January 24, 2020 Edition

Assembly, Senate Budget Committees Convene Overview Hearings

This week, the Assembly Budget Committee and the Senate Budget & Fiscal Review Committee each convened overview hearings to examine the Governor’s 2020-21 proposed budget. The full committee hearings held on Tuesday and Wednesday this week marked the first hearing events of the months-long budget process that will occur through June as budget subcommittees are expected to begin scheduling hearings over the coming weeks on specific proposals included in the Governor’s budget.

During the Assembly and Senate hearings this week, committee members received a high-level presentation of the Governor’s proposed investments from Vivek Viswanathan from the Department of Finance (DOF). DOF discussed major components of the Governor’s budget, including in areas of budgetary reserves, early childhood and education, health, housing and homelessness, criminal justice, and climate, among other topics.

For both hearings, Legislative Analyst Gabriel Petek briefed committee members on the overall Governor’s budget structure, key choices for legislators to consider during the budget process, and the current budget condition and multiyear fiscal outlook. Petek indicated that both the Legislative Analyst’s Office (LAO) and DOF had nearly identical revenue estimates with less than 0.1 percent difference between the two. Petek further noted that over 95 percent of the proposed investments by the Newsom Administration are less than $100 million each. Of the available surplus, much of the one-time allocations are proposed to be placed toward housing and homelessness; ongoing surplus investments are slated to be placed toward health care and higher education.

Looking across the budget forecast period, the LAO warned legislators about the potential for decreasing surplus amounts and a reliance on a number of uncertain factors, including continued strong economic performance, federal approval of the managed care organization (MCO) tax, and suspension of various programs in 2023-24. The LAO recommended that the Legislature consider whether the total level of reserves set aside in the Governor’s proposed budget are satisfactory and whether the state’s operating surplus should be increased, particularly over the forecast period.

Committee members in both the Assembly and Senate had the opportunity to query DOF and LAO representatives about the Governor’s proposed investments and the state’s overall economic condition. Assembly Budget Committee Chair Phil Ting and Senate Budget & Fiscal Review Committee Chair Holly Mitchell, along with other committee members, applauded the Newsom Administration’s focus on housing and homelessness which includes an initial state investment of $750 million for rental subsidies, housing units, and board and care facilities. Other inquiries and areas of note were centered around the Governor’s proposed investments in wildfire and emergency preparedness, the creation and consolidation of new state departments (including the proposed Department of Early Childhood Development and the Department of Cannabis Control), and criminal justice reforms.

In the health arena, several committee members from both the Assembly and Senate inquired about the outstanding federal approval of the MCO tax and its associated budgetary impacts, proposed investments and actions related to prescription drug costs, and behavioral health and Mental Health Services Act (MHSA) reforms. Notably, Senator Pan, who chairs both the Senate Budget & Fiscal Review Subcommittee No. 3 on Health & Human Services and the Senate Health Committee, honed in on the Newsom Administration’s proposal to extend by 18 months a suspension of various health and human services-related investments that were made in the 2019 Budget Act. Pan also briefly discussed the Newsom Administration’s Medi-Cal Healthier California for All (formerly CalAIM) to drastically transform the state’s Medi-Cal delivery system.

On the Assembly side, Assembly Member Joaquin Arambula, chair of the Assembly Budget Subcommittee No. 1 on Health and Human Services, discussed the importance of care coordination and wraparound services under the area of the Administration’s Medi-Cal Healthier California for All (CalAIM), as well as the expansion of full-scope Medi-Cal benefits to undocumented older adults. Further, Assembly Member Jim Wood, chair of the Assembly Health Committee, inquired about the lack of detail on health-related proposals in the Governor’s budget, including those related to prescription drug costs and healthcare affordability. In response to Wood’s inquiry, DOF representatives indicated the Administration continues to flesh out details on the expansive proposals and is aiming to provide more information this spring.

As a reminder, CHEAC’s January Budget Memo, which provides a summary of key areas of interest to local health departments, is available here. Budget subcommittee hearings and actions will be reported through our CHEAC Weekly Update and additional information and position letters from CHEAC will be posted throughout the budget process on our website here.

Video recording of the Assembly Budget Committee hearing is available here and the Senate Budget & Fiscal Review Committee hearing is available here.

Fiscal Committees Act on Two Year Bills

This week, fiscal committees in both houses acted on a few remaining two-year bills still moving through the legislative process. Today is the deadline for bills introduced in 2019 to be heard and reported to the floor. Two-year bills that were advanced to the floor of their house of origin must be acted upon by January 31 to remain in play.

Our CHEAC Weekly Bill Chart is available here. Please note a number of two-year bills we have been following failed to advance and will be removed from subsequent bill charts.

Emergency QR Code Cannabis Regulations Released

The California Bureau of Cannabis Control (BCC) released emergency cannabis regulations yesterday making it mandatory for cannabis businesses to post their unique Quick Response Code (QR code) certificate in their storefront windows and carry it with them when making cannabis deliveries. BCC argues the regulations are necessary to help consumers with identifying licensed cannabis retailers, assist law enforcement efforts, and support the legal cannabis market. The intent is to ensure that consumers can avoid purchasing cannabis products from unlicensed businesses easily and prevent consumers from purchasing untested and potentially harmful cannabis goods from an unlicensed source. Furthermore, the BCC argues the emergency regulations are necessary to combat the recent outbreak of Vaping-Associated Pulmonary Injury in California particularly due to illegal retail commercial cannabis businesses visibly resembling or having names that sound similar to legal cannabis businesses.

More information on the emergency regulations can be found here.

UCLA Issues Interim WPC Evaluation, Finds Progress in Improving Care for Californians

This week, the UCLA Center for Health Policy Research published its draft interim report of the Whole Person Care (WPC) Program, finding significant progress in establishing crucial data systems and core infrastructure needed to coordinate services for WPC clients. This infrastructure includes processes to support effective care coordination among county and community-based providers, development of health information technology systems, and establishment of partnerships for managing care.

UCLA also found promising evidence of improvement in outcomes of care, including improved rates of follow-up after hospitalization for mental illness, initiation and engagement in alcohol and other drug dependence treatment, and timely provision of comprehensive care plans. Better health outcomes as a result of the WPC Pilots, according to UCLA, include improve beneficiary self-reported overall and emotional health, controlled blood pressure, and diabetes control.

The draft interim report is currently under review by the U.S. Centers for Medicare and Medicaid Services (CMS) for comment. The interim WPC evaluation will be finalized after all CMS comments and feedback have been addressed. The full draft interim evaluation report is available here.

City of Long Beach Health & Human Services Featured on NACCHO Podcast Episode

The City of Long Beach Health & Human Services Department was recently featured on the National Association of County & City Health Officials (NACCHO) Podcast from Washington, a podcast series that provides public health professionals with in-depth interviews featuring some of the field’s top officials. In the most recent episode, NACCHO staff interview Latino Health Access and the Long Beach Department of Health & Human Services, examining their partnership on a number of initiatives related to diabetes, mental health, and nutrition.

The full podcast episode is available here.