On January 8, Governor Newsom introduced his initial 2021-22 State Budget proposal. The proposed budget uses higher than anticipated revenue to make responsible investments to respond to the twin COVID-19 public health and economic crises. While the Governor’s plan includes additional funding for food and nutrition programs, it falls well short of what is needed to address the starkly elevated rates of food insecurity driven by the pandemic.
Budget Overview
Low- and moderate-income Californians continue to bear the brunt of the economic impacts of COVID-19, particularly Black and Latinx individuals and families. Job losses continue to mount, most severely in low-wage sectors. The Governor’s budget assumes that the one-time revenue windfall in 2021-22 will dissipate in future years, making the state’s fiscal outlook dim in out years. Further complicating the state budget picture is the uncertainty surrounding current and future federal fiscal relief. The federal COVID-19 relief bill passed in December includes funding for COVID-19 testing, vaccine distribution, schools, child care, and other emergency needs. The state is working now to determine what level of flexibility is attached to those funds and how best to allocate them to meet the needs of Californians. It is also unclear at this time whether additional federal aid is on the horizon once the new administration takes over and the new Congress sets its immediate legislative priorities.
Overall, the Governor’s budget funds emergency measures to aid in COVID-19 relief and recovery, but fails to make urgent and ongoing investments needed to ensure low-income Californians have the resources to meet their basic needs, including food.
Food and Nutrition
Below is an overview of major funding proposals relevant to food and nutrition.
Emergency Food
The budget includes $30 million one-time funding above program base funding for Emergency Food Assistance Providers, food banks, tribes, and tribal organizations.
California Food Assistance Program (CFAP)
The budget provides $11.4 mil in additional funding for CFAP for anticipated ongoing Emergency Allotments that bring all households to the maximum benefit. However, the proposed budget does not include additional benefits to reflect the recent 15% increase in the maximum benefit that Congress passed in the December relief bill. Nourish California and our partners have already reached out to CDSS to ensure they are aware that additional funding will be needed to ensure parity between CFAP and CalFresh benefit levels going forward.
Supplemental Nutrition Benefits (SNB) & Transitional Nutrition Benefits (TNB)
As anticipated, the budget includes $22.4 ongoing General Fund for the SNB/TNB programs. We appreciate the administration prioritizing the mitigation of benefit loss among households with SSI members who became newly CalFresh-eligible upon the end of the Cash-Out policy.
Nutrition for Older Adults
The 2020-21 budget included $17.5 million General Fund for the Older Americans Act Senior Nutrition Program that was set to suspend on 12/31/21. The proposed budget extends the suspension date of this funding to 12/31/22. Given the tremendous increase in food insecurity among low-income older adults, Nourish California and older adult nutrition stakeholders are calling on state leaders to further increase funding for the Senior Nutrition Program.
CalFresh
The budget notes that CalFresh benefits have been increased through the federally-authorized Emergency Allotments and the 15% increase to the maximum benefit, effective January — June 30, 2021.
Additionally, the budget outlines the administrative funding allocated to implement CalFresh policy changes enacted in the 2020-21 Budget Act. Those include new Medi-Cal/CalFresh dual enrollment processes and pre-populated reporting and renewal forms.
It also outlines the anticipated budget savings from last December’s administrative action to extend and expand the Elderly Simplified Application Project (ESAP). Nourish California, CA Association of Food Banks, SF-Marin Food Bank, and AARP-CA are proud to cosponsor SB 107 (Wiener) this year which will further simplify CalFresh access, especially for older adults and people with disabilities. We are requesting a one-time budget allocation of $1 million to simplify and shorten the CalFresh application for households eligible to participate in the ESAP project noted above. If you would like to support this budget advocacy and the accompanying bill, SB 107 (Wiener), as it advances through the legislature, visit our Action Center and sign up to receive updates and timely calls to action.
CalFresh Pilot Projects
The budget outlines funding for two innovative pilot projects that will provide supplemental CalFresh benefits to certain households.
The California Fruit & Vegetable EBT Pilot Project is allocated $6.3 million General Fund in 2021-22. The project will test modifications to the state’s EBT system to disburse, track, and redeem supplemental benefits to CalFresh participants upon their purchase of California-grown fresh fruits and vegetables at participating retailers.
The Safe Drinking Water EBT Pilot Project is allocated $ 4 million General Fund in 2021-22. The project will provide supplemental benefits to current CalFresh participants served by public water systems that fail to meet safe drinking water standards.
CSU and Community Colleges
The budget allocates $100 million in one-time funding to support student basic needs in Community Colleges, including housing and food.
The budget provides $15 million to the CSU system to address basic needs such as hunger, homelessness, and financial insecurity.
Broader Safety Net and Income Support Proposals
Below is an overview of additional proposals in the Governor’s budget relevant to the health and well-being of low-income Californians.
Golden State Stimulus Plan
The Governor’s budget includes $2.4 billion to fund the “Golden State Stimulus” Plan. The plan provides $600 stimulus payments to recipients of the state’s Earned Income Tax Credit in 2019, including those filing with Individual Taxpayer Identification Numbers (ITIN) this year who meet the eligibility criteria.
Nourish California and our partners at the CalEITC Coalition applaud this bold and urgent proposal, which lays out a path toward economic recovery and financial stability for working families. These much-needed stimulus payments will help ensure that our most disproportionately impacted communities will have the financial resources to afford basic necessities. The state should go further by ensuring that SSI recipients can also benefit from the plan.
Rainy Day Fund
The proposed budget includes $22 billion to rebuild the state’s fiscal reserve after the enacted 2020-21 budget drew down significant reserve funding. The $22 billion includes $450 million to maintain the Safety Net Reserve.
COVID-19 Testing and Vaccination
Over $820 million General Fund to continue COVID-19 testing, tracking and prevention, and $300 million for vaccine distribution. Both items are partially or fully offset by past or anticipated federal funding.
SSI/SSP
The Governor proposes maintaining the state-funded portion of the grants (SSP) at the current levels into 2022. This despite the fact they the SSP was cut to the minimum prior to the last recession, never restored, and do not reflect the high cost of living in California. Recognizing they are woefully inadequate, the recently released Master Plan for Aging stated that SSI/SSP grants have “not kept up with poverty levels,” and recommended they be increased to meet Elder Economic Index and Federal Poverty Level. The federal government is expected to increase the SSI portion of these grants in 2022 by $17 per month for individuals (to $971.72) and by $26 per month for couples (to $1,624.14). In addition to meeting the goals outlined in the Master Plan for Aging, the state should provide emergency financial relief to SSI/SSP households, consistent with the payments proposed in the Golden State Stimulus Plan.
K-12 Schools
The Governor’s budget includes the largest allocation of Proposition 98 funding ever, reflecting the higher than anticipated revenue this year. It assumes a 2021-22 Prop. 98 funding level of $85.8 billion for K-14 education, $14.9 billion above the funding level in the enacted 2021-21 budget.
The budget also includes significant one-time funding to respond to pandemic-related complications. This includes $2 billion in Re-opening Grants available to schools that meet a specified set of requirements.
The budget increases funding for the Local Control Funding Formula (LCFF) by $2 billion. The LCFF provides Supplemental and Concentration Grant Funding for schools with a higher percentage of English learners (EL), students that meet income requirements to receive a free or reduced-price meal (FRPM), foster youth, or any combination of those factors.
Absent from the K-12 proposals is a a plan to allocate the anticipated $6.8 billion in federal funds from the COVID-19 relief package that Congress passed in December. Nourish California and our anti-hunger partners are calling on state leaders to dedicate a portion of federal relief funding to support school nutrition programs, continue to guarantee free meal service over the summer months, and incentivize schools to adopt universally-free meal service beyond the expiration of federal waivers.
Child Care
The proposed budget provides a small amount of funding to support child care providers and families, but no specific investments in child care nutrition. It provides $55 million one-time General Fund for child care providers and families who are struggling due to the COVID-19 crisis, though no additional details are available.
The budget also shifts $31.7 million and 185.7 staff positions from the California Department of Education to the Department of Social Services as part of the planned migration of child care programs that was part of the 2020-21 budget agreement. Administration of and funding for child care programs, including the Child and Adult Care Food Program (CACFP), will also shift to the Department of Social Services on July 1, 2021.
As with K-12 school funding, the budget does not include a plan to allocate federal funds from the COVID-19 relief package that Congress passed in December. California’s expected share of the child care funding package is $1 billion. Nourish California and our anti-hunger partners recommend that a portion of that funding be specifically allocated to support child care meal service as part of COVID-19 relief and ongoing efforts to help stabilize the state’s child care infrastructure. We look forward to working with state lawmakers ensure the final budget package includes vital investments in nutrition for our youngest learners.
Health Care
The proposed budget fails to expand state-funded Medi-Cal to undocumented older adults. We are extremely disappointed that the Governor’s budget fails to provide vital health care services to this most vulnerable population in the midst of a pandemic that is disproportionately harming older adults. We look forward to working with our partners at the California Immigrant Policy Center and Health for All coalition to raise this pressing priority to state lawmakers for inclusion in the final 2021-22 budget.
The budget revives the Medi-Cal reform program, CalAIM, which seeks to ambitiously reconfigure the state’s Medicaid waiver package to take a more person-centered approach to providing health services. The program was delayed in the final 2020-21 state budget. This year’s proposed budget assumes an implementation date of January 1, 2022.
Through CalAIM, Medi-Cal funding could be used to support “in lieu of services” programs, including Medically Tailored or Supportive Meals for those experiencing chronic diet-related disease.
Homelessness and Housing
The Governor’s budget proposes significant one-time funding to support emergency housing and homelessness prevention programs. The funding would be administered by three separate departments.
Department of Housing and Community Development: $750 million one-time General Fund (with $250 million available through early action before June) to continue property acquisitions through the Homekey program. Funds would provide competitive grants for local jurisdictions to acquire and rehabilitate hotels, motels, and other buildings and to convert them into interim or permanent housing for individuals experiencing homelessness.
Department of Health Care Services: $750 million one-time General Fund, available over three years, to support the acquisition and rehabilitation of properties for behavioral health treatment facilities, including community-based residential facilities.
Department of Social Services: $250 million one-time General Fund for the acquisition or rehabilitation of Adult Residential Facilities (ARF) and Residential Care Facilities for the Elderly (RCFE), specifically to secure housing for low-income seniors.
The budget includes an immediate action to extend the state eviction moratorium beyond its current expiration date of January 31, 2021. The Governor notes that the federal COVID-19 relief bill enacted in December makes approximately $2.6 billion available to the state for rent and utility expenses for low-income renters.
What’s Next?
The Legislature has already begun holding hearings to discuss the Governor’s January budget and begin the process of crafting the Budget Act of 2021. Negotiations between the Administration and Legislature will begin in earnest following the Governor’s May Revision of his budget. The Legislature’s has until June 15 to pass the budget bill and the Governor’s has a July 1 deadline to sign and enact the final budget.
Vital nutrition priorities will need broad and vocal support to advance during a challenging budget year. You can stay up to date on our budget advocacy and receive timely calls to action by visiting our Action Center. Make your voice heard to help ensure that all Californians have the food they need to thrive.
Questions?
Contact Jared Call at 323.401.4972
