On March 3, Governor Newsom's office announced that he would deliver his 2021 "State of the State" speech on Tuesday, March 9, at 6:00 p.m., breaking from convention in a vritual presentation to the California Legislature from Los Angeles County, instead of in the state Assembly chambers and speaking in the evening. The speech will be livestreamed on @CAgovernor Twitter page, California Governor Facebook page and California Governor YouTube page.
Governor Signs $7.6 Billion COVID-19 Relief Package
On February 23, following approval by both houses of the Legislature, the Governor signed legislation implementing the state's COVID-19 relief budget package. The items included in the prior week’s agreement between legislative leadership and the Governor built off of the Governor’s January budget proposals for early budget actions and one-time state spending to address the impacts of COVID-19. Overall, the package totals $9.6 billion with the core two pieces providing relief payments to lower-income Californians and grants for small businesses that have been negatively impacted by the pandemic and economic recession.
The individual relief payments provide $600 to individuals that have been most impacted by the economic recession and are estimated to cost $3.7 billion. This includes households receiving the Earned Income Tax Credit in 2020, taxpayers with Individual Tax Identification Numbers who were not eligible for the federal stimulus payments, CalWORKs households, and recipients of SSI/SSP and Cash Assistance Program for Immigrants. For the payments to CalWORKs households, counties will play a role in distributing this funding to families.
For small businesses, the agreement provides $2.075 billion in grants. Businesses with annual gross revenue up to $2.5 million that have been impacted by COVID-19 are eligible to apply for grants of up to $25,000. Of those funds, $50 million is set aside for nonprofit cultural institutions with decreased revenues, such as museums, parks, and performing arts companies. Additional business relief provisions exclude Paycheck Protection Plan loans from taxable income and provide relief from state licensing fees for restaurants, bars, and barbering and cosmetology businesses.
The early budget package also includes several other pieces of relief that are significant for counties:
- The agreement allocates $400 million in federal funds for child care. This funding will be used to provide a $525 stipend per child for child care and preschool providers that are state-subsidized and will increase access to subsidized child care for 8,000 children of essential workers.
- Funding is provided to support the enrollment of college students who are newly eligible for CalFresh. These resources include $6 million for outreach and application assistance and $12 million for county administration. Counties need this funding to effectively respond to the increased administrative workload that will result from the expansion of CalFresh eligibility.
- In October, several reductions occurred as part of the federal trigger agreement in the current year budget, where cuts automatically went through when sufficient federal relief was not provided in time. One of those cuts was funding for Local Child Support Agencies, and this agreement would restore that reduction.
- AB 101 (Committee on Budget, 2019) appropriated $500 million over a four-year period for the California Housing Finance Agency to finance low and moderate-income housing. This budget agreement restores $50 million for moderate-income housing that had been rescinded in October when additional federal coronavirus relief was not allocated to California.
- The agreement provides $24 million for the existing Housing for the Harvest program, which provides shelter and support for farmworkers who need to quarantine because of COVID-19.
Governor and Legislative Leaders Announce $6.6 Billion Package to Reopen Schools
On March 1, Governor Newsom revealed an agreement agreement on a $6.6 billion budget package to accelerate the safe return to in-person instruction across California and empower schools to immediately expand academic, mental health and social-emotional supports, including over the summer. $2 billion would fund safety measures to support in-person instruction, such as personal protective equipment, ventilation upgrades and COVID-19 testing. $4.6 billion would fund expanded learning opportunities, such as summer school, tutoring and mental health services. The United Teachers Los Angeles, the state's largest teachers union, criticized the school reopening plan, calling it "a recipe for propagating structural racism." Despite the criticism, the legislature passed the measure on bipartisan votes of 36-0 in the Senate and 72-4 in the Assembly. The Governor is expected to sign it on Friday, March 5.
Both Houses Discuss Behavioral Health Budget Proposals
Senate Budget and Fiscal Review Subcommittee No. 3 and Assembly Budget Subcommittee No. 1 both held budget hearings to discuss behavioral health issues, including the proposal for $750 million for behavioral health infrastructure and the proposal for $400 million for student mental health in the last week.
The Assembly’s hearing provided quite a bit of background on the behavioral health needs in California, including the increased needs related to the pandemic. The background laid the groundwork for making the case that the state needs to invest additional resources into behavioral health infrastructure. Department of Health Care Services (DHCS) Director Will Lightbourne acknowledged that the increased behavioral health needs are coming on top of existing inadequate behavioral health infrastructure.
The Administration is proposing to provide $750 million (one-time funding available for three years) for behavioral health infrastructure. Under the Governor’s proposal, counties would be able to use grant funds on a variety of community behavioral health facility types, including: (1) short-term treatment beds such as those found in crisis stabilization units, (2) residential treatment facilities that typically last for a few months, or (3) longer-term facilities such as permanent supportive housing for individuals with behavioral health needs. Funding from this proposal could be used for both mental health and substance use disorder treatment facilities. Additionally, counties would be required to provide a 25 percent match as a condition of receiving grant funding. This match could take a variety of forms, including in-kind contributions (such as land), philanthropic donations, and other funding sources of the county’s choosing (such as county funds). In addition, in order to receive funds, counties would have to identify an ongoing funding amount to support costs related to operating potential facilities and commit to operating potential facilities for a period of 30 years. The proposal has received widespread support.
Both committees also discussed the Administration’s proposal to provide $400 million one-time funding (half of which is General Fund) over three years to DHCS to implement an incentive program through Medi-Cal managed care to build infrastructure for establishing partnerships with schools and county behavioral health. The Senate asked several questions about the proposal. Recall that the LAO has raised concerns about the lack of detail regarding the proposal.
Additionally, the Senate budget subcommittee took up the Department of State Hospital’s proposal to establish what they are calling a demonstration project (but, in reality, is a proposed realignment) in which three counties would opt-in to assume responsibility for the felony Incompetent to Stand Trial (IST) at the local level. While one-time and ongoing state funding is proposed to accompany the programmatic shift, there are significant questions regarding the sufficiency of that funding and whether appropriate incentives and protections exist. The LAO has taken a skeptical view of this budget proposal and has recommended that the Legislature reject it.
2021 State Legislation of Interest
We are currently in the early stages of the policy making process given that the Legislature just kicked off the first year of its two-year 2021-22 legislative session. However, the legislative process remains constrained by COVID-related limitations. Senate Democrats adopted rules for the 2021-22 session that will allow the Senate to adopt limits on the number of speakers who can debate a measure, amendment or motion and limit the time allotted to each speaker beginning five days before major legislative deadlines. Although it is expected that – like last year – fewer bills than normal will ultimately advance, legislators collectively introduced more than 2,300 bills prior to the February 19 deadline.
Attached are the priority bills of interest to Urban Counties of California (UCC), County Health Executives Association of California (CHEAC), and Contra Costa County.
Attachment A: UCC Bills
Attachment B: CHEAC Bills
Attachment C: Contra Costa Master File of Bills of Interest |