The State Budget: Light on Restorations, Heavy on Debt Repayment

By Rebecca Gonzales, Director of Government Relations and Political Affairs

The main story behind the recently enacted state budget is that — unfortunately — there isn’t much of a story. The year started with high hopes that an improving economy would result in significant budget restorations to state programs for low-income Californians that had been decimated during the recession. At the end of the day, or at the end of the budget process, the Governor “successfully” crafted his budget priorities by aggressively paying back state debt without any significant investment in our communities.

State general fund revenues are up by about $7 billion, for a total of almost $108 billion, for the 2014-15 budget year. Total state spending equals $156.4 billion from all funding sources. The budget reduces state debt by $10.7 billion, or about 10 percent of General Fund Revenues. The budget also includes a healthy transfer of $1.6 billion to the state’s rainy day fund.

Despite the payback for debt reduction, there were a few wins. One surprise is that the budget eliminated the lifetime ban on the receipt of CalWORKs and CalFresh benefits for individuals with felony drug convictions. This proposal has been carried in several bills over the years that have either been vetoed or failed at some point in the process. Also, for a second year in a row, CalWORKs grants will be raised by 5 percent. Of course this is after years of cuts, but at least we are starting to see grants inch up. Advocates did hope to see the automatic Cost of Living Adjustment (COLA) reinstated for CalWORKs and for additional funding for family stabilization services and for a small per child food benefit, but these items were not included in the final budget.

More wins included $20 million for housing stability services for CalWORKs families and money to increase access to preschool for low- and moderate-income families. The budget also restored some money to the California Black Infant Health Program and money to increase payments to providers in the Program for All-Inclusive Care for the Elderly (PACE). We also supported Assemblymember Yamada’s successful proposal for a staffing position in the California Department of Social Services (CDSS) to provide leadership and support to county APS programs.

Another item that we worked on along with other partners was the elimination of the Maximum Family Grant in CalWORKs, which does not allow for a grant increase when a child is born to a family that is already on CalWORKs. This proposal was contained in a bill, SB 899 (Mitchell), which failed in the Senate Appropriations Committee. There was then an attempt to insert this item in the budget, but that proposal did not prevail.

NASW worked with other mental health groups to put money in the budget to support enforcement of mental health parity. Although this money was reduced by Governor Brown’s line-item veto, there is still a substantial amount of new money in the budget to enforce parity.

In health care, the 10 percent cut to payments for certain Medi-Cal providers was maintained, which will likely result in access issues as fewer providers are willing to take Medi-Cal cases just as enrollment rises from the enactment of health care reform. There was also hope that some optional Medi-Cal benefits that were eliminated in 2009 would be restored, but that was not included in the budget.

The budget did include two policy changes which will help provide food to low-income families. This included food assistance to communities most affected by the drought and a policy to prevent a reduction in CalFresh benefits that were slated to be reduced due to a change in federal law.

Funding for the schools and community colleges was increased by $10 billion in Proposition 98 funding and modest increases are slated for the UCs and CSUs. Money was also provided in the budget to implement the new Middle Class Scholarship program for middle-income students at CSU and UC campuses, which will be fully implemented in 2017-18.

As usual, corrections spending was increased but some money was provided for community-based interventions in order to reduce recidivism. This includes programs for delinquency prevention, homelessness prevention, reentry services, mental health and substance abuse disorder treatment, workforce training, pretrial services, and the operation of collaborative courts. There were also sentencing and custody changes to alleviate some of the overcrowding in our county jails.

This year’s budget also included money for additional positions at the BBS, which will help alleviate the backlog in processing licensure applications. NASW worked with other professional organizations to keep these positions in the budget.

Projections for the future do show an improving fiscal condition which will hopefully loosen the purse strings in the future. Years of budget reductions have resulted in widespread hardship to low-income communities. We will continue to work on this issue next year.