January 15, 2021 Edition
This week, the Assembly Budget Committee and the Senate Budget & Fiscal Review Committee convened informational hearings to receive an overview of the Governor’s FY 2021-22 Proposed Budget. The Assembly convened its hearing on Monday and the Senate convened its hearing on Thursday. Both committees received a high-level presentation of proposed investments from representatives from the Department of Finance (DOF) and the Legislative Analyst’s Office (LAO).
In the Assembly hearing, Assembly Budget Committee Chair Phil Ting, in opening comments, discussed the Governor’s budget proposal that was unveiled last week and applauded many of the Governor’s proposed investments in education, safety net services, and housing and homelessness. In the Senate hearing, Senate Budget & Fiscal Review Committee Chair Nancy Skinner similarly, in opening remarks, discussed the state’s current fiscal picture, recent federal fiscal relief, and Senate priorities for investments for the upcoming fiscal year.
DOF Chief Deputy Director Erika Li addressed both the Assembly and Senate committees, walking legislators through major components of the Governor’s proposed budget. Ms. Li discussed the state’s economic outlook, including pandemic-related impacts on revenues and expenditures, and the Governor’s proposed budget structure.
DOF representatives additionally presented a series of proposed immediate action items, including $2 billion to safely reopen schools, $2.4 billion for one-time $600 tax refunds to low-income residents, $575 million in small business grants, $71 million in small business fee waivers, and $2.6 billion in federal relief funds and an eviction moratorium extension. Ms. Li presented proposed investments by subject area, including heath, homelessness, higher education, and climate and environmental protection, among other areas.
Legislative Analyst Gabriel Petek additionally presented to both Assembly and Senate committees, highlighting significant investments proposed by the Newsom Administration and providing commentary for further legislative consideration.
Assembly and Senate committee members had the opportunity to ask questions of DOF and LAO presenters on the Governor’s proposed investments. Questions spanned a wide array of topics, including education funding and school reopening processes, wildfire preparedness and response, unemployment insurance, health coverage, housing and homelessness, and climate change, among others.
A significant topic for discussion was the ongoing response to the COVID-19 pandemic, with many legislators inquiring about the Administration’s efforts related to testing, contact tracing, industry guidance, and vaccines. Notably, Assembly Member Joaquin Arambula and Senator Richard Pan discussed the role of local health departments in responding to the COVID-19 pandemic and inquired about public health investments to support continued pandemic-related activities throughout the state.
During public comment, CHEAC Executive Director Michelle Gibbons highlighted the critical role of California’s local health departments throughout the pandemic and the significant resources and funding needed by local health departments to continue their response. Specifically, a county coalition consisting of the California State Association of Counties (CSAC), Urban Counties of California (UCC), Rural County Representatives of California (RCRC), CHEAC, and HOAC seek:
- To support LHD COVID-19 response efforts for the next six months:
- $400 million to prioritize COVID-19 vaccine distribution and administration
- $280 million for COVID-19 testing
- $440 million for contact tracing, disease investigation, and supports for the most vulnerable
- To support ongoing public health infrastructure needs:
- $50 million ongoing General Fund for public health infrastructure and equity
- $3.45 million General Fund for a public health infrastructure study
Additional information on the county coalition budget requests to support local health departments is available here.
Over the coming weeks, budget subcommittees in both the Assembly and Senate will begin hearings to further analyze the Governor’s proposed investments, including those proposed for immediate action in January. CHEAC will continue to keep its members apprised of relevant budget updates, and additional information on CHEAC’s engagement in the budget process can be accessed here.
A video recording of the Assembly hearing is available here. A video recording of the Senate hearing is available here.
Following the issuance of the Governor’s FY 2021-22 Proposed Budget last Friday, the Legislative Analyst’s Office (LAO) issued its overview report this week. The LAO report provides a high-level assessment of the Governor’s proposed investments, highlighting areas for further legislative consideration and providing commentary on potential legislative actions relative to proposed investments.
The LAO report discusses the state’s fiscal picture following last year’s enacted budget, detailing the receipt of higher revenues and realization of lower expenditures through the ongoing COVID-19 pandemic. Under the Governor’s upcoming fiscal year budget, the state is anticipated to end 2021-22 with $18.9 billion in total reserves, representing an increase of $7.5 billion over the last year’s enacted level. Additionally, as a result of the budget experience during the current fiscal year, the Governor is anticipated to have a $15.5 billion windfall to allocate in 2021-22. However, the state budget is projected to have structural deficits in out years, reaching $11.3 billion in FY 2024-25.
At the outset, the LAO recommends that the Legislature consider federal funding relief that was signed into law in late December as they consider the Governor’s proposed investments. As the LAO indicates, many of the investments proposed by the Newsom Administration overlap with funds appropriated through the federal relief measure. Given the timing of the passage of the federal measure, the Governor’s proposed budget does not include details around the use of federal funds that are to be received by California.
The LAO assesses the Governor’s proposed investments by subject area and details major budget proposals outlined by the Governor last week. Related to health, the LAO discusses the Governor’s proposed California Advancing and Innovating Medi-Cal (CalAIM) initiative, recommending the Legislature learn about proposed changes from last year’s CalAIM proposal, resolve key outstanding questions around the proposal, and weigh the potential benefits and risks associated with the Administration’s “complex reform package.”
The report additionally discusses the funding of ongoing COVID-19 response activities, indicating that “state funding can make a significant difference for public health measures and controlling the virus” and urging rapid vaccine distribution.
Over the coming weeks and months, the LAO is expected to issue subject area-specific reports of the Governor’s proposed budgetary investments. The full LAO report is available here.
Following up on an announcement in late December, the Newsom Administration this week issued its guidance for reopening schools for in-person instruction during the ongoing COVID-19 pandemic. According to the Administration, the Safe Schools for All Plan focuses on four pillars: 1) funding; 2) safety and mitigation; 3) oversight and assistance; and 4) transparency and accountability. Each of these areas is detailed below:
- Funding: The Governor’s FY 2021-22 Budget Proposal includes significant investments to support safe in-person instruction for schools statewide, including:
- $4.6 Billion for Expanded Learning – Funding to expand educational opportunities, including summer school, prioritizing students from low-income families, homeless youth, and others disproportionately impacted by the pandemic.
- $2 Billion for In-Person Instruction – Funding to safely resume in-person instruction, prioritizing schools that are safely open now or plan to safely reopen in February and March
- Safety and Mitigation: The Administration highlights updated guidance from CDPH, including:
- Consolidated Requirements – Updated guidance consolidates Cal/OSHA requirements applicable to all employers and requirements from the previous CDPH guidance.
- Heightened Mask Requirements – Guidance now requires masks to be worn by all students regardless of age and recommends disposable surgical masks for staff who come into regular contact with others. All public schools are able to leverage state-negotiated master contracts for masks.
- Streamlined Process for Elementary Schools – The updated guidance also streamlines the process for schools serving K-6 grades to resume in-person instruction if they are in the Purple Tier of the Blueprint for a Safer Economy.
- Oversight and Assistance: The Administration has established a State Safe Schools Team to oversee and assist local implementation of safe in-person instruction. To support this oversight, CDPH issued two data-related directives:
- Reopening Status – Schools will be required to report the status, scale, and model of reopenings every other week.
- Transmissions – Schools will be required to report any positive COVID-19 cases for individuals who have been on school sites to the local health departments, who then report the data to CDPH.
- Transparency and Accountability: The Administration will be building out an interactive map detailing reopened schools over the coming weeks. Other actions include:
- Safety Portal and Hotline – School staff and parents can submit school safety concerns online or via telephone. The State Safe Schools Team will monitor reports and intervene with technical assistance and/or enforcement actions, where necessary.
- All-County Letter – The State Safe Schools for All Team issued an all-county letter providing clarity and highlighting issues raised by schools that are currently open or plan to reopen in the near term.
To support its Safe Schools for All Plan, the Administration additionally launched the Safe Schools for All Hub, an online one-stop shop for all information about school reopening processes. The full guidance from the Administration is available here.
President-Elect Joe Biden released an ambitious $1.9 trillion economic relief plan yesterday, entitled the “American Rescue Plan.” Congressional Republicans have already started to express opposition to the plan with some Democrats criticizing the plan for not providing more relief for hard-hit Americans. Given the slim margins in both houses, the fate of the package remains uncertain at this time.
Specifically, the plan targets three areas: a national vaccination plan and supports to tackle the COVID-19 pandemic, immediate financial relief for working families, and support to small businesses and communities hard hit by the pandemic.
In terms of specific COVID-19 proposals, the American Rescue Plan includes:
- $20 billion for a national vaccination program in partnership with states, localities, Tribes, and territories. This program will include creating community vaccination centers and deploying mobile vaccination units for hard-to-reach areas.
- $50 billion to expand testing, provide funding to purchase rapid tests, expand lab capacity, and support schools and local governments to implement regular testing protocols.
- Create a public health jobs program to support pandemic response with the intent to hire 100,000 individuals to work in local communities on vaccine outreach and contact tracing in the short term and then to later build long-term public health capacity.
- Address disparities by ensuring equitable distribution of vaccines and supplies, provide funding for health services for underserved communities, and invest in health services on tribal lands.
- Provide funding for states to deploy strike teams to long-term care facilities that experience COVID-19 outbreaks and conduct better infection control oversight.
- Provide funding for COVID-19 safety in federal, state, and local prisons, jails, and detention centers including mitigation strategies, safe reentry, and vaccinations of both those incarcerated and staff.
- Funding to increase the United States analytics capacity on disease sequencing, surveillance, and outbreaks.
- $30 billion invested into the Disaster Relief Fund to ensure sufficient supplies and protective gear and provide 100% federal reimbursement for critical emergency response resources to states, local governments, and Tribes, including deployment of the National Guard.
- $10 billion investment in expanding domestic manufacturing for pandemic supplies.
- Finally, additional investments in COVID-19 treatments, protections for workers, and funding and support for international health and humanitarian response to the pandemic.
President-Elect Biden’s plan also provides additional significant investments for working families including:
- Provide an additional $1,400 per-person in relief payments to working families.
- Extend and expand unemployment insurance benefits.
- Extend the 15 percent Supplemental Nutrition Assistance Program (SNAP) benefit increase through September 2021.
- $3 billion investment for the Women, Infants, and Children (WIC) program for increased enrollment and to expand outreach for the program.
- Partner with restaurants, through the FEMA Empowering Essential Deliveries (FEED) Act, to help get food to families who need it and help get laid-off restaurant workers back on the job.
- Temporarily cut the state match for SNAP.
- $5 billion in emergency assistance to secure housing for those experiencing or at risk of homelessness.
- Extend the eviction and foreclosure moratoriums and continue applications for forbearance on federally guaranteed mortgages until September 30, 2021.
- $30 billion in additional rental assistance and energy and water assistance for low-income families.
- Raise the national minimum wage to $15 an hour.
- Call on employers of frontline essential workers to provide back hazard pay.
- Expand access to high-quality ad affordable childcare.
- $25 billion for an Emergency Stabilization Fund for hard-hit childcare providers in danger of closing;
- Provide an additional $15 billion in funding for childcare assistance through the Child Care and Development Block Grant program;
- Increase tax credits to help cover the cost of childcare.
- Make the Child Tax Credit fully refundable for the year.
- Expand the Earned Income Tax Credit for the year.
- Provide an additional $1 billion to states to cover additional cash assistance provided to Temporary Assistance to Needy Families (TANF) recipients.
- Preserve and expand health care coverage.
- Subsidize COBRA coverage through September 2021;
- Expand and increase the value of the Premium Tax Credit.
- Expand access to behavioral health services by asking Congress to appropriate $4 billion in funding to enable SAMHSA and HRSA to expand access to these services.
- $20 billion in additional funding to ensure adequate funding for veteran’s health care.
- $800 million in supplemental funding for various federal programs to combat gender-based violence.
And the final area covered by the American Rescue Plan, support for struggling communities, includes:
- $350 billion in emergency funding for state, local, and territorial governments to ensure they keep frontline workers, such as first responders, public health workers, and other essential workers, on the job to assist with vaccine distribution, testing, reopening schools, and maintaining other vital services.
- Provide $15 billion in flexible, equitably distributed grants for small businesses.
- Leverage $35 billion in government funds for $175 billion in additional small business lending and investment including low-interest loans and venture capital.
- Work with Congress to ensure restaurants, bars, and other businesses that have been disproportionately impacted by the pandemic have sufficient support through the Community Credit Corporation at the USDA.
- $20 billion in relief funding for public transit agencies
- $20 billion to support Tribal governments’ response to the pandemic
- Several investments to modernize federal information technology against future cyber-attacks.
The Biden-Harris economic recovery plan will be considered by Congress upon the incoming Administration’s inauguration next week. The full proposed spending plan is available here.
Today, the incoming Biden-Harris Administration announced its plans for ramping up COVID-19 vaccine production and administration, as well as key personnel joining the Administration’s COVID-19 Response Team. Below, we detail these announcements:
COVID-19 Vaccination Plan
In its announcement, the Biden-Harris Administration acknowledged the ongoing challenges with the COVID-19 pandemic, including the limited vaccine supply and issues with federal logistics. President-Elect Joe Biden proposed a series of actions to ensure that 100 million Americans are vaccinated within his first 100 days in office. These include:
- Getting More People Vaccinated
- Encouraging states to allow more people to be vaccinated, including individuals 65 and older and frontline workers
- Ensuring equity throughout the vaccination process to reach those in hard-to-reach, marginalized communities
- Creating More Vaccination Sites
- Standing up new, federally-supported community vaccination centers nationwide with the support of the Federal Emergency Management Administration (FEMA), clinical and non-clinical staff, contractors, the National Guard, and state and local teams
- Fully reimbursing state deployment of the National Guard to support vaccinations and providing additional FEMA assistance
- Launching mobile vaccination clinics and provider partnerships to reach underserved urban areas and rural communities
- Making vaccines available in pharmacies as nearly 90 percent of Americans live within five miles of a pharmacy
- Launching a new partnership with Federally Qualified Health Centers (FQHCs) nationwide to allow direct FQHC access to vaccines
- Launching new models to serve high-risk individuals in congregate settings, including homeless shelters, jails, and institutions serving individuals with intellectual and developmental disabilities
- Increasing Supply
- Ensuring a robust vaccine supply and spurring manufacturing, including using the Defense Production Act
- Being a reliable partner for states by providing actionable data on vaccine allocation timelines and delivery
- Increasing vaccine availability while maintaining a commitment to the two-dose schedule
- Mobilizing More Personnel
- Surging the public health workforce to support the vaccination effort, including by providing regulatory flexibilities for vaccinators
- Mobilizing a public health jobs program to support the COVID-19 response, including by funding 100,000 public health workers for vaccine outreach and contact tracing activities
- Ensuring Americans Have Information and Confidence
- Launching a federally led, locally focused public education campaign, including a public education campaign to address vaccine hesitancy
During the rollout of the Biden-Harris Administration’s COVID-19 vaccination plan, COVID-19 Response Coordinator Jeff Zients noted, that the incoming Administration’s plan “is a fundamentally different approach from the Trump Administration.” The Biden-Harris Administration is anticipated to address the COVID-19 pandemic with “the full strength of the federal government,” working closely with local communities already engaged in response efforts.
Additional information on the incoming Administration’s COVID-19 vaccine plan is available here.
COVID-19 Response Team Personnel
Recently, the Biden-Harris Administration additionally announced a series of new appointments to its COVID-19 Response Team. These appointments include, among others:
- David Kessler, Chief Science Officer of COVID Response – Dr. David Kessler serves as a co-chair of the COVID-19 Task Force for President-Elect Joe Biden and was previously the Commissioner of the U.S. Food and Drug Administration from 1990 to 1997 under Presidents George H.W. Bush and Bill Clinton. Dr. Kessler is a professor of pediatrics and epidemiology and biostatistics at the University of California, San Francisco (UCSF).
- Andy Slavitt, Senior Advisor to the COVID Response Coordinator – Andy Slavitt served as the Acting Administration for the U.S. Centers for Medicare and Medicaid Services (CMS) under President Barack Obama and helped lead the turnaround of the federal government’s healthcare.gov website.
- Bechara Choucair, Vaccinations Coordinator – Dr. Bechara Choucair serves as the senior vice president and chief health officer for Kaiser Permanente and has served as the California COVID-19 Testing Task Force Co-Chair. Choucair additionally served as the Chicago Public Health Commissioner from 2009 to 2014.
Additional information on the incoming Administration’s COVID-19 Response Team personnel is available here and here.
Today, the U.S. Centers for Disease Control and Prevention (CDC) issued a study in its Weekly Morbidity and Mortality Report (MMWR) indicating the more highly transmissible variant of the COVID-19 virus detected in the United Kingdom, B.1.1.7, has the potential to increase the U.S. pandemic trajectory in the coming months. Based on the latest modeling, the CDC projects that the B.1.1.7 variant will become the predominant virus variant in March 2021.
Currently, the B.1.1.7 variant has been detected in over 30 countries, including the United States. As of this week, approximately 76 cases of the variant have been detected in 10 U.S. states. As a result of this projection, the CDC warns that the increased transmission is likely to further strain health care resources, require extended and more rigorous implementation of public health strategies, and increase the percentage of population immunity required for pandemic control.
The full CDC study is available here.
The Department of Health Care Services (DHCS) will hold a webinar to provide an overview of the relaunch of the Newsom Administration’s California Advancing and Innovating Medi-Cal (CalAIM) initiative. The CalAIM initiative builds upon prior successes in health care delivery and proposes to provide more services and supports for patients with complex needs. According to the Administration, key goals of CalAIM include promoting whole person care, reducing program complexity, and modernizing systems.
The overview webinar will be held on Thursday, January 28 from 2:00 pm to 3:00 pm. Registration and additional information is available here.