California Family Resource Association

Capitol Report: Governor's May Revise for the 2016-17 Budget

On Friday May 13, Governor Jerry Brown released his FY 2016-17 revised budget plan. The May Revision implements several proposals aimed at addressing poverty and improving economic stability, including additional funding for the incremental increase toward an approved $15 an hour minimum wage and support for the Senate’s housing and homelessness package funded through Prop. 63, the Mental Health Services Act (MHSA).

The budget also incorporates additional funding for Medi-Cal and services for people with developmental disabilities from the recently passed Managed Care Organization (MCO) tax, which raises more than $1 billion in revenues. Additionally, the budget includes additional resources to cover all 185,000 estimated undocumented children now eligible for Medi-Cal and extends full Medi-Cal coverage for another year to newly qualified immigrants—new Californians here less than five years.

Unfortunately, the budget still retains the discriminatory Maximum Family Grant (MFG) rule, and fails to provide coverage for the remaining uninsured undocumented immigrants. That said, the MFG repeal champion, Senator Holly Mitchell (D-Los Angeles) is continuing to fight for its repeal through her SB 23 that is currently in the Assembly.

CFRA is pleased that Governor Brown is continuing to look for ways to improve helping strengthen families. The state's top priority needs to be supporting hard working families and ensuring California's most disadvantaged and underserved are given a chance to succeed. CFRA recognizes there is still more work to be done, and will continue to monitor the budget process, and weigh in as needed to ensure the Legislature is addressing the needs of our members and clients throughout the state.

Highlights of the FY 2016-17 Revised Budget Proposal:

  • Provides additional $45.4 million for Health4All Kids initiative ($188.2 million total): These new funds will help to provide health insurance to an additional 15,000 kids (185,000 total) that are estimated to benefit from California’s expansion of full-scope Medi-Cal to undocumented children up to age 19 with family income up to 266% FPL. The state implemented this new expansion May 16.
  • Includes $38.1 million in funding for one-year delay of the Newly Qualified Immigrant Wrap: This funding will allow immigrants here less than five years to remain on full-scope Medi-Cal until January 1, 2018 when they will be transitioned to a Covered California Qualified Health Plan with premium and cost-sharing assistance paid by Medi-Cal.
  • Allocates $1.1 billion in MCO tax financing to pay for Medi-Cal, In-Home Supportive Services (IHSS), and developmental disability services: This additional financing comes from authorization of a tax on enrollment of Medi-Cal managed care plans and commercial health plans approved in February. These funds will be used in part to offset the following key budget proposals.
  • Developmental Services ($287 million): Funds will be used to pay for various developmental services programs, including rate adjustments for community-based providers serving individuals with developmental disabilities.
  • Includes $2.2 billion in federal funding for California’s Medi-Cal 2020 Waiver: These federal funds will help pay for implementation of California’s new Medi-Cal 2020 waiver which includes initiatives to improve healthcare quality including: Public Hospital Redesign and Incentives in Medi-Cal, the Global Payment Program, Whole Person Care Pilots, and the Dental Transformation Initiative.
  • Allocates $5 million in additional funds to implement Federal Medicaid Managed Care regulations: These funds will be used to implement the new Medicaid Managed Care regulations as well as the Medicaid fee-for-service access standards and monitoring. Aspects of the regulations could negatively impact California’s current financing structure for Medi-Cal.
  • Provides an increase of $86.4 million for Behavioral Health Treatment services ($180.2 million): These costs reflect the transitioning of these services to Medi-Cal from the state’s Developmental Services system. Includes a $6.4 million increase for Continuum of Care Reform: These funds will go towards implementation of this initiative including participation in child and family teams, mental health assessments for children in foster care, and training for mental health providers.
  • Provides an increase of $2.2 million for Institutional Deeming: These funds will help to provide transition assistance to approximately 433 children currently enrolled in the Home and Community-Based Services Wavier for Persons with Developmental Disabilities.
Other Health Programs

The May Revision includes support for lead-related programs:

  • Provides $180,000 to the Department of Public Health for the Childhood Lead Poisoning Prevention Fund: These funds will be used to update the IT system used to track lead exposure and contamination throughout the state.
  • Provides $480,000 to the Safe Drinking Water Account at the State Water Resources Control Board: These funds will be used to pay for staff to assist local efforts for water quality testing and improve public water system compliance with federal reporting requirements.
Humans Services Programs
  • Includes a 1.4% increase in CalWORKs grants for 2016-17: The May revision increases CalWORKs funding to provide a 1.4% increase to grants. The January budget proposal included no new funding for CalWORKs.
  • Maintains restoration of 7% across-the-board reduction for In-Home Supportive Services (IHSS) hours: This restoration will use proceeds from the newly enacted MCO tax.
  • Includes no new funding to repeal the Maximum Family Grant (MFG): No new funding to repeal the MFG, a discriminatory provision of CalWORKs that denies assistance to new children in families that received benefits 10 months before the child’s birth. The revision fails to include funding for a repeal, however, state legislators highlighted the repeal of the MFG as a priority for this year.
  • Includes no new funding for the Child Care Program: The May revision includes no new dedicated funding for the Child Care Program.
  • Maintains a 2.76% cost-of-living adjustment (COLA) to the state portion of SSI/SSP for seniors and persons with disabilities: Leaves intact the January proposal for individuals to receive an additional $17 per month, and couples an additional $31 per month in SSI/SSP grants. (This amount includes both the federal COLA and state increase.) This proposal marks the first state COLA increase in SSI since 2006.
Public Safety
  • Allocates an increase in funds from the Proposition 47 state savings to the California Victim Compensation Fund and to the Safe Neighborhoods and Schools fund: The California Victim Compensation Fund to support Trauma Recovery Centers will now be funded an additional $1 million, with a new total of $3.9 million. The Safe Neighborhoods and Schools fund to reduce truancy and drop-out rates in K-12 schools will now be funded an additional $2.5 million, with a new total of $29.3 million.
  • Includes $2.8 billion to fund inmate health care, dental care, and mental health services and programs: Specifically allocates $1.9 billion for prison medical care, $26.8 million for pharmaceutical costs, and $2 million to increase health care staff in state contract facilities.
Poverty Reduction Measures
  • Implements minimum wage increase to $10.50 per hour: This April, the Governor signed one of the most ambitious minimum wage increases in the country, which sets a gradual wage increase to $15 per hour by 2023. The budget proposal is on track for the 2023 goal by raising the minimum wage to $10.50 per hour for eligible state workers effective January 1, 2017.
  • Includes $2 million to support additional outreach for the refundable state Earned Income Tax Credit (EITC): The Governor’s January budget estimated $380 million for the second year of the refundable state EITC for low-income families. California families with incomes between $6,000 and $13,000 qualify for this tax credit. April tax filings indicated that while over 350,000 households claimed the credit, more than 68,000 eligible taxpayers have not. This budget includes additional funds to reach more Californians who are eligible.
  • Incorporates the Senate’s $2 billion proposal to develop and administer homelessness and affordable housing programs, specifically for addressing chronic homelessness and mental health. The proposal would be funded through revenues from Proposition 63 and requires a 2/3 vote of the legislature.
  • Increases K-14 Education Funding: The Proposition 98 guarantee remains $71.9 million for FY 2016-2017. For the May Revision, reduced revenue estimates this past year will result in a reduced amount going toward backfilling previous years
  • Per-Pupil Spending Increases: The state is projected to spend $14,550 per student.
  • Additional One-Time Discretionary Spending: A proposed additional $134.8 million in one-time discretionary funding to schools for the implementation of the state-adopted academic standards, professional development and support for teachers, purchase new instructional materials, and other infrastructure investments.

For more information, visit the Governor's budget website.