Despite a few items being deferred until later this summer, the Legislature and Administration announced on June 26 a finalized 2022-23 state budget agreement, memorialized in a Budget Bill, Jr. (AB 178/SB 178), which amended the main 2022-23 budget bill (SB 154, the Legislature’s agreement approved on June 13) to reflect the final, three-way $300 billion agreement with the Governor.
The budget agreement sets aside resources for – but does not offer language outlining the specifics on – several fairly consequential issues: drought, wildfire, water, and energy. More action on those items is expected to take place when the Legislature returns from its summer break in August. Additionally, the budget agreement also concluded the budget negotiations between the Governor and the Legislature with respect to "inflationary relief." (See below.)
Both full budget committees (Assembly agenda/analyses and summary | Senate agenda and summary) met to consider AB 178/SB 178 and the 25+ trailer bills. The Legislature voted to approve the budget agreement on June 29. The Governor signed the budget and trailer bills on June 30. To view the list, see this link: 2022-23 June Budget Package: As of June 27, 2022
CSAC's summary of the 2022-23 State Budget is available here. UCC's summary of the budget is available here.
The agreement includes a number of high-profile items such as:
- $9.5 billion in direct refunds to tax filers with incomes up to $250,000 for single filers and $500,000 for joint filers. (See below for details.)
- $47 billion for infrastructure over four years, including:
- $14.8 billion for transportation, plus creation of an Inspector General for high-speed rail
- $2 billion for affordable housing, plus $2 billion for student housing
- $550 million for broadband
- $150 million for libraries
- An increase of 15 percent for TK-12 school funding.
- An increase of 21 percent to CalWORKs grant levels.
- $1.3 billion in retention stipends for health care workers.
- $250 million for small businesses and nonprofits to fund supplemental paid sick leave relief grants.
- $135 million over 3 years to recruit, train, hire, and advance California’s health and human service sectors through regional grants that can include workforce boards, among others.
Among the items of particular importance to counties is language in the energy trailer bill (AB 205) that bypasses the local permitting process and allows energy projects to be exempted from the California Coastal Act. Contra Costa County sent in a Floor Alert opposing this language. However, the language remained intact.
CSAC remains opposed to the Administration’s Felony Incompetent to Stand Trial solutions package contained in SB 184 due to concerns about the growth cap and subsequent penalties against counties, though counties are grateful for the strong investments to build out community treatment and capacity.
Details on Budget's Fiscal Relief Package
As the final piece of budget negotiations, the Governor and legislative leaders announced a $17 billion fiscal relief package for individuals, small businesses, and nonprofits, as follows: (Note that the $17 billion total amount includes $2 billion in current year General Fund costs for rental assistance.)
Direct Refunds to Californians: $9.5 billion
The budget provides $9.5 billion to provide direct tax refunds to 17.5 million California tax filers, as follows:
First Tier
14.2 million tax filers with incomes up to $75,000/$150,000 (Single Filers / Joint Filers): $350 per tax filer, plus an additional $350 if tax filer has at least one dependent
Second Tier
2.1 million tax filers with incomes above First Tier, but below $125,000/$250,000 (Single Filers / Joint Filers): $250 per tax filer, plus an additional $250 if tax filer has at least one dependent
Third Tier
1.1 million tax filers with incomes above Second Tier, but below $250,000/$500,000 (Single Filers / Joint Filers): $200 per tax filer, plus an additional $200 if tax filer has at least one dependent
Roughly 500,000 tax filers with incomes above the Third Tier will not receive a rebate.
Additional Assistance for Vulnerable Californians
The budget agreement also provides additional relief to those enrolled in the SSI/SPP program and the CalWORKs program and to provide relief from unpaid utility bills, specifically:
- SSI/SSP: Accelerates half of the planned grant increase for January 1, 2024 to January 1, 2023. This will increase grants by about $39 per month ($470 for the year) for individuals and $100 per month ($1,200 for the year) for couples.
- CalWORKs: Increases CalWORKs grants for two years by an additional 10 percent in addition to the 11 percent ongoing increase included in the May Revision.
- Utility Assistance: Provides $1.4 billion for assistance to active utility customers with past due electricity utility bills incurred during the COVID19 pandemic bill relief period.
Targeted Tax Relief
Additional targeted tax relief includes the following:
- Workers Tax Fairness Credit. Develops the Workers Tax Fairness Credit to turn union dues from being tax deduction into a tax credit. While union dues are currently tax deductible, union workers are more likely to not itemize their deductions and therefore do not get the same tax benefit for their dues that higher paid professions are more likely to get for their professional association dues. The credit will be established in statute in a trailer bill later in the session but the credit will not be in effect until activated through future budget action.
- Young Child Tax Credit. Adopts the Governor’s proposed $95 million to provide the existing Young Child Tax Credit to zero-income filers and to create a Foster Youth Tax Credit to provide a $1,000 credit to young adults who were in the foster care system.
Business and Non-Profits Relief
Fiscal relief totaling $2.3 billion for small businesses and non-profits is as follows:
- Unemployment Insurance Cost Relief: $1.5 billion for Unemployment Insurance cost relief, including $1 billion to begin to pay down the federal loan, and $500 million, as early as the 2024-25 budget year, to provide rebates to small businesses to reimburse them for their increased costs.
- Diesel Sales Tax Relief: $439 million to suspend the General Fund portion of the sales tax on diesel fuel, reducing costs by about 23 cents per gallon, which primarily benefits businesses.
- Paid Sick Leave Relief: $250 million for relief grants for small businesses and non-profits with up to 150 employees to offset costs of recently enacted Supplemental Paid Sick Leave program (SB 114).
- Small Agriculture Drought Relief Grants: $75 million for the California Small Agricultural Business Drought Relief Grant Program at the Governor’s Office of Business and Economic Development (Go-Biz), to provide direct assistance to eligible agriculture-related businesses that have been affected by severe drought conditions.
- Health Care Worker Retention Stipends: $1.3 billion to provide retention stipends to health care workers most impacted during the pandemic.
Outstanding Issues
Attached are details on the $2.4 billion in categorical investments (General Fund, unless otherwise noted) set aside for various climate and energy related priorities where additional legislative action is needed.
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Community Assistance, Recovery, and Empowerment (CARE) Act Update:
Contra Costa County and CSAC have continuously shared concerns regarding the CARE Courts policy bill, SB 1338. While there is a placeholder for potential funding in the CARE Act, CSAC staff have advised both budget committees that the new duties and responsibilities outlined in the bill may cost hundreds of millions of dollars. CSAC has been advocating for funding that is additive, adequate, and on-going to prevent the diversion of existing resources and programs from current clients.
Unfortunately, there has been limited progress thus far on bill amendments to address the costs to counties, a requested phased-in implementation approach, and proposed sanctions--penalties for those who truly fail. In addition, the issue of housing, a critical component for the success of CARE Courts, has not been fully addressed to the satisfaction of counties. CSAC has advocated that the $1.5 billion in Bridge Housing funding be allocated to counites on a flexible, non-competitive basis, and that these funds be disbursed to participating counties as soon as possible.
Assembly Health Committee passed the measure 14-0; Assembly Appropriations Committee will hear it on August 3, 2022 at 9:00 a.m..
AB 988 (Bauer-Kahan): Mental health: 988 crisis hotline (Contra Costa County's co-sponsored bill)
AB 988, which would enact the Miles Hall Lifeline and Suicide Prevention Act, was amended on June 16. The bill is set for hearing on August 1 in the Senate Appropriations Committee, after passing out of the Senate Committee on Health (10-0). The Digest for the bill indicates: "This bill establishes the Miles Hall Lifeline Act (Act) to establish a 988 Crisis Hotline Center for the purpose of connecting individuals experiencing a mental health crisis with suicide prevention and mental health services, as specified. Additionally, the bill establishes a 988 surcharge for the 2023 and 2024 calendar years at $0.08 per access line per month, and for years beginning January 1, 2025 at an amount based on a specified formula, but not greater than $0.30 per access line per month. Furthermore, the bill requires the Office of Emergency Services (OES) to ensure that designated 988 centers utilize technology that allows for transfers between 988 centers as well as between 988 centers and 911 public safety answering points. Finally, the bill requires the California Health and Human Services Agency (CalHHS) to designate a 988 center to provide crisis intervention services and crisis care coordination to individuals accessing 988."
An overview of the bill from the County Behavioral Health Directors Association is included as Attachment B.
AB 2374 (Bauer-Kahan) Crimes Against Public Health and Safety: Dumping (Contra Costa County Sponsored)
AB 2374 is a measure aimed at the problem of illegal dumping of commercial quantities of waste. The bill increases maximum fines; requires the court to order a person convicted of dumping commercial quantities of waste to remove or pay for the removal of the waste; requires the court to notify the entity issuing professional or business licenses held by the convicted person and requires those entities to post information about the convictions on their website; and requires the court to consider the defendant's abiity to pay. The bill passed out of Senate Public Safety on June 14, Senate Appropriations on June 27, and now on the Senate Third Reading File.
SB 443 (Hertzberg) – Emergency medical services (EMS): prehospital EMS
SB 443 was gutted and amended on June 16 to make sweeping changes to the emergency medical services system. Assembly Health Committee was scheduled to hear the bill with its new content on June 28, but the measure was pulled from the agenda. Because the bill did not receive a hearing prior to the policy committee deadline of July 1, the measure is effectively dead for the year. However, it is likely the sponsor – California Fire Chiefs Association – will revisit this issue in 2023. Contra Costa County had an "Oppose" position on the bill.
AB 2724 (Arambula) – Kaiser Medi-Cal Contract – SIGNED BY GOVERNOR
AB 2724 passed off the Senate and Assembly Floors on the evening of June 29. Since the Administration acted as a sponsor of the bill, the Governor quickly signed the bill. This measure would implement the direct Medi-Cal contract between the Department of Health Care Services and Kaiser Permanente.
AB 32 (Aguiar-Curry) – Telehealth
Senate Health Committee heard AB 32, by Assembly Member Aguiar-Curry, on June 30. The measure is intended to comprehensively address California’s telehealth policies for Medi-Cal and commercial insurance. The measure is being sponsored by the California Association of Public Hospitals and Health Systems, the CommunityHealth+ Advocates (which is affiliated with the California Primary Care Association), Essential Access Health, and Planned Parenthood Affiliates of California. Contra Costa County has a "Support" position on the bill.
AB 32, as amended on June 20, does the following:
- Expands the definition of synchronous interaction for purposes of telehealth to include audio-video, audio only, such as telephone, and other virtual communication.
- Extends telehealth payment parity to Medi-Cal managed care and allows remote eligibility determinations, enrollment, and recertification for Medi-Cal and specified Medi-Cal programs.
- Requires the Department of Health Care Services to conduct an evaluation of the benefits of telehealth.
- Makes other policy changes related to telehealth reimbursement and policy for federally qualified health centers, rural health centers, other Medi-Cal enrolled clinics, Drug Medi-Cal and other providers.
- Allows for telehealth as part of a Medi-Cal managed care alternative access request with respect to time and distance standards. Extends the sunset on time and distance standards to January 1, 2026.
More amendments to AB 32 are anticipated to address potential clean up to the Administration’s telehealth language in the health omnibus trailer bill (see SB 184). The bill is set for hearing in Senate Appropriations Committee on August 1, 2022.
SB 1416 (Eggman) – Mental Health Services: Gravely Disabled Persons
SB 1416 would expand the definition of “gravely disabled” in the Lanterman-Petris-Short (LPS) Act for individuals with a mental health disorder to include the inability of an individual to provide for their basic personal needs for medical care in addition to being unable to provide for their basic personal needs for food, clothing, and shelter. The bill was double referred to Assembly Health Committee, which passed the measure, and Assembly Judiciary Committee. Assembly Judiciary Committee did not hear the measure before the deadline for policy bills to be heard in the second house, so it will not be advancing this year.
AB 1608 (Gipson) – Deconsolidation of Coroner and Sheriff Functions
AB 1608, by Assembly Member Mike Gipson, passed the Senate Governance and Finance Committee with a commitment by the author to amend the bill to clarify the timing of its implementation. Sponsored by various civil rights and justice reform groups along with several organizations representing physicians, the bill’s stated intent is to eliminate any possible bias for autopsies associated with law enforcement-involved deaths. This bill, however, takes a very broad approach by eliminating counties’ ability to consolidate the coroner-sheriff function, an organizational structure currently employed in 48 counties including Contra Costa County. The bill passed out of the Senate Public Safety and is currently on the Senate Third Reading File.
Amendments now in print clarify that the governance change will go into effect once the term of newly elected sheriffs (those taking office in January 2023) ends. With the incorporation of these changes, the bill now is keyed fiscal meaning that it will be referred to the Senate Appropriations Committee for an August hearing.
AB 1972 (Ward) – Grand Juror Pay Increase
AB 1972, by Assembly Member Chris Ward, would – among other provisions – increase the daily rate paid to grand jurors from $15 per day to 70 percent of individual counties’ median income. The stated objective of the rate increase is to recruit a more diverse set of grand jurors; counties are solely responsible for grand jury costs. The bill applies to civil and criminal grand juries.
The statewide county associations – CSAC, UCC, and RCRC – are jointly opposed to the measure because of the considerable fiscal impact. Although AB 1972 is non-specific as to the process for determining individual counties’ median income, one source (U.S. Department of Commerce, Bureau of Economic Analysis) suggests that AB 1972 would increase the current rate anywhere from 620 percent ($108/day) at the low end to 2,513 percent ($392/day) in the highest cost-of-living regions of our state. Our collective research also indicates that civil grand jurors meet frequently – often at least once if not multiple times per week, a factor that drives the overall cost impact considerably higher than the Legislature’s assessment has reflected.
Despite broad county opposition, the Senate Judiciary Committee approved the measure. The county coalition will continue to press for resolution of the cost impacts in advance of the August hearing in the Senate Appropriations Committee.
SCA 10 (Atkins and Rendon) - Right to Abortion and Contraception
The Legislature approved Senate Constitutional Amendment 10, a measure that would, upon voter approval, enshrine the right to abortion and contraception in the state Constitution. The measure is authored by Senate President pro Tempore Toni Atkins and Assembly Speaker Anthony Rendon. Specifically, SCA 10 adds to the state Constitution:
"The state shall not deny or interfere with an individual’s reproductive freedom in their most intimate decisions, which includes their fundamental right to choose to have an abortion and their fundamental right to choose or refuse contraceptives. This section is intended to further the constitutional right to privacy guaranteed by Section 1, and the constitutional right to not be denied equal protection guaranteed by Section 7. Nothing herein narrows or limits the right to privacy or equal protection."
Voters will consider the measure on the November 2022 ballot.
SB 54 (Allen) – Recycled Plastics Compromise Legislation – SIGNED INTO LAW
Just in the nick of time, the Legislature sent SB 54 (Allen) to Governor Newsom, marking a years-long end to the debate over how to address the proliferation of single-use plastics. Following agreement on a legislative solution, proponents of a ballot measure that sought to impose a fee on the use of single-use plastic packaging and foodware announced that they would pull their proposal from the November ballot. In late-breaking news, Governor Newsom announced that he signed the plastics measure into law.
SB 54 enacts the Plastic Pollution Prevention and Packaging Producer Responsibility Act (Act), which imposes minimum content requirements for single-use packaging and food service ware and source reduction requirements for plastic single-use packaging and food service ware, to be achieved through an extended producer responsibility (EPR) program.
Governor Signs Gun Violence Related Bills AB 1621 (Gipson) and AB 2571 (Bauer-Kahan):
From CalMatters: "Gov. Gavin Newsom signed into law a pair of bills that he said would help protect Californians, especially kids, from rising rates of gun violence: One bill tightens restrictions on so-called “ghost guns” — those intentionally made untraceable — while another would hold companies liable for marketing certain firearms to minors."
The Governor also signed a bill to decriminalize loitering with the intent to commit prostitution, SB 357 (Wiener). In his signing message, the Governor stated: "To be clear, this bill does not legalize prostitution. It simply revokes provisions of the law that have led to disproportionate harassment of women and transgender adults. While I agree with the author's intent and I am signing this legislation, we must be cautious about its implementation. My Administration will monitor crime and prosecution trends for any possible unintended consequences and will act to mitigate any such impacts."
Attachment A: Bills of Interest to Contra Costa County
Attachment B: AB 988 Overview from California Behavioral Health Directors Association (CBHDA)
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