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California saw another year with a substantial discretionary budget surplus (approximately $49 billion), and many advocates, organizations, and community leaders had high hopes for the State Budget Plan. However, the May Revision of the budget bill that was approved by the legislature last week left some feeling unsatisfied with the allocation of our state's surplus.

While the revised budget makes advances in many categories – Medi-Cal, climate and disaster preparedness, bridging the digital divide, among others – there are several missed opportunities that advocates hope either get addressed in negotiations between Governor Newsom and the Legislature or that will be made priorities in next year's budget. In addition, the Legislature and the Governor have not reached a consensus on whether to allocate large sums of money to ongoing expenditures that support education, social safety net, and social programs or whether those funds should focus on rapid relief programs and putting money into reserves. Given the possibility of a recession in the next few years and the limitations of the Gann limit, if state revenues continue to grow, it will become a difficult balance to strike. Lastly, given that the budget plan was crafted during a midterm election year, it is likely Governor Newsom felt pressure to find areas of compromise to attract a broader range of voters. 

SoCal Grantmakers' policy team has combed through many resources (see the end of the article for links) to provide the budget's Highlights, Missed Opportunities, and The Bottom Line as it relates to SCG's policy agenda items. This analysis aims to help SCG members understand how this budget plan will affect our work and encourage our sector to actively participate in next year's budgetary process.

Governor Newsom’s revised 2022-23 state budget proposal makes strides in supporting some Californians but fails to adequately target the state’s strong revenues to provide direct, meaningful assistance to individuals and families struggling the most to pay for basic needs in our communities."
– From the California Budget & Policy Center's Article, "State Leaders Have Opportunity to Provide Targeted Relief to Californians Struggling to Make Ends Meet"

Creating Access to Equitable Health Care and Sustainable Environments

Highlights

  • $132.7 billion to support Medi-Cal, including expanding coverage to include all income-eligible adults regardless of immigration status and eliminating Medi-Cal premiums for children, pregnant people, and people with disabilities. 

  • $304 million to support state premium subsidies for Californians with low- and middle- incomes who purchase health insurance through the Covered California platform.

  • $933 million in one-time payments to approximately 600,000 hospital and nursing facility workers to help retain this critical workforce.

  • $125 million to improve affordability and access to reproductive health care services, which will go toward providers rendering services to low- and middle-income people and community-based organizations for culturally competent outreach and educational efforts.

  • $300 million in ongoing General Fund dollars to improve state and local public health infrastructure.

  • $21 billion for various climate projects, including drought relief, wildfire preparedness, zero-emission vehicle incentives, and clean energy development.

  • $235 million for grants to climate-related industries to carry out training programs and $265 million to support the transition from oil and gas to other clean energy industries.

Missed Opportunities

  • There’s a distinct lack of new investments to support older adults and people with disabilities. Specifically, there’s no proposal to increase Supplemental Security Income/State Supplementary Payment (SSI/SSP) grants to be over the federal poverty line. 

  • No increase in payment rates for workers who need time off to care for their health or a family member’s health, so payment rates under the Disability Insurance Fund will revert to 2018 levels of 55% of earnings. 

  • $265 million to support the transition from oil and gas to other industries was not granted nor mentioned in the May Revise. This proposal included $200 million over two years for the Department of Conservation to seal oil and gas wells, $50 million for a pilot fund to support displaced oil and gas workers, and $15 million for a well-capping workforce pilot to train displaced oil and gas workers.

The Bottom Line

Health funders can rejoice about increased government funding to support many different groups that will benefit from inclusion in public programs. However, this is not the time to slow down your work. Although these expansions are a good start, many communities are still left out, and we need to advocate to ensure that payment rates are modernized, so they align with our 2022 economy. Moreover, funders and their grantees should reach out to state leaders to encourage them to make additional investments that reinforce the public health workforce at a local level. 

Environmental funders can similarly be excited about the large climate package the Newsom administration is discussing. However, to ensure that the funds are used meaningfully and benefit communities most impacted by climate change and disaster, it’s important to keep following this piece of the budget to see how the State decides to implement the funds and to advocate for equitable distribution of the money. Be sure to think about public-private partnerships, as well, to support training in climate-related industries and opportunities for a transition to a clean energy-focused workforce.

Attaining and Maintaining Equity in Human Rights

Highlights

  • One-time $175 million investment for the administration of rapid response efforts to support migrant arrivals at the southern border and $468 million for the Department of Public Health for temporary shelter, testing, vaccines, and support services.

  • $150 million in additional funds for Project HomeKey for permanent and interim housing and $500 million for over two years to support grants to local governments for interim housing solutions on state-owned land.

Missed Opportunities

  • Advocates hoped for more targeted economic support for undocumented families who do not qualify for thousands of dollars in federal aid and other support programs for basic needs during COVID-19.

  • Although the budget plan includes an 11% increase to CalWORKS grants to raise them over the deep poverty threshold, it only guarantees this increase for some families based on technicalities, leaving many to receive grants at just 42% of the federal poverty line.

  • A distinct lack of funding for domestic violence prevention and response; advocates are calling on the Governor to allocate "$15 million in ongoing funding for prevention programs…[and] $25.5 million for under-resourced and over-represented communities…to end violence for future generations."

  • There are modest investments in safety net programs for justice-involved individuals, including one-time funding for increased access to probation services, especially for unhoused Californians, victim service pilot programs, and grants to support California tribes in locating and identifying missing Indigenous persons. However, these funds are relatively small and overshadowed by a missed opportunity to call for the closure of more state prisons and an increase in funding for law enforcement-related programs. 

The Bottom Line

The items covered in this agenda cover a range of issues and funders are advised to take note of all the missed opportunities. Funders can pressure state legislators to supplement some of these programs to ensure that the most vulnerable communities receive meaningful aid. For example, funders can advocate for a grant increase for families excluded from the CalWORKS increase, so their reimbursements are above the deep poverty line. Additionally, homelessness remains one of the most pressing issues for our state, and although millions of dollars have been poured into solutions, it isn't clear how much long-term impact has been made. Public-private partnerships will be crucial to ensuring these funds have a lasting impact. The philanthropic sector has long worked to tackle basic human rights issues. It will need to continue advancing creative solutions to problems like public safety and community-led care to fill the gaps in the 2022-2023 budget. 

Encouraging Economic Mobility and Prosperity

Highlights

  • $1.1 billion one-time over two years for broadband infrastructure to help bridge the digital divide, especially for rural communities.

  • $2.7 billion for emergency rental assistance for qualified low-income tenants who applied before March 31.

  • $35 million to expand the California Food Assistance Program (CFAP) to undocumented people aged 55 or older who don't qualify for federally funded CalFresh benefits, making California the first in the nation to take this step. 

  • One-time $1.5 billion investment in affordable housing development and preservation programs; $500 million for 2023-2025 for adaptive reuse projects and "downtown-oriented and affordable housing."

  • Significant funding to augment support for California's Community Colleges (which serve large populations of low-income and students of color), as well as for the CSU and UC systems to close graduation gaps, make on-campus housing more affordable, and lower non-tuition costs

Missed Opportunities

  • Undocumented people under age 55 are left out of the CAFP expansion, meaning many families are not fully covered and will continue to struggle to afford nutritious food, especially during times of shortage.

  • Thanks to the surplus and Prop. 98 spending requirements, funding for K-12 education programs is substantial, and the May Revision includes even higher allocations than the January proposal. However, the choice to distribute the funds through a per-pupil formula has advocates questioning whether the grant funds meet the goal of equitable funding.

  • Missed opportunity to support students who may have canceled their pursuits of higher education (more often students from Black, Latinx, and low-income households) due to high costs exacerbated by the pandemic through streamlined grant applications for financial aid

The Bottom Line

Economic mobility and prosperity have been on everyone's minds since the pandemic, and the massive surplus of state funds gave many hope that the budget would address some of our state's core issues. While the state is taking steps in the right direction, funders will still need to support those left out of these grant programs and expansions. For example, while funding broadband infrastructure is great, we also recognize the need for subsidies to make internet access more affordable so that all California households can access the web for education, telemedicine, and many other crucial tasks. Philanthropy needs to be a strong voice in telling the Governor and Legislature that there's a need for legislation to extend benefits so that all communities, especially those who are historically left behind, can thrive.

Uplifting Civic Engagement and a Fair Democratic Process and Strengthening Philanthropy and Nonprofit Activities

Highlights & Missed Opportunities

There aren't any standout budget items that threaten these focus areas, nor do many uplift them. The only line item of note is a one-time $500 million fund to provide grants of $10,000 to $50,000 to small businesses and nonprofit organizations in industries hit hardest by the pandemic, which should help bolster other funding directed toward these groups.

The Bottom Line

SoCal Grantmakers and many of our members have put significant work into programs and advocacy around fair redistricting, accurate Census data collection, and voting rights. Funders can continue to advocate for and support educational programs that teach communities about these issues and can encourage state leaders to provide partnership in these efforts. Additionally, philanthropy can show solidarity and support for our nonprofit partners by signing on to a letter of support for H.R. 7587, Nonprofit Sector Strength and Partnership Act, and continuing to participate in public-private partnerships to help nonprofits access much-needed funding.

Timeline for Advocacy

Since the Legislature has already approved the budget proposal, the next step is for Governor Gavin Newson to sign off on it by July 1, 2022. Before then, we can expect more negotiations between the Governor and legislators, trailer bills to amend and add, and a finalized plan for 2022-2023. If there is a missed opportunity you feel passionate about, or if there's something your organization feels is essential to retain in the budget, contact the Governor before July 1 by submitting a letter or making a phone call.

You can also prepare to start the process again to influence next year's plan:

  • Mark your calendars for July 9 – that's when department directors and agency heads start planning for the 2023-2024 budget proposal by conducting reviews of each program. Reach out to state leaders to help make specific funding requests!

  • Please work with your grantees to determine what would be most helpful for the communities they serve and help encourage them to contact state officials with their ideas.

  • The Governor submits the new budget proposal to the Legislature by January 10 – be ready to read through the plan and reach out to Senate and Assembly subcommittees with comments while the budget is debated through April.

  • Keep an eye out for the May Revision, and write to your legislators to let them know how the budget will impact your work, your communities, and what they can do better.

Resources

For more information on any of the content in this article, please visit the following links. Special thanks to the California Budget & Policy Center and Cal Matters for their expertise.

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