This May Revision stands in stark contrast to the budget of one year ago when COVID-19 first threw the Governor's budget proposal into disarray. Compared to a projected budget deficit of $54 billion a year ago, the state now has a projected $75.7 billion surplus. Combined with over $25 billion in federal relief, this supports a $100 billion California Comeback Plan—a once-in-a-lifetime opportunity to not only speed the state's recovery from the pandemic, but to address long-standing challenges and provide opportunity for every California family—regardless of their income, race, or ZIP code.
In this blog post, we will go over key investments in:
Education: including childcare, higher education and a new “14th” grade established by the creation of universal transitional kindergarten.
Housing & Homeless: A $9.3 billion package for housing and $6.8 billion for homelessness.
Health & Human Services: including the brand new expansion of Medi-Cal to undocumented seniors aged 60 and over.
Golden State Stimulus & Rent Relief: $8 billion in Golden State Stimulus payments to Californians earning less than $75,000 annually, including to immigrants who are undocumented. $5.2 billion for emergency rental assistance and back rent owed by Californians with low incomes.
Emergency Preparedness & Responses, Small Business Relief, and more!
Overall Budget Structure
The May Revision includes $24.4 billion in reserves—critical to a strong fiscal foundation, as last year clearly demonstrated. The reserve funds include: $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 an estimated $3.4 billion in the state’s operating reserve.
The May Revision continues to pay down the state’s long-term retirement liabilities and reflects $3.4 billion in additional payments required by Proposition 2 in 2021-22 and $7.9 billion in additional payments over the next three years. The improved revenue forecast also allows for the elimination of $2 billion in proposed program suspensions that were delayed at the Governor’s Budget. Additionally, for some bargaining units, employee compensation reductions and pay deferrals will end automatically by provisions of their agreements, and the California Department of Human Resources is inviting the remaining bargaining units through collective bargaining to discuss revising these agreements.
While the economic outlook and revenue have improved dramatically, the same budget resiliency that helped the state through the pandemic will continue to be critical to protect programs in the future and to prepare the state for emergencies. The forecast does not project large structural deficits; however, risks to the economic forecast remain—new coronavirus variants, vaccine hesitancy, higher inflation if disrupted supply chains cannot support increased consumer demand, and a stock market decline that would impact state revenues. These risks, together with the one-time nature of the federal funds and new revenue, constrain the state’s ability to significantly expand ongoing commitments.
The State Appropriations Limit, or “Gann Limit,” caps the amount of revenues from proceeds of taxes that can be appropriated by the state, which constrains state spending and requires revenues over the two-year limit to be allocated evenly between schools and taxpayer refunds. The Governor’s Budget projected that the state could exceed the limit over the 2018-19 and 2019-20 two-year period by $102 million. Based on final revenues, the limit for that two-year period was not exceeded. However, the May Revision projects that the limit for the 2020-21 and 2021-22 fiscal years will be exceeded by $16.2 billion. This estimate will continue to be revised until May 2023. The May Revision allocates $16.2 billion to comply with the limit, including tax refunds through a Golden State Stimulus and allocating half of the funds to K-14 schools in 2022-23. Given the uncertainty around the calculation of the limit in future years, the multi-year projections do not assume additional payments.
The May Revision includes total funding of $121.7 billion ($70 billion General Fund and $51.7 billion other funds) for all K-12 education programs, the highest level of funding in California's history. Per-pupil funding is also at the highest levels ever, totaling $13,977 per pupil in Proposition 98 General Fund and $21,152 per pupil when accounting for all funding sources.
California for All Kids
Public schools hold the promise of serving as the hubs for California communities, a source of shared local pride and engagement, and the foundation for providing all children with opportunity. The potential of public schools to drive positive change and reduce societal inequities is immense. It is time to re-envision the K-12 public educational experience by directing historic levels of funding to schools, improving outcomes for all young Californians and ensuring the future prosperity of the state. The May Revision utilizes this opportunity by proposing the California for All Kids Plan, a five-year strategy for public school investment that offers every child in California the comprehensive support necessary to reach their full potential.
The California for All Kids Plan invests aggressively in equity. Nearly two out of every three of the state’s school-age children have a family income that qualifies them for free and reduced-price school meals (less than or equal to 185 percent of the federal poverty level). These children are less likely to have access to enrichment opportunities and comprehensive services like many of their peers, including stable health care and mental health services, access to technology, consistent opportunities for a variety of engaging and enriching extracurricular activities, and educators that are well-prepared to meet their needs. Public schools serve a central role in closing these historic and structural opportunity gaps. The California for All Kids Plan provides a roadmap to equip schools to do this work, specifically by achieving all of the following by 2025-26:
- Universal access to transitional kindergarten so all children enter the school system prepared to succeed
- Year-round access to enrichment activities and before/after-school supplemental education programs for children in low-income communities
- Well-prepared and well-supported teachers
- Deeper connections and relationships between students and adults on campus, with training in tiered systems of student supports, including more school counselors, social workers, and nurses
- Increased access to school-wide nutrition programs
- An improved and more integrated relationship between schools and health care plans, county health, and social services to provide school-based services to children
- Greater student access to broadband internet and computer technology, both in the classroom and at home
Notable Funding Allocations
$121.7 Billion for all K-12 education programs
$93.7 billion for 2021-2022
$13,977 in per pupil spending, Prop 98; $21,152 in per pupil spending when accounting for all funding sources
$7 billion to help close the digital divide by funding Broadband for All.
Budget assumes a return to full-time in person instruction for the 2021-22 school year.
$2 billion in one-time Prop 98 GF to fund health & safety activities, including testing and vaccine initiatives, enhanced cleaning, PPE, and improved ventilation.
Expanded Learning Time: The May Revision reflects a five-year plan to implement expanded-day, full-year instruction and enrichment for all elementary school students in schools with the highest concentrations of low-income students, English language learners, and youth in foster care (representing approximately 2.1 million children).
The Administration estimates that the Prop 98 General Fund (GF) costs to implement this proposal is approximately $1 billion in 2021-22, growing to $5 billion in 2025-26.
By 2025-26, these students would have access to no-cost after school and summer programs. When combined with regular instructional time, this will provide students with nine hours of developmentally appropriate academics and enrichment per instructional day and for six weeks each summer.
Additionally, these programs would be required to maintain adult-to-student ratios of 1:10 for transitional kindergarten and kindergarten students and 1:20 for students in first through sixth grades.
Over the implementation period, services would be phased in, with the local educational agencies with the highest proportion of students from low-income families, English language learners, and youth in foster care being provided the ability to access extended day/year programming first. Once fully implemented, the Administration proposes incorporating these funds into the LCFF concentration grant calculation.
Universal Transitional Kindergarten
The Governor proposes a series of investments beginning in 2022-23 to incrementally establish universal transitional kindergarten, creating a "14th grade" of public education by 2024-25. Universal transitional kindergarten would be phased-in over four years, with schools able to use 2021-22 for planning and infrastructure development, and additional access for four-year-olds, increased in increments of three months of age per year from 2022-23 through 2024-25, when all four-year-olds would be eligible.
$900 million GF in 2022-23, growing to $2.7 billion in 2024-25. Additionally, the May Revision repurposes $250 million one-time Proposition 98 GF proposed in the Governor's Budget to incentivize transitional kindergarten expansion to instead be used for planning and implementation grants for all local educational agencies.
To build on and enhance the quality of the existing transitional kindergarten program, the May Revision also proposes $380 million Proposition 98 GF in 2022-23, growing to $740 million in 2024-25, to provide one additional certificated or classified staff person in each transitional kindergarten classroom. For many classrooms, this will reduce adult-to-child ratios from 1:24 to 1:12.
$10 million one-time GF for the Department of Education to update the Preschool Learning Foundations, the recommended learning standards for preschool and transitional kindergarten, to reflect the most recent research on early childhood development and provide comprehensive resources for pre-kindergarten teachers.
Student Supports & Services (Community Schools):
The Governor proposes $3 billion in one-time Prop 98 GF, to further expand the implementation and use of the community school model.
Community schools blend various funding sources to provide integrated health, mental health, and social services alongside high-quality, supportive instruction. In addition to these integrated student supports, community schools offer expanded learning time, active family and community engagement, and collaborative leadership and practices, which are also funded in other proposals in the May Revision. This level of proposed funding would support grants for up to 1,400 local educational agencies (more than 60 percent of local educational agencies statewide) to convert school campuses into full-service community schools.
$2 billion one-time federal funds and $623 million one-time Prop 98 GF to schools to provide research-tested interventions for students, including intensive tutoring.
$1 billion for the Administration’s Children and Youth Behavioral Health Initiative. This Initiative is designed to comprehensively re-envision the child behavioral health system, by better connecting children and youth to behavioral health care, investing in schools’ ability to both deliver care directly and partner with Medi-Cal plans, and significantly expanding the infrastructure for providing behavioral health care for all Californians under the age of 26.
To expand access to subsidized school meals, the May Revision includes $150 million ongoing Prop 98 GF to encourage schools to participate in one of the federal universal meal provisions.
Participation in a universal meal provision allows schools to serve breakfast and lunch at no charge to all students and greatly reduces the administrative burden associated with collecting school meal applications. Students eligible for free and reduced price meals are also more likely to participate in universal school meal programs. Finally, local educational agencies participating in a federal universal meal provision generally receive increased federal meal reimbursement.
$30 million one-time General Fund (up from $10 million in the Governor's Budget) to the Department of Food and Agriculture to support the Farm to School initiative.
Maintaining the state’s substantial investments in Cal Grant, two years of free community college, and other aid programs.
Making summer financial aid resources for the UC and CSU permanent, assisting students in their efforts to improve timely degree completion.
Providing the CCCs with additional resources to support basic needs centers and coordinators, and Dreamer Resource Liaisons, thereby providing additional support for underrepresented students.
Higher Education: The state’s primary method for addressing college affordability issues has long been providing direct subsidies for tuition and non-tuition costs through the Student Aid Commission’s Cal Grant Program. The May Revision builds on this approach by:
College Savings Account: $2 billion to establish college savings accounts for all current low-income public school students, with supplemental investments for foster youth and homeless students enrolled in a public school, and for successive cohorts of these student populations as they enter first grade. The program will involve:
Establishing the California Child Savings Program, administered by the ScholarShare Investment Board, to create college savings accounts targeted to low-income and underrepresented public school students.
Establishing accounts for every student qualifying as low-income as defined by the Local Control Funding Formula (students eligible for free or reduced-price meals under the National School Lunch Program, English learners, and foster youth).
Providing seed funding of $500 for each account, with qualifying foster youth and homeless students each receiving an additional supplemental seed deposit of $500.
College savings accounts will not solve poverty today, but they are a long-term investment in children and their financial futures, and promote positive savings behavior.
- Defferals: Recession-driven revenue reductions anticipated at the 2020 Budget Act drove the need to defer LCFF apportionments, in the amounts of $1.9 billion in 2019-20, growing to more than $11 billion in 2020-21. The Governor’s Budget proposed paying off the full K-12 deferral in 2019-20 and $7.3 billion of the K-12 deferral in 2020-21, leaving an ongoing K-12 deferral balance of $3.7 billion in 2021-22. The May Revision further reduces this by $1.1 billion, for a proposed 2021-22 K-12 deferral balance of $2.6 billion.
- Educator Preparation, Retention, and Training: The transformative changes proposed in the May Revision require a well-prepared, well-trained, and expansive educator workforce. Preparing, training, and recruiting a diverse workforce of administrative, credentialed, and classified staff to work in public K-12 schools is critical to the success of the entire system. To this end, the May Revision builds upon more than a half billion in investments proposed in the Governor's Budget to further expand the state’s educator preparation and training infrastructure by providing a grand total of approximately $3.3 billion to support educator initiatives. These proposals include:
- An additional $450 million one-time Proposition 98 General Fund over five years (for a total of $550 million) to support approximately 22,000 teacher candidates in teacher residencies and other grow-your-own teacher credentialing programs.
- An additional $400 million one-time General Fund over five years (for a total of $500 million) for the Golden State Teacher grants, which would support a combined total of at least 25,000 grants for teacher credential candidates who commit to teach at a priority school, in a high-need subject matter area, for four years.
- An additional $100 million one-time Proposition 98 General Fund over five years (for a total of $125 million) for the Classified School Employee Teacher Credentialing Program, to support more than 5,000 classified school staff in becoming credentialed teachers.
- $65.5 million one-time Proposition 98 General Fund and $45.6 million one-time General Fund to establish the Roadmap to Pre-K through 12 Educational Employment Program, a long-term, comprehensive statewide recruitment and communications strategy that focuses on recruiting and developing a diverse and talented educational workforce, highlighting the value of working in the education sector, and assisting individuals in moving into the pre-K‑12 educator workforce by identifying and sharing resources, such as financial aid programs and pathways to teaching.
- $20 million one-time General Fund to provide a credential fee waiver in 2021-22 for individuals entering the K-12 educator workforce.
- $15 million one-time Proposition 98 General Fund over three years to support 6,000 teachers in completing the coursework necessary to receive state certification to teach computer science.
Housing & Homelessness
California’s statewide housing shortage has been decades in the making—long before the COVID-19 Pandemic. In recent years, the state has made significant investments to bolster much-needed affordable housing production through tax credits, housing-related infrastructure grants, and financing loans. The pandemic further exacerbated the statewide housing shortage and impacted housing affordability.
The May Revision promotes and maintains stable housing through additional and expanded rental assistance, foreclosure prevention, and down payment assistance investments. Moreover, to continue the momentum on housing production, the Administration also proposes innovative ways to further plan, produce, preserve, and enhance the state’s supply of long-term affordable housing. The following May Revision concepts build upon the $750 million in investments proposed in the Governor’s Budget, for a total 2021-22 housing package of $9.3 billion.
California's COVID-19 Rent Relief Program: The federal American Rescue Plan Act of 2021 (ARPA) provided for an additional $2.6 billion to California for both state and local entitlement jurisdictions for a total of $5.2 billion in federal rental relief aid. The May Revision includes statutory amendments to maximize the use of available federal funds for rental, utilities, and housing-related expenses to help as many Californians as possible stay housed, while bolstering the economic resiliency of those hardest hit by the pandemic. Additionally, the state continues to utilize $331 million in National Mortgage Settlement funds for mortgage assistance. The state is also preparing to utilize $1 billion from ARPA Homeowner Assistance Funds to the California Housing Finance Agency (CalHFA) to provide additional mortgage assistance, principal reductions, and qualified housing-related charges to provide housing stability.
Homeowner & Renter Legal Assistance: As homeowners and renters continue to face economic challenges caused by the pandemic, the May Revision includes $20 million in federal ARPA Coronavirus State Fiscal Recovery Funds for the next three years ($60 million total) to the Judicial Council to continue providing legal assistance grants to over 100 legal service and self-help organizations.
Increasing Housing Production: The May Revision proposes $1.75 billion one-time federal ARPA funds to help support HCD affordable housing projects. This will help more than 6,300 units of shovel-ready affordable housing move forward quickly rather than accumulating costs while waiting for a potential future tax credit. This effort will be combined with other homelessness proposals mentioned later in this Chapter.
Accessory Dwelling Unit Financing: To foster greater economic recovery and affordable housing, the May Revision includes an additional $81 million one-time federal ARPA funds to expand CalHFA’s ADU program to inject a total of $100 million in available financing for ADUs. Because ADUs have quicker local approvals, this proposal will further expedite low-cost production and more quickly increase the housing units statewide.
Promoting Homeownership: As the state economy recovers, the affordability crisis continues, and first-time homebuyers, particularly from disadvantaged communities, struggle to purchase a home. To encourage economic recovery, resiliency, and equity, the May Revision includes $100 million one-time federal ARPA funds to CalHFA to expand its First Time Homebuyer Assistance Program, which helps first-time homebuyers with making a down payment, securing a loan, and paying closing costs on a home. The May Revision proposes to expand the program to lower-income households and expand CalHFA’s lender network to help address the wealth gap, particularly in disadvantaged areas throughout the state.
Homeslessness: Over the past several years, the state has invested billions of dollars to provide critical housing supports and services to local jurisdictions for the homelessness population. The May Revision builds substantially on this investment by providing an additional $4.7 billion reflecting a comprehensive approach to ending family homelessness, expanding access to housing, and providing additional housing supports for vulnerable populations. The following May Revision concepts add to the $2.1 billion in investments proposed in the Governor’s Budget, for a total 2021-22 homelessness package of $6.8 billion.
The COVID-19 Pandemic also provided a creative opportunity for the state to provide shelter for at-risk individuals to avoid being exposed to or contracting COVID-19. Project Roomkey allowed for unused hotels and motels to provide temporary non-congregate shelter during the pandemic, and similar properties across the state were made available to be acquired and converted into permanent housing through the Homekey Program. The state and local jurisdictions must use this opportunity to continue providing housing and providing supportive services to the state's most vulnerable populations.
Ending Family Homelessness: According to the 2020 Point-In-Time count, families are the fastest-growing segment of Californians experiencing homelessness. The May Revision includes proposals that would address family homelessness over five years by making significant investments in affordable housing for low-income families with children while simultaneously investing in safety-net programs (including CalWORKs), and health services by leveraging Medicaid.
- Homekey Family Housing—$2.75 billion one-time funds over two years for the additional acquisition and rehabilitation of facilities through the Homekey program. Of this amount, $1 billion is targeted for families experiencing homelessness or at risk for being homeless.
- Challenge Grants & Technical Assistance—$40 million one-time General Fund available over 5 years, for the Homeless Coordinating Financing Council to provide grants and technical assistance to local jurisdictions to develop action plans that will address family homelessness and move the state closer to attaining functional zero family homelessness. Grants will be used to accelerate local jurisdictions’ rehousing efforts that can demonstrate cross-system collaboration, multi-funder initiatives, and efforts that coordinate across funding streams and systems. This initiative strengthens the state’s continued system-level improvements while local communities work toward eliminating family homelessness in an equitable and holistic manner.
- DSS Homelessness Supports—The May Revision includes $475 million General Fund in both 2021-22 and 2022-23 to expand the existing CalWORKs Housing Support program. This program assists CalWORKs families experiencing homelessness to secure and maintain permanent housing; services include financial assistance and housing related wrap-around supportive services. In addition, the May Revision also includes $280 million General Fund in both 2021-22 and 2022-23 to expand the existing Bringing Families Home program. This program provides housing-related supports to eligible families experiencing homelessness in the child welfare system.
- Behavioral Health Continuum Infrastructure—The Governor’s Budget proposed $750 million one-time General Fund for competitive grants to qualified entities to construct, acquire, and rehabilitate real estate assets to expand the community continuum of behavioral health treatment resources. The May Revision increases the Governor’s Budget proposal by $10 million Coronavirus Fiscal Recovery Fund (CFRF) and shifts $300 million General Fund to the CFRF. In addition, the May Revision includes $1.4 billion ($1.2 billion General Fund and $220 million CFRF) for the program in 2022-23 (for more information, see the Health and Human Services chapter).
Supporting Vulnerable Populations: With the number of elderly homeless Americans expected to triple in the next decade and to meet the complex needs of people with disabling conditions, the May Revision includes investments in new and existing programs administered by the Department of Social Services.
- Housing and Disability Advocacy Program—$175 million General Fund annually through 2023-24 to better reach and house individuals who are eligible for but not currently receiving SSI/SSP through benefits advocacy and housing assistance.
- Home Safe—$100 million General Fund annually through 2022-23 for the Home Safe program to provide access to health, safety, and housing supports for individuals involved in or at risk of involvement in Adult Protective Services.
- Community Care Expansion—An additional $250 million one-time federal CFRF, for a total of $500 million, to the Department of Social Services for competitive grants to qualified county and tribal entities for the acquisition and rehabilitation of adult and senior care facilities for those who are homeless or at-risk of becoming homelessness and have higher level of care needs.
- Supportive Services for Formerly Homeless Veterans—$25 million one-time General Fund for the California Department of Veterans Affairs to administer a competitive grant program to support aging veterans and veterans with disabilities who have experienced chronic homelessness. This program will provide a higher level of on-site supportive services, such as in-home support to help with habitability, peer specialists to encourage veterans to engage in mental health care, and geriatric social workers to identify behavioral issues related to early onset dementia or similar cognitive issues. This program will support residents in permanent supportive housing.
Health & Human Services
The Health and Human Services Agency oversees departments and state entities that provide health and social services to the most vulnerable and at-risk Californians. The Agency is leading the response to the COVID-19 Pandemic along with the Governor’s Office of Emergency Services. The May Revision includes $207.7 billion ($54.2 billion General Fund and $153.5 billion other funds) for all health and human services programs.
The May Revision proposals transform the behavioral health system for children and youth, support vulnerable and homeless families, build an age-friendly state for older Californians, and provide care to the most marginalized. These proposals independently help bolster critical safety net programs that support and empower Californians. Taken together, these investments advance the health and well-being of all Californians, as well as their social and economic mobility.
To help address projected structural deficits, the Legislature assumed in the 2020 Budget Act the suspension of various health and human services investments effective July 1, 2021 and December 31, 2021. Given the improved revenue outlook, the Governor’s Budget proposed to delay the suspensions for one year. The May Revision proposes to eliminate the suspensions. These suspensions include, but are not limited to, Proposition 56 supplemental payment increases, reversing the 7-percent reduction in In-Home Supportive Services hours, and Developmental Services provider rate increases.
Transforming the Behavioral Health System for Children & Youth
The pandemic has exacerbated behavioral health conditions for children and youth. Absent action, these conditions will grow and intensify with more young people emerging with untreated anxiety, depression, psychosis, and new substance use disorders. Half of all lifetime cases of diagnosable mental illnesses begin by age 14 and three fourths of all lifetime cases of diagnosable mental illness begin by age 25. Historically the adolescent substance use disorder system in California has been under-scaled. Addressing these needs is vital to California’s recovery.
The children’s behavioral health system needs more focus on prevention, increasing the number of behavioral health professionals, providing more crisis services, and adding acute care services and beds. Coordination between systems must also be improved to avoid delays or barriers to services. The most glaring behavioral challenges are borne inequitably by communities of color, low-income communities, LGBTQ+ communities, and in places where adverse childhood experiences are widespread and prominent.
The goal is to transform California’s behavioral health system for children and youth into a world-class, innovative, and prevention-focused system where all children and youth are routinely screened, supported, and served for emerging and existing behavioral health needs. To realize this goal, the May Revision includes $1 billion from the federal American Rescue Plan Act's Coronavirus State Fiscal Recovery Fund (ARPA) in 2021-22, $1.7 billion ($1.3 billion ARPA, $300 million General Fund, and $100 million Federal Trust Fund) in 2022-23, and $431 million ($300 million General Fund) ongoing for the Children and Youth Behavioral Health Initiative. (Some of these amounts also relate to proposed changes to the Behavioral Health Continuum Infrastructure proposal described under the Department of Health Care Services.)
Services developed under the Initiative will be provided to children and youth age 25 and younger, available statewide (in both commercial plans and Medi-Cal), evidence based, culturally competent, and equity focused. Services will address a broad and complex range of issues affecting mental and emotional well-being, including alcohol and other substance use, stress, trauma, grief, anxiety, and psychological disorders. Connecting children and youth to these services will be a set of interactive tools available via virtual platform 24 hours a day, seven days a week. In short, the Initiative will identify children who need help early, provide services where and when needed, and make programs and services available to meet their needs. Furthermore, supports will be provided for young people facing challenges at home or who are having difficulty forging positive and supportive adult relationships.
The May Revision also includes the following augmentations related to behavioral health for children and youth:
- Lanterman Act Provisional Eligibility—The May Revision includes $23.8 million ongoing General Fund to provide children aging out of Early Start provisional Lanterman service eligibility up to age five.
- Mental Health Services Act Partnership Grant Program—The May Revision includes $30 million one-time Mental Health Services Fund for the Mental Health Student Services Act partnership grants.
- Foster Youth—The May Revision includes $39.2 million General Fund to assist counties with serving foster youth with complex needs and behavioral health conditions, within California, as well as youth that return from an out-of-state congregate placement.
- Treatment and Prevention of Adverse Childhood Experiences—Housed within the Office of Planning and Research, the California Initiative to Advance Precision Medicine supports collaborative research and partnerships between the state, researchers, patients, communities, and industry to advance a holistic perspective of physical and mental wellbeing. The May Revision includes $12.4 million one-time General Fund for seven demonstration projects focused on advancing research on, and building scalable approaches to, treating and preventing Adverse Childhood Experiences (ACEs). Funding will further the Administration’s efforts to better understand and treat ACEs by strengthening workforce training efforts, building a statewide stress surveillance network, and broadening the network of clinicians and providers that are equipped to treat and prevent toxic stress resulting from ACEs.
Building an Age-Friendly State for Older Individuals
The pandemic disproportionately harmed older and other at-risk adults and strained aging and disability services. Older adults have accounted for unprecedented death rates—particularly among Latino, Black and Asian Pacific Islander communities and those living in nursing homes. Intensified social isolation has been especially burdensome. The suffering experienced by and pressures placed on older adults, people with disabilities, caregivers, service providers, and advocates during this time have made implementing parts of California’s Master Plan for Aging even more urgent.
The Master Plan for Aging applies the lessons learned during the pandemic, which has highlighted the need to embrace new ways to support older adults, people with disabilities, and communities of color. The Master Plan for Aging calls for California communities to build a California for All Ages where people of all ages and abilities are engaged, valued and afforded equitable opportunities to thrive as we age. Consistent withthe Master Plan for Aging, the May Revision makes investments in order to realize the promise of an age-friendly state. The May Revision proposes:
- Medi-Cal Coverage to Undocumented Older Adults—The May Revision includes $69 million ($50 million General Fund) in 2021-22 and $1 billion ($859 million General Fund) ongoing to expand Medi-Cal, including In-Home Supportive Services, to undocumented adults aged 60 and older effective no sooner than May 1, 2022.
- Older Adult Recovery and Resiliency—The May Revision includes $106 million General Fund available over three years, to strengthen older adults’ recovery and resilience from isolation and health impacts caused by the pandemic. This investment will increase service levels of existing programs based on local need including: Senior Nutrition, Senior Legal Aid, Home Modifications and Fall Prevention, Behavioral Health Friendship Line, Senior Digital Assistance, Family Caregiver Support, Senior Employment Opportunities, Elder Abuse Prevention, and Aging & Disability Resource Connection.
- CalFresh Expansion Older Adult Outreach—The May Revision includes $2 million ($1.1 million General Fund) ongoing for the Department of Aging to continue CalFresh Expansion outreach efforts to older adults.
- Master Plan for Aging Implementation—An April 1 proposal included $3.3 million General Fund ongoing to provide the Department of Aging policy, project management, and information technology leadership necessary to implement the Master Plan for Aging.
- Department of Aging Suspensions—The May Revision proposes to eliminate suspensions for Aging and Disability Resource Connections and Senior Nutrition resulting in a cost of $13.8 million General Fund in 2022-23 and $27.5 million ongoing.
- Office of Medicare Innovation and Integration—An April 1 proposal included $602,000 ($452,000 General Fund) ongoing to provide the Department of Health Care Services focused leadership and expertise to lead innovative models for Medicare beneficiaries in California, including both Medicare-only beneficiaries and individuals dually eligible for Medicare and Medi-Cal.
- Office of Long-Term Care Patient Representative—An April 1 proposal included $4 million Public Health Licensing & Certification funding ongoing for the Department of Aging to provide public patient representatives to nursing facility residents who lack capacity to make their own health care decisions and who do not have a family member or friend who can act as a patient representative.
- Alzheimer’s Augmentation—Building on investments proposed in the Governor’s Budget, the May Revision includes $12.5 million General Fund one-time to address Alzheimer’s in California. These investments include $5 million for public awareness, $2.5 million for standards of care, and $5 million for geriatric workforce development.
- Home Safe—The May Revision Includes $100 million General Fund in both 2021-22 and 2022-23 for the Home Safe program for access to health, safety, and housing supports for individuals involved in or at risk of involvement in Adult Protective Services.
- Housing and Disability Advocacy Program—The May Revision includes $175 million General fund annually through 2023-24 to assist disabled individuals who are experiencing homelessness. Additionally, the May Revision waives the Interim Assistance Reimbursement requirement through the end of 2023-24 for this program.
- Community Care Expansion Program—The May Revision includes $500 million in both 2021-22 and 2022-23 for the construction, acquisition and/or rehabilitation of adults and seniors in care facilities who are homeless or at risk of becoming homeless, and will further stabilize these facilities with physical upgrades and capital improvements.
Department of Health Care Services: To further the Medi-Cal program's ability to address some of the most complex challenges facing Californians' most vulnerable neighbors, the May Revision builds on the California Advancing and Innovating Medi-Cal (CalAIM) proposal. This proposal recognizes the opportunity to provide for non-clinical interventions focused on a whole-person care approach that targets social determinants of health and reduces health disparities and inequities.
The broader system, program, and payment reforms included in CalAIM allow the state to take a population health, person-centered approach to providing services with the goal of improving outcomes for all Californians. Attaining such goals will have a significant impact on an individual’s health and quality of life and, through iterative system transformation, will ultimately reduce the per-capita costs over time.
The Medi-Cal budget is $115.6 billion ($21.5 billion General Fund) in 2020-21 and $123.8 billion ($27.6 billion General Fund) in 2021-22. The May Revision assumes that caseload will increase by approximately 7.1 percent from 2019-20 to 2020-21 and increase by 6.6 percent from 2020-21 to 2021-22. Medi-Cal is projected to cover approximately 14.5 million Californians in 2021-22, over one-third of the state’s population.
The May Revision proposes:
- Population Health Management Service—The May Revision includes one-time $315 million ($31.5 million General Fund) to provide population health management services that would centralize administrative and clinical data from the Department, health plans, and providers. Access to this information would allow all parties to better identify and stratify member risks and inform quality and value delivery across the continuum of care while implementing CalAIM. The service will also facilitate the connection between important health data and critical social service data for a given beneficiary.
- Medi-Cal Providing Access and Transforming Health Payments (PATH)—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.
- Five-Year Medi-Cal Eligibility Extension for Postpartum Individuals—The American Rescue Plan Act of 2021 allows states to receive a federal funding if they extend Medi-Cal eligibility from 60 days to 12 months for most postpartum individuals, effective April 1, 2022 for up to five years. The May Revision includes $90.5 million ($45.3 million General Fund) in 2021-22 and $362.2 million ($181.1 million General Fund) annually between 2022-23 and 2027-28 to implement the extension.
- Doula Benefit—The May Revision includes $403,000 ($152,000 General Fund) in 2021-22 and approximately $4.4 million ($1.7 million General Fund) annually at full implementation to add doula services as a covered benefit in the Medi-Cal program, effective January 1, 2022.
- Community Health Workers—The May Revision includes $16.3 million ($6.2 million General Fund), increasing to $201 million ($76 million General Fund) by 2026-27, to add community health workers to the class of health workers who are able to provide benefits and services to Medi-Cal beneficiaries, effective January 1, 2022.
- Medically Tailored Meals—The May Revision includes one-time funding of $9.3 million General Fund to continue the provision of medically tailored meals in the period between the conclusion of the existing pilot program in 2021 and when medically tailored meals become available as an option for In-Lieu of Service (ILOS) under CalAIM.
- Audio Only Visits—As part of the Administration’s proposal to extend telehealth flexibilities utilized during the pandemic, while providing assurances of appropriate access to in-person care, DHCS will establish rates for audio-only telehealth that is set as 65 percent of the Medi-Cal rate for the service rendered in fee-for-service, and comparable alternative to prospective payment system (PPS) rates for clinics to maintain an incentive for in-person care. Only providers located in California or border communities and able to provide in-person services to each client served by audio-only telehealth can claim Medi-Cal reimbursement for the service. DHCS will consult with subject matter experts to establish utilization management protocols for all telehealth services prior to implementation of post-pandemic telehealth services.
- Proposition 56 Suspensions—The May Revision proposes to eliminate suspensions for Proposition 56 supplemental payment increases resulting in a cost of approximately $550 million ongoing.
Social Services: The Department of Social Services (DSS) serves, aids, and protects needy and vulnerable children and adults in ways that strengthen and preserve families, encourage personal responsibility, and foster independence. The Department’s major programs include CalWORKs, CalFresh, In-Home Supportive Services (IHSS), Supplemental Security Income/State Supplementary Payment (SSI/SSP), Child Welfare Services, Community Care Licensing, and Disability Determination. Effective July 1, 2021, child care and nutrition programs will transition from the California Department of Education (CDE) to DSS. The May Revision includes $42.2 billion ($14.7 billion General Fund) for DSS programs in 2021-22.
- California Work Opportunity And Responsibility to Kids: The CalWORKs program, California’s version of the federal Temporary Assistance for Needy Families (TANF) program, provides temporary cash assistance to low-income families with children to meet basic needs. It also provides welfare-to-work services so that families may become self-sufficient. Eligibility requirements and benefit levels are established by the state. Counties have flexibility in program design, services, and funding to meet local needs.
- CalWORKs Grant Increase—The May Revision reflects a 5.3-percent increase to CalWORKs Maximum Aid Payment levels, which is estimated to cost $142.9 million in 2021-22. These increased grant costs are funded entirely by the Child Poverty and Family Supplemental Support Subaccounts of the Local Revenue Fund.
- Foster Care Emergency Assistance—The May Revision includes $24.5 million General Fund and federal TANF block grant funds in 2021-22 to provide caregivers with up to four months of emergency assistance payments pending resource family approval and up to twelve months for cases that meet good cause criteria.
- Child Welfare Services-California Automated Response and Engagement System—The May Revision includes $39.4 million General Fund in 2021-22 to continue development of a new technology platform for Child Welfare Services.
- Child and Adolescent Needs and Strengths Assessment Tool Workload—The May Revision includes $3.4 million General Fund ongoing for increased county social worker workload associated the Child and Adolescent Needs and Strengths assessment tool.
- Continuum of Care Reform Reconciliation—The May Revision includes $7.1 million General Fund to reflect Continuum of Care Reform true-up related to county Child and Family Teams actual expenditures for fiscal year 2018-19.
Child Care: The Administration proposes to make the largest expansion of its kind in child care access by adding 100,000 subsidized child care slots. Updated Proposition 64 cannabis tax revenues will provide an additional $83 million for child care slots in 2021-22 and 2021-22 ongoing. These funds will provide for an additional 6,500 new child care slots. Additional investments to strengthen the child care system include:
- Infrastructure Facilities—The May Revision includes $250 million one-time federal American Rescue Plan Act of 2021 (ARPA) funds to provide infrastructure grants for the acquisition, construction, development, and renovation of child care facilities focusing on desert areas to be spent through September 30, 2024.
- Child Care Resource and Referral Programs—The May Revision includes $10 million ARPA funds to support continued Resource and Referral partnerships to strengthen their role serving as intermediaries to develop new child care facilities and capacity, and to streamline and improve data collection processes.
- Quality Improvement—The May Revision includes $20 million for a multi-year effort to strengthen existing quality improvement supports and systems. CDSS will engage with stakeholders to inform policy-setting and program design with a focus on addressing inequities. Quality projects funded by the federal Child Care and Development Fund (CCDF) will transfer to CDSS as part of the child care and development transition without any immediate changes.
Department of Developmental Services: The Department of Developmental Services (DDS) provides individuals with developmental disabilities a variety of services that allow them to live and work independently or in supported environments. California is the only state that provides services to individuals with developmental disabilities as an entitlement. The May Revision includes $10.7 billion ($6.6 billion General Fund) and estimates that approximately 386,753 individuals will receive services by the end of 2021-22.
- Elimination of Suspensions—The May Revision proposes to eliminate suspension of the Provider Supplemental Rate Increase and lift the implementation of the Uniform Holiday Schedule resulting in a cost of $173.7 million General Fund in 2022-23 and $309.6 million ongoing General Fund.
- Performance Incentives Program—The May Revision includes $4 million General Fund in 2021-22 for one-time planning resources to create an outcome-focused regional center operations funding program. Beginning in 2022-23, ongoing costs increase to $61 million General Fund.
- Direct Service Professional Workforce Training and Development—The May Revision includes $2.9 million General Fund in 2021-22 to establish a training and certification program for direct service professionals tied to wage differentials. The program aims to reduce staff wage inequity, stabilize service access, and professionalize and diversify the workforce. Beginning in 2023-24, ongoing costs increase to $51 million General Fund.
- Bilingual Staff Differentials—The May Revision includes $2.2 million General Fund in 2021-22 to create a differential for bilingual service provider staff. Beginning in 2023-24, ongoing costs increase to $6.5 million General Fund.
- Self-Determination Supports—The May Revision includes $6.8 million General Fund to improve consumer onboarding into the Self-Determination Program, to include: participant choice specialists, intensive transition support services, and regional center training. Beginning in 2024-25, ongoing costs decrease to $2.2 million General Fund.
Covered California: The 2019 Budget Act included historic subsidies to help more low and middle class Californians afford health coverage through Covered California. In addition, the state created an individual mandate to obtain comprehensive health care coverage. For 2020-21 and 2021-22, ARPA provides more generous subsidies than the current state subsidy program, effectively eliminating the need for the state subsidies. The May Revision contains the following adjustments to the Covered California budget and individual mandate penalty revenue:
- State Subsidy Program Savings—The May Revision reflects General Fund savings totaling $732.7 million over 2020-21 and 2021-22 combined that result from new federal subsidy levels replacing the state subsidy program.
- Individual Mandate Penalty Revenue—The Franchise Tax Board is currently processing returns for the 2020 tax year, the first year in which the individual mandate penalty is in effect. Based on initial sample data, the May Revision reflects reduced revenue from the individual mandate penalty of about $345 million over 2020-21 and 2021-22 combined.
- Zero-Dollar Premium Plans—Health care consumers pay $1 premiums for health plans due to federal policy concerning abortion coverage. The May Revision proposes to subsidize this cost for Covered California consumers at a General Fund cost of $20 million ongoing.
- Health Care Affordability Reserve Fund—While ARPA provides substantial near-term relief to Californians purchasing health care through Covered California, the future of the enhanced federal assistance is uncertain. To partially backfill the loss of the more generous federal subsidies if they are not extended, or if other state health care affordability investments are explored in the future, the May Revision sets aside $333.4 in a new Health Care Affordability Reserve Fund. The total equals estimated individual mandate penalty revenue in 2020-21 and 2021-22, less the 2021-22 cost of the zero-dollar premium plan proposal described above.
Golden State Stimulus II
Golden State Stimulus II (GSS II) expands the Golden State Stimulus program established through the immediate budget actions taken in February of this year. The stimulus is targeted to low- and moderate-income households; specifically, the GSS II program will provide stimulus payments to three groups:
Low to Middle Income—$600 one-time stimulus payments to all taxpayers filing a 2020 tax year return with adjusted gross income of $75,000 or less who did not already receive a Golden State Stimulus. This component is expected to cost about $5.6 billion and assist about 9.4 million tax filers.
Families—$500 one-time stimulus payments to all taxpayers with adjusted gross income of $75,000 or less with a dependent on the return. This component is expected to cost $2.2 billion and assist 4.3 million tax filers. (Some of these families will receive $1,100 if they also qualify for the low- to middle-income stimulus above).
Undocumented Families—$500 one-time stimulus payments to all ITIN taxpayers with adjusted gross income of $75,000 or less and a dependent. This component is expected to cost $260 million and assist 520,000 tax filers. (These families are eligible for both family credits so will receive $1,000).
California's COVID-19 Rent Relief Program: In January 2021, the COVID-19 Tenant Relief Act, Chapter 2, Statutes of 2021 (SB 91) was signed, creating the California COVID-19 Rent Relief Program. This program provides up to $2.6 billion in federal rental assistance to those facing financial hardships as a result of the pandemic and extends the eviction protections through June 30, 2021. Subsequent to the state's program deployment in March 2021, the federal American Rescue Plan Act of 2021 (ARPA) provided for an additional $2.6 billion to California for both state and local entitlement jurisdictions for a total of $5.2 billion in federal rental relief aid.
The May Revision includes statutory amendments to maximize the use of available federal funds for rental, utilities, and housing-related expenses to help as many Californians as possible stay housed, while bolstering the economic resiliency of those hardest hit by the pandemic.
Additionally, the state continues to utilize $331 million in National Mortgage Settlement funds for mortgage assistance. The state is also preparing to utilize $1 billion from ARPA Homeowner Assistance Funds to the California Housing Finance Agency (CalHFA) to provide additional mortgage assistance, principal reductions, and qualified housing-related charges to provide housing stability.
- To further protect homeowners and renters experiencing unprecedented economic hardships, the 2019 and 2020 Budget Acts appropriated $51 million in grants to community-based organizations that offer eviction and foreclosure counseling, consultation, mediation, training, education, and representation.
Under the authorities of the California Emergency Services Act, the Office of Emergency Services (Cal OES) serves as the state’s leadership hub during all major emergencies and disasters. This includes responding, directing, and coordinating state and federal resources and mutual aid assets across all regions to support the diverse communities across the state.
- Reducing Reliance on Redirected and Temporary Staff for Emergency Response and Recovery—$16.5 million General Fund and 73 positions ongoing to establish a permanent and dedicated Incident Support Team, a deployable Incident Management Assistance Team, and needed support to operate California’s State Operations Center or Regional Emergency Operations Centers to respond to the all-hazard events. These teams will strengthen the capabilities of the State Operations Center and lessen the Department’s reliance on redirected staff from other areas in the organization.
- Long-Term Recovery Support—$37.8 million ($15.7 million General Fund) ongoing to provide permanent funding for 104 permanent recovery positions provided in 2018 with three year limited-term funding, and 110 new positions to better support California’s recovery efforts and recoupment of eligible federal disaster cost reimbursements for state and local governments, and to maximize the hazard mitigation program to mitigate the impacts of future disasters on the state and local jurisdictions.
- LISTOS: Strengthening Equity and Connections with Communities—$29.9 million General Fund ongoing and 13 positions to establish a new Office of Equity and make permanent a Listos grant program to further strengthen connections and build resiliency with all communities. California’s disasters have had a significant impact on communities across the diverse state, but some communities have been hit harder than others.
- California Disaster Assistance Act (CDAA)—$100 million one-time General Fund to increase the amount of funding available through the CDAA, which is used to repair, restore, or replace public real property damaged or destroyed by a disaster or to reimburse local governments for eligible costs associated with emergency activities undertaken in response to a state of emergency proclaimed by the Governor. This augmentation increases total CDAA funding available in 2021-22 to $162.6 million.
- Southern Regional Emergency Operations Center—$26.5 million one-time General Fund to acquire land to establish a new emergency operation center in the Cal OES southern operational region. It also includes $7.7 million to relocate the staff from temporary trailers to a leased space while the construction of the new building occurs. The current space is inadequate and limits the capability of the team in responding to emergencies. The Department needs a permanent location for this staff given the high risk for disasters in the area and the critical need for timely response to local communities.
- Community Hardening to Build Disaster Resilient Communities—$250 million one-time General Fund to develop and implement a new initiative, “Prepare California,” modeled after a successful FEMA program, designed to build disaster-resistant communities through state, local, federal, and private sector and nongovernmental organization partnerships. This proposal would be implemented in a manner that promotes the principles of equity in building statewide resiliency and education to all hazards, including earthquakes, through community hardening programs. This program maximizes the effectiveness of governmental, non-profit, and local community partnerships and seeks to eliminate current barriers for local and tribal governments, including paying up to 100 percent of the local government’s cost share for participating in the federal hazard mitigation program.
- Community Resilience Centers—$150 million one-time General Fund for the Department of Food and Agriculture to support the development and enhancement of community resilience centers. Funding would be available to improve both local fairground and other community facilities to enhance the state’s emergency preparedness capabilities, particularly in response to climate change. Funding could be used to support infrastructure for emergency evacuation, shelter, base camps during emergency events, and critical deferred maintenance.
The May Revision includes $750 million one-time federal American Rescue Plan Act of 2021 (ARPA) funds for the Community Economic Resilience Fund (Fund), which will be established to support regional and local planning and implementation of strategies to adapt to and seize the opportunities that come with a changing economy. Building on the Administration’s Just Transition Roadmap, scheduled to be published in July 2021, the Fund will provide financial support to regional and local stakeholder collaboratives to plan and implement region- and industry-specific economic transition strategies, with a specific focus on supporting high road industries, quality job creation, and workforce strategies in those sectors or regions most affected by the state’s transition to carbon neutrality, such as Kern County.
- Employment Training Panel—$50 million one-time General Fund for the Employment Training Panel (ETP) to support training opportunities for new and incumbent workers and address skills gaps in economically disadvantaged regions.
- High Road Training Partnerships—$90 million for the Workforce Board to fund additional High Road Training Partnership (HRTP) opportunities. This builds upon the $25 million proposed in the Governor’s Budget, totaling $115 million for HRTPs. These training partnerships up-skill the current workforce while creating pathways for new hires and prioritize workers from disadvantaged communities, including justice-involved and disconnected and at-risk older youth. • Construction Apprenticeships—$20 million for the Workforce Board to develop apprenticeships in residential construction. These apprenticeships will be the result of a partnership between the state and local workforce boards, the University of California and California Community Colleges, philanthropic organizations, and the housing industry, and will build upon existing programs to ensure these opportunities can be deployed quickly.
- Proposes $1 billion in one-time American Rescue Plan Act of 2021 funds for the California Student Aid Commission to establish a one-time grant program to support displaced workers seeking reskilling and up-skilling opportunities, educational opportunities, or to support some of the costs to start a business.
Employment Development Department: The pandemic has exposed many of EDD’s antiquated processes and outdated infrastructure, resulting in a delay or inability for many Californians to access UI benefits. This has been especially true for those in hard-to-reach communities, including the seven million non-English speaking Californians. The May Revision includes the following investments to improve EDD’s infrastructure and claimants’ experiences:
- Language Access—$21 million over two years to improve education and outreach in communities requiring multilingual access to EDD services and programs by:
- Dedicating resources to translation services to create a multilingual access portal to EDD’s website and to translate forms and notices.
- Establishing a multilingual access unit and expanding existing interpretive services.
- Providing grants to community-based organizations for outreach and education to Limited English Proficient communities.
- Unemployment Insurance Navigators—$11.4 million in 2021-22 and 2022-23 to support trained staff in the America’s Job Centers of California. These staff will provide in person guidance to individuals filing benefit claims, particularly helping those without the technology or ability to access the EDD’s online resources.
- Direct Deposit—$11 million over two years for the EDD to develop and implement a direct deposit option for Unemployment Insurance, Disability Insurance, and Paid Family Leave claimants. This option will make the disbursement of benefits faster and simpler for claimants, who will avoid the extra process needed to transfer funds between a debit card and bank account.
he May Revision proposes significant investments in both new transportation infrastructure and maintenance of existing infrastructure. Building upon the more than $18 billion in investments proposed in the Governor’s Budget, the May Revision proposes over $11 billion of state investment in the transportation system to lead to an equitable recovery that will competitively position the state to pursue significant federal investment that aligns with the American Jobs Plan and other federal budget priorities. The investments will create quality jobs, accelerate new transportation options and better connectivity throughout the state, support clean transportation projects to achieve our climate goals, and attract new federal investment, often doubling the amount spent from state and local sources.
- Los Angeles Olympics—$1 billion General Fund to deliver critical projects in time for the 2028 Olympic Games.
- Priority Transit and Rail Projects—$1 billion General Fund for transit and rail projects statewide that improve rail and transit connectivity between state and regional/ local services.
- Active Transportation—$500 million General Fund to advance projects that increase the proportion of trips accomplished by walking and biking, increase the safety and mobility of non-motorized users, advance efforts of regional agencies to achieve greenhouse gas reduction goals, enhance public health, and benefit many types of users, especially in disadvantaged communities.
- High Priority Grade Separations and Grade Crossing Improvements—$500 million General Fund to support critical safety improvements throughout the state.
- High-Speed Rail—$4.2 billion Proposition 1A to complete high-speed rail construction in the Central Valley, advance work to launch service between Merced and Bakersfield, advance planning and project design for the entire project, and leverage potential federal funds.
- State Highway Rehabilitation and Local Roads and Bridges—$2 billion ($1.1 billion special funds through 2028, and $968 million federal funds) to support the advancement of priority State Highway Operation and Protection Program (SHOPP) projects, Interregional Transportation Improvement Program (ITIP) projects, and local road and bridge investments.