Legislature Announces Budget Agreement, Negotiations Underway with Administration

On Tuesday, Senate Budget & Fiscal Review Committee Chair Nancy Skinner and Assembly Budget Committee Chair Phil Ting announced early agreement between both houses on a joint $267.1 billion budget package, which includes significant investments in public health, individual financial supports, education, and aging. According to both budget committee chairs, the Legislature’s framework builds on priorities established in the Assembly’s “A Budget of Opportunity” blueprint and the Senate’s “Build Back Boldly,” as well as the Governor’s May Revision. 

The Legislature’s budget framework differs from the Governor’s May Revision in that the Legislature’s framework maximizes flexible federal funds to support and improve core programs. The Legislature’s framework also uses revenue forecasts from the Legislative Analyst’s Office (LAO) which have proven to be more accurate in recent years than other forecasts.

Below, we detail high-level investments included in the Legislature’s joint budget package:

Public Health Investments

  • $200 Million General Fund Annually for Local Health Department Infrastructure and Workforce – The Legislature included the California Can’t Wait Coalition request for $200 million ongoing for local health department infrastructure and workforce. While details are yet to be finalized, the Legislature has proposed various planning, transparency, and accountability requirements associated with the $200 million funding, including a triennial public health plan to be completed by local health departments.
    • A statement from the California Can’t Wait Coalition applauding the Legislature’s inclusion of our budget request is available here.
  • $115 Million General Fund Annually for Health Equity and Racial Justice Innovation – The Legislature included $115 million for a grant program to address health disparities statewide. The grant program would be facilitated through the CDPH Office of Health Equity and clinics, community-based organizations, and tribes would be eligible for grants. Local health jurisdictions are encouraged to work with grant recipients. Of this amount, $15 million would be allocated annually to the Transgender Wellness and Equity Fund, also to be administered by the CDPH Office of Health Equity.
  • $35 Million General Fund Annually for Public Health Workforce Development – The Legislature proposes a $35 million investment to CDPH, in collaboration with OSHPD and local health departments, to establish a public health workforce development program to recruit, expand, and retain a modern public health workforce. While details are limited at this time, the Legislature indicates the program could include training, scholarships, apprenticeships, and other programs.
  • $40 Million General Fund for CDPH Statewide Coordination and Planning – The Legislature proposes to provide $40 million annually to CDPH to support statewide coordination and planning of activities associated with the above public health investments. CDPH would receive funds to provide technical assistance to local health departments, learning collaboratives, public health communications, IT systems supports, and a workforce gap analysis, among other activities.
  • $3 Million General Fund One-Time for Public Health Infrastructure Study – The Legislature proposes $3 million for CDPH to coordinate with local health jurisdictions, community-based organizations, health care providers, and other stakeholders to conduct a study to identify specific needs to develop an agile and flexible public health infrastructure at the local and statewide level. The study would be informed by two or more public stakeholder meetings.
  • $79.1 Million General Fund One-Time for Other Public Health Investments – The Legislature proposes $63.1 million one-time for the California Reducing Disparities Project, as well as $19 million General Fund ($13 million ongoing and $6 million one-time) for End the Epidemics investments.

Other Health and Human Services

  • Youth Behavioral Health Investments – The Legislature invests $4 billion to create a new, modern, and innovative behavioral health system for youth, including $250 million for the Mental Health Student Services Act to fund school and county mental health partnerships to support mental health and emotional needs of children and youth.
  • Medi-Cal Expansion to Undocumented Adults Ages 50+ – The Legislature’s budget framework includes ongoing funding, growing to $1.3 billion annually, to expand Medi-Cal eligibility to all income-eligible residents ages 50 and older, regardless of immigration status.
  • Medi-Cal Asset Test Removal – The Legislature’s budget framework eliminates the Medi-Cal asset test for seniors by removing the “senior savings” penalty and expanding access to more income-eligible seniors.
  • CalWORKs Pregnancy Aid – $10 million ongoing is provided in the Legislature’s framework to allow a pregnant person to receive aid to meet special needs resulting from pregnancy. The budget framework also increases the CalWORKs pregnancy supplement to $100.
  • Food Supports – The Legislature’s budget framework provides $550 million in ongoing support to provide state-funded nutrition benefits to those ineligible for CalFresh or the California Food Assistance Program solely due to immigration status. The framework also provides nearly $300 million one-time to help foodbanks address high demand associated with the COVID-19 pandemic.

Homelessness

  • Record Levels of Homelessness Funding – The Legislature’s budget framework provides $8.5 billion in new funding for homelessness programming statewide over the next two years.
  • Local Government Support – The Legislature includes $1 billion in ongoing support for local governments to address homelessness. According to the Legislature, this is the first ongoing commitment from the state to address homelessness, and the funding will be accompanied by strong oversight and accountability measures.
  • Front-Line Anti-Poverty Programs – The framework includes over $1 billion for various California Department of Social Services (CDSS) programs, including for housing and homelessness.

Infrastructure

  • Broadband – The Legislature appropriates $7 billion over a multi-year period to implement broadband infrastructure statewide. Details will continue to be ironed out in negotiations between the Legislature and Newsom Administration.
  • Early Care and Education Facilities – Over$1 billion is provided for early care and education and K-12 infrastructure, including $250 million for preschool/transitional kindergarten and kindergarten facilities and $500 million for school facilities.

Reserves

  • $25.2 Billion in General Fund Reserves – A record $25.2 billion in General Fund reserves is proposed by the Legislature. The reserves include $2.9 billion in the state’s Regular Reserve, $1.2 billion in the Safety Net Reserve, $5.3 billion in the Proposition 98 Reserve, and $15.9 billion in the Rainy Day Fund. Under the Legislature’s framework, the state’s reserves will increase each year and will total over $35 billion by FY 2024-25.

Economic Stimulus

  • $8.1 Billion for Golden State Stimulus II – The Legislature has approved the Governor’s proposed Golden State Stimulus II to provide $8.1 billion in tax cuts to residents with incomes of up to $75,000. This will provide taxpayers with individual payments of $500, $600, $1,000, or $1,100, depending on their tax filing status.
  • $1.5 Billion for Small Businesses and Non-Profits – The Legislature also approved the Governor’s proposed $1.5 billion in small business and non-profit organization grants.

Both the Senate Budget & Fiscal Review Committee and the Assembly Budget Committee on Wednesday convened hearings to review the joint legislative budget framework and approve proposed investments. During the hearings, legislators spoke to the historic budget framework that provides significant investments in numerous areas of interest, including public health and health care, infrastructure, and early childcare and education, among other areas.

During public comment, CHEAC Executive Director Michelle Gibbons applauded the Legislature’s inclusion of the California Can’t Wait Coalition budget investment for public health infrastructure and workforce and expressed a commitment to continuing to work with legislative leaders as investment details are finalized over the coming weeks.

With the approval of the Legislature’s budget framework by both houses, legislative leaders will bypass the use of a conference committee to resolve differences between the houses. Legislative leaders are now engaged in negotiations with Governor Newsom as the parties work to finalize agreement on the state’s budget which is expected as early as next week. While an agreement is expected to be reached between the Legislature and the Governor before the June 15 constitutional deadline for a budget to be passed, many specific funding details, including trailer bill language, are anticipated to emerge over the coming weeks and months.

 A full overview of the Legislature’s FY 2021-22 State Budget Framework is available here.