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OP-ED: Governor: Don’t stigmatize California’s homeless

Western Center policy advocate Tina Rosales’ op-ed was published in Capitol Weekly. The piece explains how rhetoric about “dirty” conditions for unhoused community members, as used by Governor Newsom in his May budget presentation, further alienates people experiencing homelessness, and creates an even more dangerous situation for them.

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

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.

 

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

*PDF of this analysis available here.

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

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

OVERVIEW

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

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

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

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

ACCESS TO JUSTICE

Traffic Fines

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

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

Legal Aid for Renters in Landlord-Tenant Disputes

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

HEALTH

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

Medi-Cal

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

Other Health Proposals                                                  

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

HOUSING & HOMELESSNESS

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

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

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

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

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

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

In summary, the May Revise makes the following investments:

Rent and Housing Relief

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

Housing Production

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

Homelessness

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

Student Housing

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

Homeownership

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

PUBLIC BENEFITS

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

Food Security

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

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

Free School Meals

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

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

Food Distribution

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

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

CalWORKs

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

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


One Time CalWORKs Payments

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

CalWORKs Family Re-Unification Funding

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

CalWORKs Overpayments

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

CalWORKs Housing Support Program

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

Golden State Stimulus II

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

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

Guaranteed Basic Income Pilot

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

SSI/SSP

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

Housing Disability Advocacy Program

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

Immigration Programs

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

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

 

 

 

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

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

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

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

UpFront – March 10, 2021

Western Center’s Director of Policy Advocacy, Mike Herald, was on KPFA radio to discuss Governor Newsom’s March 9th State of the State Address.

Listen Here

(Interview begins at 9 min 25 seconds)

Pandemic reveals tale of 2 Californias like never before

“It’s all very frustrating, since with the fifth largest economy in the world, these things are fixable. The money is there,” said Courtney McKinney, spokesperson for the Western Center on Law and Poverty. “It is a question of priorities — whether or not millions of people being plunged into poverty is seen as enough of a destabilizer to encourage the wealthy, business and political class in California to put money into addressing poverty and the trappings of poor environment in smart, sensible ways. Easier said than done.”

Read More

 

 

These Californians don’t get stimulus checks — why advocates want Newsom to do more for them

“Christopher Sanchez, a policy advocate at the Western Center on Law & Poverty, said the COVID-19 crisis has exacerbated inequities for California’s undocumented communities, many whom live paycheck-to-paycheck and lost jobs at unequal rates during the pandemic-induced recession.

“The governor’s proposal is absolutely a great step in the right direction for undocumented families,” Sanchez said. “However, we know that there are going to be individuals who are left out.”

Read More

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

PDF available here

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

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

BACKGROUND

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

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

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

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

COVID-19

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

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

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

FINANCIAL SECURITY

CalWORKs

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

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

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

SSI/SSP

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

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

$2.4 Billion in Earned Income Tax Credit Assistance

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

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

Food Security

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

Higher Education

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

Child Support

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

Miscellaneous

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

ACCESS TO JUSTICE/ FINES & FEES

Online Traffic Court Adjudication Pilot

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

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

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

HEALTH CARE

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

Medi-Cal

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

Other Health Proposals                                                                     

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

HOUSING

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

Preventing Evictions and Foreclosures

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

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

National Mortgage Settlement Program

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

Anti-Discrimination

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

Low-Income Housing Tax Credits

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

Excess State Land Development

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

Construction Apprenticeships

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

Infill Infrastructure Grant Program

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

Expanded Facilities to Support Housing

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

Project Homekey

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

 

 

PRESS RELEASE: Governor Signs Historic Bill Repealing Unjust Criminal Fees in California, Providing Much Needed Relief to Californians 

***Western Center is part of the Debt Free Justice Coalition, which worked to achieve the historic, first in the country victory to end state law authorizing specified criminal justice fees, resulting in the repeal of 23 criminal justice fees and expunging an estimated $16 Billion in outstanding debt.***

 

FOR IMMEDIATE RELEASE

Governor Signs Historic Bill Repealing Unjust Criminal Fees in California, Providing Much Needed Relief to Californians

SACRAMENTO, CA—Last Friday, Governor Gavin Newsom signed AB 1869, making California the first state in the country to repeal administrative fees in the criminal system. This historic reform will reduce the harm caused by court-imposed debt and strengthen the economic security of low-income communities of color.

AB 1869 permanently ends the assessment and collection of 23 administrative fees in the criminal system effective July 1, 2021. The bill also writes off all outstanding fee debt. The Policy Advocacy Clinic at Berkeley Law estimates that AB 1869 will relieve Californians of over $16 billion in outstanding criminal fee debt, the vast majority of which is uncollectible because people cannot afford to pay.

According to Senate Budget Chair Senator Holly J. Mitchell (D-Los Angeles): “For too long, the imposition of fees by our courts has taken away much-needed resources from people and perpetuated historic forms of racialized wealth extraction. By eliminating these criminal administrative fees, we can put money back in the pockets of Black and Latinx people and invest in the public health and safety of all communities.”

Currently, California law permits counties to charge people administrative fees related to their legal representation, probation, and incarceration. These fees often add up to thousands of dollars for a single person and pose significant barriers to reentry. Unpaid fees can be enforced via wage garnishment, bank levy, and tax refund intercept.

“As a public defender, it is painful to watch clients be saddled with fees, knowing that they won’t be able to pay,” said San Francisco Public Defender Mano Raju, whose office is part of Debt Free Justice California. “The criminal legal system disrupts people’s lives and families in so many ways that adding financial penalties sets people up for failure when we should be setting them up for future success. By eliminating fees, we’re paving the way to more resilient communities.”

Angelique Evans, an organizer with A New Way of Life, shared her experience: “Almost immediately after being released from prison, Los Angeles County told me that I owed over $3,000 in administrative fees. As a mother, I wanted to prioritize taking care of my son and getting back on my feet. The fees held me back, both emotionally and financially. This bill will allow people returning home to focus on what matters most—rebuilding our families and lives.”

AB 1869 builds on years of organizing and advocacy by Debt Free Justice California. Research by the coalition shows that imposing fees on people in the criminal system is high pain because it leaves many with insurmountable debt, and low gain because counties net little, if any, revenue from these fees. Due to over-policing and racial bias in the system, the burden of fees falls disproportionately on Black and Latinx communities.

Out of concern for racial and economic justice, legality, and costs, four counties—San Francisco, Alameda, Contra Costa, and Los Angeles stopped charging some discretionary fees over the last few years. AB 1869 brings debt-free justice to all Californians across the state.

Jhumpa Bhattacharya, Vice President of the Insight Center for Community and Economic Development and member of Debt Free Justice California, said: “We joined together as a coalition to think bigger, broader, and more critically about how anti-Blackness, xenophobia and sexism underpin the rules of our economy, the criminal system and policing. The imposition of criminal fees was not simply a matter of good or bad fiscal policy, but a reflection of multiple systems of entrenched racism that have led to targeted policing and over-incarceration of Black and Brown communities, consequently widening racial and gender wealth inequality.”

The passage of AB 1869 will help California begin the process of reinvesting in communities and disinvesting from our carceral system.

CONTACTS:
Jhumpa Bhattacharya, Vice President of Programs and Strategy Clinical Supervising Attorney, Insight Center for Community Economic Development, 510-466-1711, jhumpa[at]insightcced.org

Stephanie Campos-Bui, UC Berkeley School of Law Policy Advocacy Clinic, 760-349-6631, scamposbui[at]law.berkeley.edu

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Debt Free Justice California is a multi-regional, California-based coalition focused on putting a stop to the unfair ways the criminal system drains wealth from vulnerable communities. The coalition is comprised of legal advocates, policy experts, and most importantly, movement building organizations led by impacted people. For more information, visit: https://ebclc.org/cadebtjustice/about/.