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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.

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PDF of this document available here.

For questions contact:

 

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

“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

 

PRESS RELEASE: Tenants-rights Groups Sue CA for Failing to Provide Rental Assistance to Eligible Tenants

  

 

FOR IMMEDIATE RELEASE 

 

 

Lawsuit says Department’s cutoff date for assistance means many tenants who receive rental assistance are still at risk of eviction

 

Los Angeles, CA – The California Department of Housing and Community Development (HCD) is being sued by tenants’ rights groups Alliance of Californians for Community Empowerment (ACCE Action) and Strategic Actions for a Just Economy (SAJE) over its failure to provide the full amount of rental assistance intended by the law establishing the state’s Emergency Rental Assistance Program (ERAP), putting tenants at increased risk of eviction and homelessness. ACCE and SAJE are represented by Western Center on Law & Poverty, Public Counsel, and Legal Aid Foundation of Los Angeles.

As people waited for HCD’s often onerous system to process applications, HCD abruptly stopped accepting applications on March 31, 2022, cutting off people in need of assistance after that point even when they qualify for but have not yet received their full 18 months of rental assistance. Specifically, the suit says HCD is not providing assistance for prospective rent or expenses incurred after March 31, 2022, even for eligible households that submitted an ERAP application before applications closed. This means applicants who were unable to pay April rent or beyond could still face eviction even if HCD approves their application, thereby defeating ERAP’s goal of preventing eviction and stabilizing households.

“When I heard about the ERAP program, I got very happy because I was impacted by COVID-19, and I lost my job,” said Dionicia Cipres, tenant and SAJE member. “I sent my ERAP application and I got approved for a few months, but I was put on hold for February and March. I had initially put down the April and May rents on my application, but when the March 31st deadline was announced, those months were not included and had to be removed. I don’t know how I’m going to pay June because I don’t have steady income.”

As California considers new proposals to combat homelessness, the ERAP program is intended to stop people from becoming homeless where it often starts — eviction.

“I was temporarily laid off from my job because of the pandemic and have not been able to get back to work,” said Isabel Tabora, ACCE member and tenant. “I applied for rental assistance but was told by the state program that they will not help me for April and May, even though I can’t pay rent for those months. Now my landlord has given me a 3-day notice for April. I am afraid that I will be homeless without more rental assistance.”

The highly publicized decision by lawmakers for ERAP to cover 100% of an eligible household’s rent debt is essential for preventing evictions tenants will be evicted unless all of their rent debt is resolved.

“An eviction is a scarlet letter for most renters, but especially low-income renters who have fewer options,” said Jonathan Jager, staff attorney at Legal Aid Foundation of Los Angeles. “If the ERAP program is supposed to prevent homelessness, it doesn’t make sense to provide assistance in a way that still leaves tenants vulnerable to being evicted.”

Under HCD’s current practice, landlords can still receive large ERAP payments while their tenants are evicted for non-payment of April 2022 rent. The Census Household Pulse Survey estimates that 32 percent of California renter households with pending rental assistance applications were “not at all confident” in their ability to pay April rent.

“The pandemic and its economic fallout is not over yet, particularly for low-income Californians — we’ve heard from many tenants that they are unable to pay April rent and beyond,” said Greg Bonett, staff attorney at Public Counsel. “For a tenant to face eviction while the state sends their landlord a check is absolutely confounding. By cutting off rental assistance, HCD’s policy is largely harming renters of color and allowing landlords to get paid and still evict their tenants.”

The lawsuit seeks to compel HCD to immediately reverse policies that stop payments to tenants for debt accrued after the sudden and arbitrary March 31, 2022 cutoff date, and to make available the full 18 months of rental assistance to all eligible applicants.

“California received billions of dollars from the federal government and has a significant state budget surplus — more than enough to keep people housed through ERAP,” said Madeline Howard, senior attorney for Western Center on Law & Poverty. “In the midst of a homelessness and housing affordability crisis, the state must use its resources to keep people in the homes they already have so as not to compound the crisis.”

Read the complaint here.

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Legal Aid Foundation of Los Angeles (LAFLA) is a nonprofit law firm that seeks to achieve equal justice for people living in poverty across Greater Los Angeles. LAFLA changes lives through direct representation, systems change, and community empowerment. It has five offices in Los Angeles County, along with four Self-Help Legal Access Centers at area courthouses, and three domestic violence clinics to aid survivors.

 

Public Counsel is a nonprofit law firm and the nation’s largest provider of pro bono legal services. It serves communities locally and nationwide by advancing civil rights litigation, advocating for policy change and providing free legal services to thousands of clients annually.

 

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

PRESS RELEASE: Disability, Civil Rights Groups Say Fundamental Questions Must Be Answered Regarding ‘CARE Court’ Proposal

FOR IMMEDIATE RELEASE 

After issuing a letter in strong opposition, groups request specific answers for core components of proposal

Sacramento, CA – With Governor Gavin Newsom’s proposal for a so-called “CARE Court” set to be heard by the legislature this week, and after more than 40 advocacy groups including ACLU California Action, Disability Rights California, and Western Center on Law & Poverty submitted resounding opposition to its related bill, SB 1338 (Umberg & Eggman), advocates say fundamental questions remain unaddressed by the administration and bill authors.

The specific questions advocates have about the proposal include:

  1. How would the CARE Court respond to the crisis of insufficient housing and treatment availability for people who need either or both?
  2. How would the CARE Court avoid reinforcing systemic racial biases which result in disproportionate numbers of Black and brown people unhoused and under court supervision?
  3. How would the CARE Court achieve effective outcomes with coerced treatment where evidence has consistently supported adequately resourced voluntary treatment instead?
  4. How would the CARE Court avoid fast-tracking vulnerable people with disabilities to conservatorship and the diminution of their autonomy and legal rights?

The joint opposition letter sent to legislators this month unequivocally states that the framework of the proposal is entirely and irreparably flawed. Specifically, if these fundamental questions go unaddressed, the proposal is simply bill language without substance.

“Instead of creating a new court system to delegate medical care, California should guarantee housing for people who are unhoused and for those with severe mental health disabilities,” says Helen Tran, health attorney for Western Center on Law & Poverty. “Forcing people into court-ordered treatment without guarantee of permanent housing will create a continuous cycle of court intervention when people find themselves back on the street due to California’s severe lack of affordable, permanent supportive housing. State funds should be directed toward the creation of housing and supportive services to help people maintain their housing and health care needs.”

The groups say the proposed CARE Court model will lead to unnecessary institutionalization of people with disabilities and unhoused people and will likely create a chilling effect that prevents people from seeking supportive services for fear of being institutionalized or otherwise having their rights stripped. The proposal also feeds into the false narrative that most unhoused people have a psychiatric disorder.

“CARE Court is a fast track to re-institutionalize Californians living with mental health disabilities,” says Kim Pederson, senior attorney at Disability Rights California. “The state should invest in evidence-based practices for voluntary engagement in community-based, trauma-informed, culturally-responsive mental health services. Instead, CARE Court creates a punitive system under which a person must comply with court orders or risk being conserved and institutionalized. True recovery and empowerment can only come from providing people with meaningful opportunities to make their own choices about the services that will work best for them.”

Additionally, by involving the legal system the proposal will perpetuate institutional 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, and because there is clear evidence that adequately resourced, intensive, voluntary outpatient treatment is more effective than court-ordered treatment.

“At a time when there is an unprecedented housing crisis that disproportionately impacts Black people and other people of color, many of whom have already been entangled in failed legal and other systems, this proposal if enacted would have disastrous consequences,” says Brandon Greene, director of the Racial and Economic Justice Program at the ACLU of Northern California. “What we need is investment in holistic community driven systems not punitive ones that further alienate and ostracize.”

Read the full letter of opposition.

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ACLU California Action is the statewide legislative policy arm of the ACLU affiliates in California. The ACLU works to protect civil liberties and civil rights and advance equity, justice, and freedom for all.

Disability Rights California (DRC) is the agency designated under federal law to protect and advocate for the rights of Californians with disabilities. The mission of DRC is to advance the rights, dignity, equal opportunities, and choices for all people with disabilities.Western Center on Law & Poverty fights in courts, cities, counties, and in the Capitol to secure housing, health care, and a strong safety net for Californians with low incomes, through the lens of economic and racial justice.

 

Splashy proposals cannot replace what’s needed to address homelessness in California

California has had it with homelessness. Whether you believe it is far past time to address the housing shortage or just want to see people off the streets, there is a growing consensus that something must change. Governor Newsom and several members of the California Legislature want to address the crisis partially by way of a proposal called CARE Court. But is it the right approach?

The appalling growth of people experiencing homelessness is matched only by the complete inability of government, policymakers, or industry to fix it. As Winston Churchill once observed, “You can always count on Americans to do the right thing — after they’ve tried everything else.” When it comes to solutions to the homelessness crisis, California has deployed many failed techniques, including poorly planned shelters and police harassment toward people on the street. One thing we know works — giving people enough money to afford rent, is repeatedly derided as “too expensive” (keep in mind, California is in its second year of much higher than anticipated budget surplus).

Solutions to homelessness are not as complex as we are often led to believe. We need to increase grants to adults who are disabled so they can afford rent, like what’s proposed in AB 1941 (Salas). We need to provide increased tax credits to families experiencing poverty, as proposed by AB 2589 (Santiago). We need to provide housing and support services to people coming out of incarceration, as proposed in AB 1816 (Bryan). And importantly, we need to provide permanent and ongoing rental assistance to low-income families and individuals so they can stay housed, as proposed by AB 2817 (Reyes). Those are the kind of policies that will make a visible difference on our streets and in people’s lives.

Governor Newsom’s new proposal is called “Care Court,” but it’s not about care, it’s about control – or at least the illusion of it. The proposal will make it easier for the state, cities, and counties to force people into treatment, and if they don’t go willingly, subject them to involuntary confinement. Here’s another way to think about it: the proposal presents a shiny new political solution that in practice blames and targets the victims of California’s economic, policy, and social failures without implementing proven solutions state resources should flow to – like permanent housing, support services, and more money for rent via programs like SSI, Guaranteed Income, and General Relief. Sure, those are expensive investments, but nowhere near the cost of the crisis playing out on California streets.

The legislative journey for the CARE Court proposal is about to start and it may very well pass through both houses, but in practice, it is likely to fail. Involuntary treatment does not work, especially without housing and services to follow it up. Western Center, ACLU California Action, Disability Rights California, and over 40 more organizations across California submitted an opposition letter to the legislative CARE Court proposal to highlight its fundamental flaws and to provide proven alternatives.

It’s not too late to do the right thing. California can provide large scale and ongoing rental assistance. Government can build thousands of units of affordable housing where the private market has failed. We can allow real rent control rather than the nod, nod, wink, wink version we have now. The one thing we can’t have is a system where the victims of policy incompetence are punished in such a potentially destructive way.