10 Key Health, Human Services, and Housing Issues in the 2016-17 Budget Debate: Which Way Forward?

With just two weeks remaining until the Legislature’s June 15 deadline for passing a budget bill, state policymakers are at odds over whether — and by how much — California should boost funding for an array of health, human services, and housing programs in 2016-17, the fiscal year that begins this coming July 1.

In separate budget plans adopted in May, the Assembly and the Senate each committed, in their own ways, to boosting support for a range of services that assist Californians with low incomes. In some cases, the two houses adopted a unified position that conflicts with Governor Brown’s approach. In other cases, the Assembly and Senate are divided. These differences will be aired and ironed out through the two-house budget conference committee process that gets under way today.

This post looks at 10 significant health, human services, and housing issues on which state policymakers have staked out divergent positions — and the key policy questions that are on the table as lawmakers and the Governor move toward finalizing the 2016-17 state budget package. This post does not address various proposals that have broad support among lawmakers and the Governor. These include proposals to increase CalWORKs grants by 1.4 percent effective October 1, 2016; to continue rolling back the prior 7 percent cut to authorized hours of care in the In-Home Supportive Services (IHSS) program; and to use $2 billion in bond funds to increase the supply of housing for people with mental illness who are chronically homeless.

Strengthening Services and Supports for Low-Income Families, Seniors, and People With Disabilities

CalWORKs is the cornerstone of California’s services and supports for very-low-income families with children, providing modest cash assistance to roughly 500,000 households while helping parents develop their job skills and overcome barriers to employment. The state also provides subsidized child care and preschool, although many eligible children go without care due to insufficient funding. In addition, Supplemental Security Income/State Supplementary Payment (SSI/SSP) grants offer basic monthly cash assistance to more than 1 million low-income seniors and people with disabilities.

Together, these supports and services are essential to fostering economic security as well as ensuring our state’s future prosperity. Yet, a number of recession-era cuts to CalWORKs, subsidized child care and preschool, and SSI/SSP remain in place, leaving many Californians in precarious circumstances as they try to make ends meet during this uneven economic recovery.

Key questions in this year’s budget debate include whether state policymakers will:

  • Repeal the CalWORKs “Maximum Family Grant” rule, which denies additional cash assistance for any child who is conceived and born while the family is receiving aid? Research shows that this two-decade-old rule, which is also known as a “family cap,” doesn’t affect women’s decisions whether or not to have children. Instead, it pushes families deeper into poverty by denying additional support to newborns and their families. Both the Assembly and the Senate propose to repeal the family cap rule effective January 1, 2017. The Governor has not addressed this issue.
  • Help CalWORKs families pay for diapers? The Assembly plan provides CalWORKs families who are engaged in welfare-to-work activities with a voucher to buy diapers ($50 per month for each child age 2 or younger). Families would have to qualify for child care as a supportive service in order to receive this benefit. The Senate and the Governor do not address this issue.
  • Increase support for subsidized child care and preschool? State policymakers substantially cut funding for these services during and following the Great Recession. Despite recent funding increases, support for subsidized child care and preschool is still roughly one-fifth below the 2007-08 level, after adjusting for inflation. The Governor calls for restructuring subsidized child care and preschool in the coming years, while making no significant new investments in 2016-17. Both the Assembly and Senate rejected the Governor’s restructuring proposals. Instead, the Assembly boosts state support for subsidized child care and preschool by $619 million in 2016-17; the Senate, by $101 million.
  • Increase the state (SSP) portion of SSI/SSP grants? State policymakers cut the SSP portion of the grant to the minimum level allowed by federal law and, beginning in 2010-11, eliminated the annual state cost-of-living adjustment (COLA). These changes pushed SSI/SSP grants for individuals below the federal poverty line, making it harder for seniors and people with disabilities to afford basic necessities, such as housing and food. (Unlike CalWORKs families, SSI/SSP recipients are not eligible for federal food assistance.) The Governor proposes to boost the SSP portion of the grant by 2.76 percent — an increase of $4.32 per month for individuals — with this one-time COLA effective January 1, 2017.  The Assembly adopted the Governor’s proposal. The Senate provides a $10 per month increase to the SSP portion, effective January 1, 2017, in place of the Governor’s proposed COLA.

Addressing California’s Affordable Housing Crisis

Housing in California is more expensive, on average, than in every other state but Hawaii. The average cost of a home here has grown to two-and-a-half times the national average, while the state’s average rent is now 50 percent higher than the national average. Consequently, the typical California household devotes more of its income to housing than does the typical household in the rest of the nation. Housing consumes a particularly large share of low-income Californians’ budgets, and as housing costs rise, an increasing number of people are experiencing homelessness.

Key questions in this year’s budget debate include whether state policymakers will:

  • Use General Fund dollars to increase housing assistance for a broad range of Californians? The Assembly approved a $650 million General Fund housing package that, among other things, aims to increase rental housing, promote homeownership, expand housing for farmworkers, and boost assistance for people experiencing homelessness. The Senate approved $50 million annually for four years for temporary housing to address homelessness; $50 million annually for two years to sign up eligible homeless individuals for SSI/SSP, thereby boosting the amount of resources they have to pay for housing and other necessities; and $10 million to reduce homelessness among families who are involved with the child welfare system. The Governor does not address any of these proposals.
  • Expand efforts to move CalWORKs families out of homelessness and into stable housing? The state budget package for the current fiscal year (2015-16) provided $35 million for the Housing Support Program (HSP), which helps to move homeless CalWORKs families into stable housing. California also operates a Homeless Assistance Program (HAP), although benefits are extremely limited: CalWORKs families may access HAP services only once in a lifetime, even if a family experiences multiple periods of homelessness. Both the Assembly and the Senate provide $15 million on top of the $35 million currently budgeted for the HSP. With respect to the other CalWORKs housing program — the HAP — the Assembly voted to allow families to access benefits once every 12 months, whereas the Senate took no action. The Governor does not address either of these proposals.

Improving Health Care Services

Since the adoption of federal health care reform in 2010, California has been a leader among states in expanding access to affordable health care coverage for residents with low or moderate incomes. Yet, despite recent advances, gaps remain in California’s system of public health care and oral health care.

Key questions in this year’s budget debate include whether state policymakers will:

  • Re-establish school-based dental services? The California Children’s Dental Disease Prevention Program ceased operating after losing all General Fund support — roughly $3 million— in 2009. This program provided school-based dental services, such as sealants and fluoride rinses, to more than 300,000 primarily low-income children each year. Both the Assembly and the Senate provide $3.2 million to re-establish these school-based oral health services. The Governor does not address this issue.
  • Scale back “estate recovery” in the Medi-Cal program so that it applies solely to long-term care services? The federal government requires states to recover, from beneficiaries’ estates after their death, the cost of providing long-term care through Medicaid (Medi-Cal in California). California exceeds this requirement by allowing for the recovery of all Medi-Cal expenditures, including the cost of premiums paid to managed care plans on behalf of a beneficiary. In contrast, higher-income Californians who receive subsidized health care coverage through the state’s health insurance exchange (Covered California) are not subject to estate recovery. Both the Assembly and the Senate propose to limit estate recovery to long-term care services, consistent with federal requirements. The Governor does not address this issue.
  • Provide funding for in-person, certified interpreters to assist Medi-Cal patients who have limited English proficiency? The federal government requires states to provide interpretation services to Medicaid patients. However, these services are not always provided in person by certified interpreters. Some research suggests that many patients are harmed as a result of language barriers in hospitals and clinics. In order to improve communication between Medi-Cal patients and health care providers, both the Assembly and the Senate allocate $15 million in 2016-17 to increase the availability of in-person, certified interpreters. The Governor does not address this issue.
  • Allow Californians in Medi-Cal’s “Aged & Disabled” (A&D) program to qualify for no-cost coverage with incomes up to 138 percent of the poverty line? The A&D program provides no-cost, comprehensive Medi-Cal services to seniors and people with disabilities. When this program was created more than a decade ago, the income limit was set at 133 percent of the poverty line. However, this limit has declined to 123 percent of the poverty line because the program’s “income disregards” — which help to determine individuals’ eligibility — have not been adjusted for inflation. A&D enrollees whose incomes exceed this limit must pay a share of their health care costs, potentially amounting to hundreds of dollars per month, before Medi-Cal begins to pay for services. The Assembly adjusts the income disregards in order to increase the limit for no-cost Medi-Cal to 138 percent of the poverty line, the same threshold that applies to other adults. The Senate and the Governor do not address this issue.

— Scott Graves