5.16.2016 On Friday, Governor Brown released his 2016-17 budget revision. Since the January budget was released, state revenue projections have declined. Governor Brown stated that “the surging tide of revenue is turning” and the state’s spending commitments will exceed expected revenues in coming years.
The May Revision reflects a $1.9 billion decrease in tax revenues compared to the January budget. While the May Revision continues to make investments in poverty reduction, it solidly reaffirms the Governor’s commitment to austerity and debt reduction. Governor Brown’s dedication to diverting money to the Rainy Day Fund without further investments in critical programs overlooks the vast economic disparities in our state. The state’s continued growth and prosperity depends on social and economic investments that address the needs of low-income Californians.
Despite the focus on belt tightening, the May Revision commits to new spending in three key areas:
- Implementing a statewide minimum wage increase
- Providing housing for the homeless living with mental illness
- Improving Medi-Cal services, including Health4AllKids
The Governor’s May Revision recognizes that California has the highest rate of poverty in the nation. Nearly 1 in 4 Californians live in poverty, according to the supplemental poverty measure. As such, CFPA applauds the Governor for supporting the statewide minimum wage increase, addressing housing for the chronically homeless, and implementing Medi-Cal expansion for all California children, regardless of immigration status. That said, with more than 8 million Californians in poverty and at least 4 million struggling with food insecurity, more must be done to invest in vital public programs that reach the range of Californians who struggle to make ends meet.
CFPA urges the Legislature to pursue budget revisions that will do more to reduce the number of Californians living in poverty and experiencing food insecurity. To fulfill the Governor’s vision of long-term fiscal stability, the 2016-17 state budget should further address the growing inequities faced by California’s low-income families.
Read the Governor’s May Revise Summary. link
Revised Budget and Nutrition for Low-Income Californians
Minimum Wage Increase: The passage of SB 3, which incrementally raises the statewide minimum wage to $15 per hour, will raise General Fund costs by an estimated $39 million in 2016‑17. The Administration estimates that increasing the minimum wage by fifty cents an hour on January 1, 2017 will reduce CalWORKs grant expenditures by $6 million in the 2016-17 budget. This reduction is likely to grow as the minimum wage increases. The May Revise includes adjustments in state-funded programs impacted by the wage increase.
Addressing Homelessness: The May Revise supports Senate Pro Tem De León’s plan to address homelessness. The proposal includes a $2 billion bond to provide 10,000 units of permanently affordable housing for persons living with mental illness. While the Governor’s Revision did not mention other aspects of the Senate budget package on homelessness, the Senate is expected to push for more during budget negotiations.
Healthcare Expansion: The Governor’s Revision includes $2.2 billion in federal funds for the new Medi‑Cal 2020 waiver, which includes initiatives to improve health care quality. The May Revise includes $188.2 million General Funds (an increase of $45.4 million over the January proposal) due to caseload increase, to provide full-scope Medi-Cal to 185,000 undocumented children to be implemented on May 16, retroactive to May 1st.
CalFresh: The 2016 May Revise includes $2.0 billion ($693.1 million General Fund) for CalFresh administration in 2016-17, which represents a $38.1 million ($22.3 million General Fund) decrease from the Governor’s Budget. The Revision largely represents a current-law, workload adjusted budget for CalFresh and the California Food Assistance Program.
The Revision maintained investments in the CalFresh program from the January proposal to provide five new positions within the CalFresh Branch of the Department of Social Services with the goal of enrolling an additional 400,000 children in CalFresh over the next two years.
The May Revise also included $4.24 million ($1.48 million General Fund) in 2016-17 to address automation changes needed in SAWS to implement the CalFresh ABAWD time limit rules which will come back into effect after the statewide waiver expires December 31, 2017. CFPA strongly supports these investments, as the state should immediately begin making preparations to mitigate the potential loss of participants’food assistance benefits due to the return of the ABAWD time limit provision. link
CalWORKs: The budget proposes a 1.4% grant increase to begin in October 2016. This funding would come from the Child Poverty Sub-account which is dedicated non-General Fund revenue. This increase would provide an additional $10/month for a family of three in high-cost counties and a $9/month elsewhere. The budget makes no proposal regarding the repeal of the Maximum Family Grant rule. The Assembly and Senate- along with a broad coalition of advocates- continue to press for repeal of the discriminatory policy.
SSI/SSP: The May Revision has the same proposal as in January to provide a 2.76 percent cost of living adjustment on January 1, 2017. The estimated increase would raise the SSP portion of the grant from $156 a month to $160 a month. The federal government is also expected to provide a cost of living increase in January 2017, likely in the range of $12-15 a month. Even with the increase, grant levels will continue to leave recipients below the federal poverty level. The Legislature has expressed support for increasing the SSP higher than the Governor’s proposal, but neither house has specified a dollar amount.
School Nutrition: State funding for school nutrition remains a categorical education program funded through Proposition 98. The May Revise eliminates a 0.47 percent cost‑of‑living adjustment that was included in the January budget proposal, to reflect a change in the cost‑of‑living factor from 0.47 percent at the Governor’s Budget to 0.00 percent at the May Revision. The Revision also includes a decrease of $5.7 million Proposition 98 General Fund for categorical programs, based on updated estimates of projected ADA. The May Revise missed an opportunity to invest in the expansion of after-the-bell school breakfast in high-poverty schools. The Assembly is expected to push for a modest investment in grants aimed at incentivizing after-the-bell school breakfast models, based off of CFPA’s breakfast budget proposal. link
Childcare: The Governor’s proposal does not significantly reinvest child care and early childhood education for low-income children. The May Revise incorporates the federal Child Care and Development Block Grant (CCDBG) reauthorization, which provides federal funding for subsidized child care and included new provisions aimed at boosting the quality of subsidized child care.
Drought Relief: While the winter of 2015-16 brought some welcome rain, California is still in the midst of a historic multi-year drought. Drinking water supplies continue to be at risk in some communities. The January Budget provided an additional $212.1 million in one-time General Fund dollars for emergency drought response. The Revision provides an increase of $5 million General Fund for the Department of Water Resources to provide emergency drinking water support for small communities, including addressing private wells (for a total of $10 million). The May Revise also supports lead‑related programs, including childhood lead data mapping and improved monitoring and reporting of drinking water. Additionally, the May Revise provides an increase of $30 million General Fund to the Office of Emergency Services to support local jurisdictions through the California Disaster Assistance Act, which supports recovery from all disasters, including drought.
With support from advocates, the Legislature is expected to push for more funding to improve access to drinking water in impacted communities. link
CFPA urges the State to authorize EBT as a mechanism for delivering interim relief to low-income households living without safe drinking water. link
Enacting the 2016-17 Budget
The Legislature will begin discussing the May Revise and other state budget items this week with the aim of finalizing their budget proposals shortly. All proposed budget items will be discussed during Conference Committee hearings. By midnight on June 15, the budget must be approved by the Legislature. After the Legislature approves the budget, the Governor can sign the budget for immediate enactment or veto individual items. By law, the new budget must be enacted by July 1.
Questions? Contact Tracey at tracey@cfpa.net or 510.433.1122 ext 101.
