The 2021 California Budget Cycle
The 2021 California budget cycle was uniquely large with an increase in revenue from primarily high-income Californians and corporations who fared well during the pandemic. The additional $75.7 billion was dispersed into discretionary funds, constitutionally required obligations for K-12 schools and community colleges, and reserves to pay down long-term liabilities – opening up opportunities for policymakers to address systemic inequities exacerbated by the pandemic. Included in the budget proposal were various initiatives to support economic security and equitable recovery from the pandemic like the $8 billion Golden State Stimulus payments to Californians earning less than $75,000 annually, emergency rental assistance, or expanding eligibility for comprehensive Medi-Cal coverage. This proposal also outlined allocations to a variety of efforts like improved behavioral health care services, climate disaster and wildfire resilience, investments in non-profit/small businesses, addressing homelessness, and much more. Unfortunately, several of these proposals were built on one-time funding that lacked a sustainability plan and long-term support.
Why It Matters
The philanthropic sector can play a role in helping inform budget allocations to where there is most substantial need. Government and philanthropic organizations have been long-standing partners in solving some of the nation’s most challenging issues. Government funding is crucial for the sustainability of many nonprofits and social support systems, while philanthropic funding is needed to supplement government funds when they may be too restrictive or don’t meet the extent of nonprofit expenses. Because of this mutual investment in the success of community-based organizations, foundations should pay close attention to the Governor’s budget to ensure that the state is allocating funds to where they are needed most and in a way that promotes equitable access and positive outcomes.
Foundations are uniquely positioned to bring together networks of funders, nonprofits, and individuals to create a united front, while also holding expertise that can be crucial for providing information for budget amendments. While there are many opportunities within the budget process for foundations to influence the final outcome, they can especially influence changes to the January proposals by attending legislative subcommittee hearings, putting out calls to action, and educating legislators and community members on matters relevant to philanthropy.