Legislature Poised to Pass a 2015-16 Budget That Rebuilds Key Health and Human Services — Over the Governor’s Objections

The Legislature is on track to pass an on-time budget that takes major steps toward rebuilding services battered by prior years’ cuts. The state Assembly and Senate have finished ironing out the differences between their separate spending plans for the 2015-16 fiscal year, which begins this coming July 1. Legislative staffers are currently putting the finishing touches on the budget bill along with bills related to the budget, with the goal of having them “in print” at least two days prior to the June 15 constitutional deadline. (While the Legislature must pass the budget bill on or before June 15, budget-related “trailer” bills may be passed at any time.)

Although the lawmakers’ spending plan will pass by comfortable margins, this plan does not have Governor Brown’s “blessing” and therefore is expected to face a hostile reception once it reaches the Governor’s desk. Legislators assume the state will receive about $3 billion more in revenues in 2015-16 than the Governor estimates. Moreover, lawmakers appropriately use some of these revenues to strengthen key services and supports at a time when millions of Californians are struggling to make ends meet during this uneven recovery from the Great Recession. Governor Brown objects to both the higher revenue projection and these additional state investments.

In theory, legislators could send the Governor their budget plan and make him veto all of the spending to which he objects. However, lawmakers have signaled that they expect to continue negotiations with the Governor after June 15. Legislative leaders and the Governor could strike a budget deal that rolls back at least some of the investments included in the Legislature’s version of the budget. Alternatively, lawmakers could hold firm on their priorities for the state in the year ahead. The path forward is uncertain, but a resolution is expected before the July 1 start of the new fiscal year.

The coming negotiations are likely to focus to a large degree on the Legislature’s major reinvestments in health and human services. Last week, we highlighted 12 key health and human services issues on which the Governor and lawmakers had staked out divergent positions, with the Assembly and Senate taking different actions in most of these cases. Now that lawmakers have worked out their differences, the only disagreement remaining on these issues is between the Legislature and the Governor.

This blog post revisits these 12 issues, highlighting how the Legislature’s spending plan improves upon the Governor’s proposal by strengthening services and supports for families, seniors, and people with disabilities. (This post does not discuss proposals for which there is broad support among lawmakers and the Governor, including rolling back the current 7 percent cut to authorized hours of care for seniors and people with disabilities in the In-Home Supportive Services Program.) The following summary is based primarily on our understanding of the Legislature’s actions as described during the budget conference committee’s meeting on June 9.

Strengthening Services and Supports for Families With Children

The Legislature’s 2015-16 spending plan:

  • Reinstates the annual state cost-of-living adjustment (COLA) for CalWORKs cash assistance effective July 1, 2019The Legislature does not provide a COLA in 2015-16. The Governor has tended to oppose COLAs funded with state General Fund dollars.
  • Repeals the CalWORKs “Maximum Family Grant” policy, which denies additional cash assistance to certain newborns. This policy — often called a “family cap” — bans families from receiving additional assistance when a child is conceived and born while any member of the household is receiving aid. The Legislature repeals this policy effective January 1, 2016. The Governor is opposed.
  • Expands efforts to help move CalWORKs families from homelessness and into stable housing. The Legislature provides $30 million on top of the $20 million included in the Governor’s proposed 2015-16 budget to help move a larger number of homeless CalWORKs families into stable housing. The Governor is opposed.
  • Substantially increases state support for early care and education. The Legislature increases working families’ access to affordable child care and preschool by providing nearly $400 million above the Governor’s proposed level for 2015-16. The Legislature’s actions include adding 12,000 subsidized child care and 15,000 state preschool slots, boosting payment rates for child care and preschool providers, and extending eligibility to more families by increasing the income eligibility limit for the first time since 2007. The Governor is opposed.

Strengthening Services and Supports for Seniors and People With Disabilities

The Legislature’s 2015-16 spending plan:

  • Increases the state (SSP) portion of SSI/SSP grants in 2016 and reinstates the annual state COLA in 2020. SSP grants for individuals would rise by $10 per month — from $156 to $166 — as of January 1, 2016. (SSP grants for couples would remain frozen at the current level of $396 per month.) In addition, the state COLA for SSI/SSP grants would be reinstated, but not until January 1, 2020. The Governor has tended to oppose COLAs funded with state General Fund dollars.
  • Implements new rules affecting home care workers effective October 1, 2015These rules – which include a new requirement to provide overtime pay – apply to In-Home Supportive Services (IHSS) workers as well as to other home care providers. These rules were supposed to take effect this past January, but the Governor delayed implementation in response to a related federal lawsuit. California can implement the rules regardless of the outcome of this litigation. The Legislature’s action sets a new implementation date for IHSS — October 1, 2015 — and revises state law to remove any perceived barriers to putting these changes in place. The Governor is opposed to the “perceived barriers” change.
  • Boosts payment rates for community-based services provided to people with developmental disabilities. The Legislature increases these rates by up to 5 percent for community-based services, with some increases taking effect on July 1, 2015 and others on January 1, 2016. The Governor is opposed.

Strengthening Health Care Services

The Legislature’s 2015-16 spending plan:

  • Provides $40 million in 2015-16 to allow children to sign up for comprehensive Medi-Cal coverage regardless of their immigration status. This action assumes that the provisions of Senate Bill 4 will be enacted into law. SB 4 makes undocumented children automatically eligible for full-scope Medi-Cal and allows undocumented adults to enroll in Medi-Cal to the extent that sufficient funding is available. The Governor is opposed.
  • Partially rolls back the 10 percent cut to Medi-Cal provider payments. The Legislature’s action is not entirely clear and is not currently available in writing. Lawmakers appear to have reduced the 10 percent cut by half for dentists effectiveJuly 1, 2015 and also by half for all other providers effective April 1, 2016. In addition, the Legislature’s action appears to reduce the retroactive portion of the cut (going back to 2011) by half for providers effective April 1, 2016. The Governor is opposed.
  • Restores the full range of dental benefits for adults enrolled in Medi-Cal. State policymakers eliminated Medi-Cal dental benefits for adults in 2009, but partially reinstated some dental services in 2014. The Legislature restores the remaining dental benefits for adults effective January 1, 2016. The Governor is opposed.
  • Reinstates Medi-Cal benefits that were eliminated in 2009. The Legislature reinstates the following benefits in 2015-16: acupuncture, audiology, incontinence creams and washes, optician/optical lab, podiatry, and speech therapy. (Chiropractic services, which were also eliminated as a Medi-Cal benefit in 2009, are not restored under the Legislature’s spending plan.) The Governor is opposed.

As this summary makes clear, the Legislature and the Governor have yet to find common ground on various budget decisions related to essential health and human services. With deliberations likely to continue into late June, keep an eye on California Budget Bites for our latest commentary and analysis on this critical debate.

— Scott Graves