid in 2025-26. 

Medi-Cal Transitional Rent: Funding to Medi-Cal plans under CalAIM community supports to allow up to six months of rent or temporary housing to eligible individuals experiencing homelessness or at risk of homelessness. 

Medi-Cal Asset Test Clean-up Language: The budget includes cleanup language from the 2022 Budget that expands Medi-Cal access for older adults and people with disabilities by eliminating the Medi-Cal asset test effective January 1, 2024. 

Community Assistance, Recovery, and Empowerment (CARE) Act: The budget includes additional funding to support the implementation of the CARE Act, including funding for earlier implementation for Los Angeles County and to double the number of hours per participant for legal services from 20 hours to 40 hours. 

HOMELESSNESS 

The Budget invests $3.5 billion in additional funding for homelessness programs, including $1 billion for the Homeless Housing, Assistance and Prevention grant program, which funds housing, outreach at encampments, emergency shelters and more. While there were no cuts, these investments represent a small portion of what it would take to tackle the crisis. With an estimated 171,521 unhoused residents living on the streets or in their cars, California is home to nearly one-third of the country’s entire homeless population. Looking forward, we will continue to advocate for ongoing long-term investments to ensure that deeply affordable housing units do not continue to languish in the pipeline, unhoused Californians need not wait months or years to access an affordable and accessible housing option, and we stem the inflow of Californians into homelessness through protecting their rights and preserving their affordable housing options. 

2023-24 Homelessness Investments include: 

Behavioral Health Bridge Housing Program: $1.5 billion over three years. 

Behavioral Health Continuum Infrastructure Program: $2.2 billion over five years for the Behavioral Health Continuum Infrastructure Program, of which $50 million in 2022-23 is for the Department of General Services, with short-term statutory exemption, to deploy an estimated 1,200 small homes in the City of Los Angeles, County of Sacramento, City of San Jose, and County of San Diego as rapidly as possible. 

CalAIM Transitional Rent: $175.3 million ($40.8 million General Fund, $114.9 million federal funds, and $19.6 million Medi-Cal County Behavioral Health Fund) at full implementation to allow up to six months of rent or temporary housing to eligible individuals experiencing homelessness or at risk of homelessness. 

Encampment Resolution Funding Grants: $400 million in one-time General Fund for a third round of Encampment Resolution Funding grants. 

HOUSING 

The 2021 and 2022 Budget Acts invested a combined $21.5 billion over multiple years to advance the greater availability of housing throughout California. The 2023 Budget largely maintains a portion of these commitments and includes a housing package of $14.7 billion for 2023-24. Overall, the proposal includes $500 million continued annual investment in the state Low-Income Housing Tax Credit program, $100 million for the Multifamily Housing Program, and $100 million for the Portfolio Reinvestment Program. These programs have a proven track-record of addressing housing affordability and homelessness across California.  

2023-24 Housing Investments include:  

Multifamily Housing Program: $100 million in 2023-24 for the Multifamily Housing Program for a total of $325 million in 2023-24.   

Dream For All:$500 million one-time General Fund to the California Housing Finance Agency for the Dream for All program, which provides shared-appreciation loans to help low- and moderate-income first-time homebuyers achieve homeownership.  

CalHome:$350 million one-time General Fund ($250 million in the 2022 Budget Act and $100 million committed for 2023-24) for the Department of Housing and Community Development’s CalHome program, to provide local agencies and nonprofit agencies with grants to assist low- and very-low-income first-time homebuyers with housing assistance, counseling and technical assistance. The Budget withdraws $50 million one-time General Fund in 2023-24, leaving $300 million for this program.   

Foreclosure Intervention Housing Prevention Program:The 2021 Budget Act included $500 million one-time General Fund for the Foreclosure Intervention Housing Prevention Program, which provides funds to various non-profit organizations to acquire foreclosed property and operate as affordable housing. The Budget defers $330 million of the $500 million one-time General Fund over four fiscal years—for a revised allocation of: $82.5 million in 2023-24, $85 million in 2024-25, $100 million in 2025-26, and $62.5 million in 2026-27.   

Downtown Rebound Program:The 2000 Budget Act included $25 million one-time General Fund for the Department of Housing and Community Development to provide funding for adaptive reuse of commercial and industrial structures to residential housing. The Budget reverts $17.5 million in unexpended funding that remained in this program after the Notice of Funding Availability.   

One-time investments, especially at this limited scale, are not sufficient to meet our state’s affordable housing and homelessness needs. While the final budget falls short of our requests to meet the housing and homelessness crisis at scale, we look forward to continuing our budget advocacy in the coming years to encourage the Governor and Legislative leadership to prioritize a comprehensive, long-term investment strategy that prioritizes significant, ongoing funding to solve homelessness and ensure that every Californian has a safe, stable home that they can afford. Ongoing investments can address the disproportionate harms of skyrocketing housing costs, housing instability, and homelessness on Black, Indigenous, and people of color, people living in poverty, and other marginalized communities. 

PUBLIC BENEFITS AND ACCESS TO JUSTICE  

CalWORKs: The budget includes a 3.6% increase to CalWORKs grants to continue efforts for No Child in Deep Poverty and makes permanent the 10% grant increase that took effect last October so no longer subject to a cut in 2024. Additionally, the budget requires CalWORKs grant display to account for households where the Assistance Unit does not account for all the people in the family, which applies to 60% of CalWORKs households. Unfortunately, the budget does not include Legislature’s proposal to implement the first phase of Reimagine CalWORKs despite UCSF’s new report that shows economic shocks are a key driver of homelessness that can be mitigated by reforming sanction. 

Food Assistance: The budget maximizes the new Summer EBT program, which will provide $40 per month in summertime food benefits to approximately 4 million children beginning in Summer 2024, bringing about $480 million in federally funded food benefits to California; initiates the CalFresh Minimum Nutrition Benefit Pilot Program, a $15 million pilot program to raise monthly minimum food benefits to $50 minimum from the current minimum of $23; approves the expansion of the California Food Assistance Program for adults age 55 and older, regardless of immigration status, to begin in late 2025, instead of January 2027; and approves improvement to EBT card security to protect CalFresh and CalWORKs families from theft. 

SSI/SSP: The budget includes an 8.6% increase to SSI/SSP grants and Cash Assistance for Immigrants (CAPI) program. Effective January 2024, this allocation will provide recipients with an increase in grant levels to $1,134 per month and $1,928 per month for couples. 

Humanitarian support: The budget approves $150 million for the Rapid Response program, which funds sheltering and humanitarian support at the Southern border.  

Safety Net Reserve: The budget rejects the May Revision proposal to draw $450 million from the safety net reserve.   

For questions, contact: 

  • Health:  Linda Nguy, Senior Policy Advocate – lnguy[at]wclp.org; Sandra Poole, Policy Advocate – spoole[at]wclp.org 
  • Housing and Homelessness: Cynthia Castillo, Policy Advocate – ccastillo[at]wclp.org; Tina Rosales, Policy Advocate – trosales[at]wclp.org 
  • Public Benefits/ Access to Justice:  Linda Nguy, Senior Policy Advocate – lnguy[at]wclp.org; Christopher Sanchez, Policy Advocate – csanchez[at]wclp.org 

Analysis Of Governor Newsom’s 2023-2024 May Revision Budget

, By WCLP Policy Team

The Newsom Administration released its 2023-24 May Revision budget, projecting a $31.5 billion deficit. After years of a budget surplus, California is forecasting a downturn in funding due to a combination of capital gains losses and delayed tax filings due to natural disasters, but California remains strong. The May Revision reflects a $37.2 billion in total budgetary reserves and additional funds from the Managed Care Organization tax.  

Governor Newsom maintains many of the Administration’s and legislature’s previous commitments and proposes no new trigger cuts. He also proposes no new corporate or personal taxes, despite calls from the Senate and advocates to increase taxes on wealthy corporations and the state’s highest earners.  

We appreciate that the May Revision maintains past budget agreements including expansion of Medi-Cal to all regardless of immigration status, reforming the Medi-Cal share-of-cost, and on-time implementation of food assistance for Californians 55 years of age or older, regardless of immigration status.  

As the fourth largest economy in the world, California has made great strides in addressing poverty and systemic inequities, but there is more work to be done. We look forward to working with the legislature and Administration to protect low-income Californians as the State enters more uncertain fiscal circumstances.  

Below are our initial reactions to the proposed budget by issue area, with a focus on changes from the January budget proposal.   

HEALTH CARE 

Health4All: The May Revision maintains full funding to expand full-scope Medi-Cal eligibility to all income eligible adults ages 26-49 regardless of immigration status on January 1, 2024. The May Revision includes increases for previous expansions for adults 50 and older and ages 26-49 due updated managed care rates, higher share of state-only costs, higher caseloads, and higher acuity members. 

Managed Care Organization (MCO) Tax: The May Revision proposes a bigger MCO tax with an earlier start date (April 2023 through end of 2026). This results in $19.4 billion in total funding, including $3.4 billion for 2023-24. $8.3 billion is proposed to offset General Fund and $11.1 billion is proposed to support Medi-Cal investments that improve access, quality, and equity over an 8- to10-year period. These investments include rate increases to at least 87.5% of Medicare for primary care, birthing care, and non-specialty mental health providers and the remainder will be put into a special fund reserve for future consideration.  

Covered California Affordability Sweep: The May Revision maintains proposal to sweep Covered California reserve fund to General Fund totaling $333.4 million. 

Distressed Hospital Loan Program: The May Revision includes up to $150 million one-time General Fund to provide interest-free cashflow loans to not-for-profit and public hospitals in significant financial distress or to governmental entities representing a closed hospital, for purposes of preventing the closure of, or facilitating the reopening of, those hospitals.  

Home and Community-Based Services Spending Plan Extension: The May Revision includes a six-month extension until September 30, 2024 for specified programs such as the IHSS Career Pathways Program and the Senior Nutrition Infrastructure Program to fully spend allocated funding based on critical programmatic needs.  

Doula Services Implementation Evaluation: To align with later implementation date, TBL is proposed to extend the timeline of the Doula Stakeholder Workgroup (from April 1, 2022 until December 31, 2023) and to extend the evaluation of the doula benefit implementation in the Medi-Cal program (from April 1, 2023 until June 30, 2025).  

Medical Interpreter Pilot Program: Through TBL, the May Revision proposes to extend the expenditure authority of the Medical Interpreter Pilot Project for 12 months, from June 30, 2024 to June 30, 2025.  

988 Update: The May Revision includes a one-time augmentation of $15 million for a total of $19 million, from the 988 State Suicide and Behavioral Health Crisis Services Fund for California’s 988 centers. This increase will support workforce expansion to handle increased answered call volume, extensions of service hours, and the availability of chat and text options for callers utilizing the 988 services.  

BH-CONNECT Demonstration (formerly referred to as CalBH-CBC Demonstration): The May Revision includes an update to the BH-CONNECT Demonstration to include a new Workforce Initiative and includes $480 million in funding for each year of the five-year demonstration period ($2.4 billion total funding and no General Fund).  

CalRX and Reproductive Health: The May Revision includes TBL and $2 million one-time General Fund reappropriation from the Capital Infrastructure Security Program and allows the use of these funds for reproductive health care if necessary. 

Community Assistance, Recovery, and Empowerment (CARE) Act: The May Revision includes additional funding to support the implementation of the CARE Act. Compared to the Governor’s Budget, the annual increase is between $43 million and $54.5 million to account for refined county behavioral health department cost assumptions, additional one-time $15 million General Fund for Los Angeles County start-up funding. The May Revision also includes an additional $16.8 million in 2023-24, $29.8 million in 2024-25, and $32.9 million ongoing to double the number of hours per participant for legal services from 20 hours to 40 hours. 

HOMELESSNESS

The May Revision preserves the full $3.7 billion in funding for homelessness programs, as committed in previous budgets, including $1 billion for the Homeless Housing, Assistance and Prevention grant program. 

May Revision Adjustments:  

Behavioral Health Bridge Housing Program: $500 million one-time Mental Health Services Fund in 2023-24 in lieu of General Fund. This investment eliminates the January Budget proposed delay of $250 million General Fund to 2024-25 and restores the $1.5 billion commitment funded in the 2022 Budget Act for the program. 

HOUSING

While the May Revision reflects a steady commitment to Homelessness investments, the May Revision also culminated in a weakening of housing investments totaling $17.5 million in General Fund reductions and $345 million in deferrals related to housing programs. Funding for housing programs remains at approximately 88% of the allocations made in 2022-23 and proposed for 2023-24 ($2.85 billion). This outlook could change if there are sufficient General Fund dollars in January 2024. If that occurs, the Governor has committed to restoring $350 million of these reductions. Overall, the proposal includes $500 million continued annual investment in the state Low-Income Housing Tax Credit program, $225 million for the Multifamily Housing Program, and $100 million for the Portfolio Reinvestment Program. These programs have a proven track-record of addressing housing affordability and homelessness across California. 

May Revision Adjustments: 

Foreclosure Intervention Housing Prevention Program: Provides funds to various non-profit organizations to acquire foreclosed property and operate as affordable housing. Deferral of $345 million of the $500 million one-time General Fund over four fiscal years—for a revised allocation of: $50 million in 2023-24, $100 million in 2024-25, $100 million in 2025-26, and $95 million in 2026-27 

Downtown Rebound Program: Funds adaptive reuse of commercial and industrial structures to residential housing. Reverts $17.5 million in unexpended funding that remained in this program after the Notice of Funding Availability. 

In contrast, the Senate’s Budget Plan, which was released two weeks ago, both prevents funding cuts and delays, and builds on our progress by including ongoing investment in homelessness and resources for key housing production programs. Notably, that Plan provides $1 billion in ongoing funds to support the Homeless Housing Assistance, and Prevention Program, $1 billion towards the state Low-Income Housing Tax Credit Program, and an additional $300 million flexible allocation towards affordable housing programs.  

Western Center is a proud member of a coalition of California’s leading affordable housing, homelessness, and housing justice advocacy organizations championing a comprehensive coalition investment strategy for affordable housing production, preservation, and tenant stability. While the May Revision falls short of our requests to meet the housing and homelessness crisis at scale, we look forward to continuing our budget advocacy and encourage the Governor and Legislative leadership to finalize a budget that includes ongoing, significant resources like those included in the Senate budget plan and our coordinated housing budget letter. 

PUBLIC BENEFITS AND ACCESS TO JUSTICE  

CalWORKs Grant Increase: The May Revision reflects a 3.6-percent increase ($111.2 million in 2023-24) to CalWORKs Maximum Aid Payment levels, effective October 1, 2023. These increased grant costs are funded through the Child Poverty and Family Supplemental Support Subaccount.  

Supplemental Security Income/State Supplementary Payment (SSI/SSP): The May Revision continues to include an 8.6% increase in funding for the SSI/SSP and Cash Assistance for Immigrants (CAPI) program providing a $3.6 billion from the general fund. This allocation provides recipients with an increase in grant levels to $1,134 per month and $1,928 per month for couples. 

California Food Assistance Program (CFAP) Expansion Update: The May Revision moves up the issuance of food benefits for older undocumented immigrants to start October 2025, instead of the January Proposal that delayed it until 2027, which we appreciate but we still need Food4All regardless of age and immigration status. 

Summer Electronic Benefit Transfer (EBT) Program: The May Revision includes $47 million ($23.5 million General Fund) for outreach and automation costs to phase in a new federal Summer EBT program for children who qualify for free or reduced-price school meals beginning summer 2024.  

Safety Net Reserve: The May Revision withdraws $450 million (half of $900 million) from the Safety Net Reserve. The reserve is intended to maintain existing Medi-Cal and CalWORKs program benefits and services when program cost may increase due to economic conditions, which may occur if recession occurs, so we argue it is prudent to not draw from Safety Net Reserve until those conditions are met. 

Services for Survivors and Victims of Hate Crimes Augmentation: The May Revision includes an additional $10 million General Fund to support services for victims and survivors of hate crimes and their families and facilitate hate crime prevention measures in consultation with the Commission on Asian and Pacific Islander American Affairs. 

For questions, contact: 

  • Health:  Linda Nguy, Senior Policy Advocate – lnguy[at]wclp.org; Sandra Poole, Policy Advocate – spoole[at]wclp.org 
  • Housing and Homelessness: Cynthia Castillo, Policy Advocate – ccastillo[at]wclp.org; Tina Rosales, Policy Advocate – trosales[at]wclp.org 
  • Public Benefits/ Access to Justice: Christopher Sanchez, Policy Advocate – csanchez[at]wclp.org 

2023-24 Housing and Homelessness Budget Blueprint for Impact

, By Coalition of California’s leading affordable housing, homelessness, and housing justice organizations, 

Sent February 6th, 2023

The Honorable Gavin Newsom Governor of California

Senate President Pro Tempore Toni Atkins

Assembly Speaker Anthony Rendon

Assembly Budget Chair Philip Ting

Senate Budget Chair Nancy Skinner

 

Re: 2023-24 Housing and Homelessness Budget Blueprint for Impact

Dear Governor Newsom, Senate President pro Tempore Atkins, Assembly Speaker Rendon, Assembly Budget Chair Ting, and Senate Budget Chair Skinner:

As you know, California’s affordable housing and homelessness crisis is one of the most pressing challenges facing our state and its residents. You have demonstrated your commitment to addressing this crisis through several years of historic investments and enacting meaningful policy change. We write to you as a united coalition of California’s leading affordable housing, homelessness, and housing justice organizations to propose a set of investments that should serve as a blueprint for housing investment in the 2023-24 budget.

We share your commitment to ensuring everyone in every community has access to a safe, stable, affordable home. However, to continue to build on our progress we must go beyond the investment signaled in the Governor’s January budget proposal and invest at a greater scale in deeply affordable housing development, preservation, homelessness, tenant protection, and affordable homeownership.

We recognize the complex, difficult choices the Administration and the Legislature face in the months ahead in confronting a major projected budget deficit, and appreciate the Administration’s commitment to maintaining many of the planned housing and homelessness investments committed in last year’s budget. We also know from previous deficits and recessions that economic downturns are precisely the times when we must invest in resources for our most marginalized neighbors to prevent our housing and homelessness crisis, and its disproportionate impact on people of color, from worsening. Now is the time to build on our momentum in securing a more stable and affordable California.

We are collectively calling for investing $7.9 billion in a critical continuum of housing production, preservation, and homelessness programs to advance housing affordability and economic resilience in California. Our coalition stands by this full suite of investments as a holistic package that can ensure that our state continues to build and preserve deeply affordable housing to address our shortfall of over a million affordable units for people with extremely low incomes, prevent people from falling into homelessness and solve homelessness for thousands of our neighbors living on our sidewalks and in shelters, and address the disproportionate harms of skyrocketing housing costs, housing instability, and homelessness on Black, Indigenous, and other people of color living in poverty.

$7.9 Billion Investment Strategy to Build on Progress on California’s Affordable Housing Goals

● $4 billion to unlock and accelerate production of 35,275 new affordable homes. We propose doubling the current state Low-Income Housing Tax Credit Program (LIHTC) with an additional $500 million beyond what was allocated in the 2022-2023 state budget. We also urge appropriating $2 billion to the Multifamily Housing Program (MHP) and $1.5 billion to the California Housing Accelerator Program (CHAP) and that HCD be given the authority, with DOF approval, to transfer amounts between these two programs in line with demand. Using a portion of MHP funds for capitalized operating subsidies or in conjunction with augmented HHAP allocations for operating subsidies would allow a significant portion of these funds to provide housing for extremely and acutely low-income households, where the greatest need currently exists.

● $2 billion in additional funding for the Homeless Housing, Assistance, and Prevention Program (HHAP) in 2023-2024 for a total of $3 billion in ongoing funding for future years, allowing 94,000 households to exit homelessness. This funding will provide local jurisdictions and Continuums of Care (CoCs) with adequate resources to rehouse about 20,000 households experiencing homelessness in year one, increasing to rehousing or preventing homelessness for 94,000 households annually by year five, by focusing investment on solutions like rental subsidies, services to help sustain housing, and homeless prevention programs that keep the most marginalized populations from falling into homelessness. Much of this funding can pay for operating costs of deeply affordable housing also created through this proposal, making state capital funding more effective. The Bring California Home Coalition is proposing pairing this funding with programmatic changes to enhance accountability, drive successful long-term outcomes, eliminate racial disparities, and advance workforce capacity and equity across local homeless response systems

● $1 billion to prevent displacement and homelessness for low-income households and preserve new affordable homes, to include:

○ $500 million for the Community Anti-Displacement and Preservation Program (CAPP) as proposed in Senate Bill 225 (Caballero) to spur the preservation of 3,600 homes, preserving low-income housing for 39,600 households over the next 55 years. This program will prevent displacement and homelessness by financing the acquisition of naturally occurring affordable rental housing and preserving it as permanently affordable. Acquisition preservation directly prevents low-income families from being displaced and potentially falling into homelessness today while also investing in expanding the supply of deed-restricted affordable homes for generations to come. CAPP fills a state funding gap where there are not currently resources to support this type and scale of acquisition preservation.

○ $500 million for a targeted rental subsidy program to prevent and end homelessness and displacement for over 13,500 older adults and people with disabilities each year, over four years. As proposed in Senate Bill 37 (Caballero), this funding will create a grant program to prevent the inflow of older adults and people with disabilities, the fastest-growing populations falling into homelessness, and help these populations exit homelessness.

● $500 million for affordable homeownership production through the CalHome Program to provide homeownership opportunities to 5,000 low-income Californians. CalHome is the only state homeownership program with funding dedicated to the construction of new owner-occupied homes for low-income families. CalHome supports programs prioritizing homeownership in various forms for low-income families so they can build equity, increase community stability, and gain the multi-generational benefits of owning a home.

● $200 million to support the affordable housing needs of farmworker and tribal communities. This allocation should include $100 million for farmworker housing development through the Joe Serna Farmworker Housing Grant Program. Farmworkers face significant housing disparities and require resources to ensure safe, quality housing that supports migrant families and make a life-changing difference in their children’s health and educational outcomes. These investments should also include $100 million for a new Tribal Housing Grant Program to help finance homes for rent or purchase on tribal trust and fee land and meet the unique housing, land, and sovereignty conditions of California tribes that are not being met by existing state housing programs.

● $200 million a year for 2 years for resources to help tenants utilize federal Housing Choice Vouchers through landlord recruitment, services, and resources to connect landlords and tenants. These programs have succeeded around the country in increasing voucher utilization and access for voucher holders.

● In addition, we support the augmentation of funding for the Civil Rights Department (CRD) included in the Governor’s January budget proposal to support investigation and enforcement of complaints related to SB 329 (Mitchell, Chapter 600, Statutes of 2019), which prohibited landlords from discriminating against prospective tenants with housing vouchers and other forms of public rental assistance. CRD receives upwards of 800 voucher discrimination complaints every year but does not have sufficient staff to process them all. Expanding enforcement of the state’s voucher non-discrimination law will increase the utilization and effectiveness of both federal- and state-funded rental subsidies.

We realize that these budget requests exceed what is outlined in Governor Newsom’s January budget proposal, but are eager to work with the Administration and the Legislature to seek collaborative and creative approaches, including through exploring new, dedicated revenue sources, to provide long-term funding solutions to our housing crisis. Together, we can ensure that deeply affordable housing units do not continue to languish in the pipeline, unhoused Californians need not wait months or years to access an affordable and accessible housing option, and we stem the inflow of Californians into homelessness through protecting their rights and preserving their affordable housing options. As such, our coalition stands fully committed to advocating for this full spectrum of housing and homelessness programs as a package. We recommend that any housing and homelessness investments beyond those proposed in the Governor’s January budget reflect the proportionality of the requests in this letter.

Thank you for your ongoing leadership and partnership in creating a more affordable and equitable California. We look forward to working together closely on the budget this year.

 

Western Center’s Analysis of Governor Newsom’s 2022-23 May Budget Revision

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.

Care 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

CalWORKs

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.

Food Assistance

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.

SSI/SSP

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.

HEALTH CARE

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.

Medi-Cal

  • 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.

____________________________________________________________

PDF of this document available here.

For questions contact:

 

Gov. Newsom Proposes $2.7B For Californians Still Waiting For Rent Relief

, LAist

“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.”

Read More

 

Analysis of Governor Newsom’s 2022-2023 California Budget Proposal

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.

SUMMARY

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.

HEALTH CARE

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.

Medi-Cal

  • 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 Housing

  • 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.

Homelessness

  • $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

CalWORKs Grants

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.

Workforce Development

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.

SSI/SSP Grants

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.

Home Visiting

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.

Civil Assessments

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

EPIC News – July 2021

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.

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

*PDF available here

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

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

FINANCIAL SECURITY

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

CalWORKs Grants:

ACCESS TO JUSTICE/ FINES & FEES

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

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

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

HEALTH CARE

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

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

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

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

HOUSING

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

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

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

The budget also includes significant investments in homelessness funding:

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

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

 

 

California leaders have two weeks to get the state budget right by investing in poverty elimination rather than band aids.

, By Mike Herald, Western Center's Director of Policy Advocacy

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.

 

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