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"California Comeback Plan": Breaking Down Governor Newsom's May 2021 Revised Budget Proposal

Monday, May 24, 2021

BY SCG'S PUBLIC POLICY TEAM

 

OVERVIEW

A SURPRISING SURPLUS

On May 15, 2021, Governor Newsom released the May Revision to the 2021-2022 California budget. The revised budget builds on the January proposal by going beyond the emergency needs created by the COVID-19 pandemic and addressing the long-term systemic inequities in California. In a typical year, the Governor would present a budget representing the state’s needs, the administration’s aspirational goals, and a conservative estimate of the state’s revenue. The proposed budget would then be debated, and elements would be reduced or removed altogether for the May version. In 2021, the exact opposite has occurred. The 2021 May Revision has increased the proposed January budget by roughly $41 billion, moving it from $227 billion to $268 billion. This year’s May budget reflects an increase in revenue of $75.7 billion, primarily from high-income Californians and corporations who fared well during the pandemic. These revenue gains were also a result of Federal and state interventions that helped mitigate the economic effects of unemployment and evictions. Additionally, the American Rescue Plan provided $27 billion in direct federal aid.

The additional $75.7 billion in revenue will provide: $38.1 billion in discretionary funds, $37.6 billion in constitutionally required obligations for K-12 schools and community colleges, and $11 billion for reserves and to pay down long-term liabilities. Some analysts, including the Legislative Analyst’s Office, only consider the discretionary funds a surplus because the other funds include stipulations. Of the $38.1 billion in discretionary funding, the governor proposes the “Comeback California Plan,” which dramatically increases the funding enacted by the $5 billion “Early Action Plan” we presented in the previous SCG Budget Governor’s Budget Proposal Analysis. Thus, while the economic outlook seems more positive than it did in January, there is still an opportunity for policymakers to help expedite the state's recovery from the pandemic and address systemic inequities for Californians, especially those disproportionately affected by the crisis. 

 

INITIAL CRITICISM

Nevertheless, the May Revision has received some criticism for its proposed spending. For example, critics are concerned that the governor is still attempting to access $12 billion in reserves and borrowing to meet the proposed spending limits. Some say that if the tolls are exhausted now, they will not be available for future emergencies, and Federal funds may not be as readily available as they are currently. In addition, the State Appropriations Limit (SAL) will be exceeded this year and is estimated at $16 billion in revenues. The actual amount of a potential excess will ultimately depend on decisions made by the Legislature. The May Revision also includes about 400 new proposals, which, over the long term, are unlikely to be fully met by the surplus. Critics recommend focusing on fewer, higher-priority proposals and providing the resources needed to create and sustain them. Lastly, there are also concerns regarding the administrative and logistics challenges departments will face managing this amount of discretionary spending. Critics recommend a phased-in approach to offset the challenges of managing the new and large amount of funding.

 

Economic Security and Equitable RecoveryHealthcare & Human ServicesEnvironment and Climate ChangeNonprofit/Small BusinessJustice SystemHomelessness & HousingEducationCOVID-19 Response | Looking Ahead


Economic Security and Equitable Recovery 

As the state progresses into the next stage of recovery from the pandemic’s economic downturn, the new budget attempts to rebuild equitably by prioritizing low-income families, individuals, and communities of color. Accordingly, the May budget pushes beyond the emergency relief provided for families and individuals in the “Early Action Plan” by providing a springboard for economic stability through the “California Comeback Plan.” 

Overview of the California Comeback Plan: 

  • $8 billion in Golden State Stimulus payments to Californians earning less than $75,000 annually, including undocumented immigrants. The state will give a $600 payment to tax filers who did not receive the first Golden State Stimulus payments or an additional $500 payment to Californians who file taxes with SSNs. Californians who file taxes with Individual Taxpayer Identification Numbers (ITINs) would receive a $1,000 payment. People who file taxes with ITINs are primarily undocumented Californians or mixed-status families and were excluded from federal stimulus payments during the pandemic.
  • Emergency rental assistance to cover 100% of back rent owed by Californians with low incomes. $2 billion in American Relief Plan (ARP) funds for utility assistance for renters.
  • $12 billion in state and federal funds over two years to address homelessness.
  • $35 million over five years for basic income pilot programs administered by cities or counties.
  • Expanding eligibility for comprehensive Medi-Cal coverage to approximately 80,000 undocumented adults aged 60 and older.
  • Significant increases in funding for K-12 education, including additional ongoing funding to support English learners, students from low-income families, and foster youth.
  • Universal transitional kindergarten for all 4-year-olds in the state phased in over four years.
  • 100,000 new subsidized child-care slots and financial assistance for childcare providers using federal and state funds.
  • Base increases and one-time funding for the state’s higher education systems. 
  • Establishing college savings accounts for California children in families with low incomes.
  • $7 billion in American Rescue Plan and state funds to address the digital divide.

 

 
Healthcare & Human Services 

The pandemic highlighted California’s extreme health disparities, which are products of systemic racism and historic disinvestment in low-income and rural communities and communities of color. Governor Newsom’s May Revision reflects increased expenditures for the state’s healthcare system due to increased caseloads caused by the pandemic. 

The budget calls for the following under Medi-Cal:

  • Medi-Cal Expenditures: Medi-Cal, the state’s Medicaid program, is anticipated to cover approximately 14.5 million Californians in 2021-22, over one-third of the state’s population. The May Revision assumes that the caseload will continue to increase by roughly 6.6 percent from 2020-21 to 2021-22. This increase in caseloads, primarily due to the economic impacts of COVID-19 and households losing employer-provided health plans, is estimated to increase the state’s Medi-Cal expenditures by $13.5 billion. As a result, the revision has set the Medi-Cal budget to $115.6 billion in 2020-21 and then $123.8 billion in 2021-22. 
  • Telehealth Expansion: The revision proposes establishing Medi-Cal payment rates for audio-only telehealth to continue the telehealth flexibilities available during the pandemic while ensuring access to in-person care. Providers could claim reimbursement for audio-only care so long as recipients 1) are located in California or “border communities” and 2) can provide in-person services to each Medi-Cal enrollee served by audio-only telehealth.
  • Postpartum Medi-Cal Eligibility: The Administration will pursue a new federal option allowing states to extend pregnancy-related, postpartum Medicaid coverage from the current 60-day limit to 12 months. This coverage is a five-year option, which will take effect on April 1, 2022, and is included in the federal American Rescue Plan.  
  • California Advancing and Innovating in Medi-Cal (CalAIM): Last year, the Administration delayed its plans to initiate CalAIM in the 2020-21 budget due to the economic effects of COVID-19. Governor Newsom has increased CalAim’s launch allocation from $1.1 billion to $1.6 billion in the May Revision. Many of our funders deeply involved in the intersection of health equity, housing, and homelessness are excited for the state’s renewed framework for whole-person care that involves better coordination and service delivery of Medi-Cal programs. 
  • Office of Health Care Affordability: Although the January proposal included an $11.2 million initial investment to create the Office of Health Care Affordability within the Office of Statewide Health Planning and Development, Governor Newsom has delayed his proposal for one year. The new office would have been responsible for increasing transparency in medical services' cost and quality, establishing cost targets for providers, and enforcing compliance to those targets. Instead, the governor has allocated these funds to create a healthcare payments database slated to track health care costs.    

 

Human Services: 

  • Dignified and Healthy Aging: In less than a decade, 1 in 5 Californians will be 65 years of age or older. This significant demographic shift requires a statewide, coordinated response to this group’s unique economic and medical needs. In addition, the combination of the economic uncertainty from the pandemic and the high percentage of older adults, especially people of color, living in poverty in California, makes this group highly susceptible to future housing and food insecurity. To this end, the Administration has included these investments: 
    • Adult Residential Facilities (ARF) and Residential Care Facilities (RCF): $500 million for the next two fiscal years (total of $1billion) to provide one-time funding to build, acquire, and/or rehabilitate care facilities serving seniors and other adults – this is a vast improvement from the initial $250 million proposed.  
    • Office of Medicare Innovation and Integration: The revision builds on the original budget and supports the Administration’s intent to create an Office of Medicare Innovation and Integration within the Department of Health Care Services to provide better analysis methods and data-driven plans to expand access to Medicare for low to middle-class older adults. $602,000 ongoing ($452,000 General Fund) is allocated for this office. 
    • Older Populations: Notably, the Administration has chosen to expand Medi-Cal to undocumented seniors aged 60 and older no sooner than May 1, 2022. As we have witnessed, the risks of exposure and susceptibility to the COVID-19 virus are higher amongst older adults, especially within immigrant communities excluded from receiving federal assistance and the past COVID-19 relief packages. Moreover, expanding full-scope Medi-Cal services to undocumented older adults comes at a time when affordable and a stable source of preventative and chronic healthcare is critical to their health and well-being amidst a pandemic. 
  • The governor’s proposal would continue to leave undocumented immigrants ages 26 to 59 without access to comprehensive Medi-Cal coverage. However, state policymakers should expand comprehensive Medi-Cal coverage to all undocumented Californians, not only for the state’s collective wellbeing but also combat health inequities.

 

Behavioral Health: 

The pandemic has emphasized the need for behavioral health services, especially as people grapple with the psychological weight of Safer at Home orders, distance learning, financial stressors, and more. The revised budget builds on initiatives included in the proposed budget by investing in county health departments, capacity, and information-sharing infrastructure with schools to address the rising need for behavioral health services.

Highlights include: 

  • An increase of $431 million from the proposed $400 million to increase the number of students accessing behavioral health services through Medi-Cal managed plans, in partnership with county health services and K-12 schools. An additional $1 billion from ARP in 2021-22 and $1.7 billion from ARP, General Fund, and Federal Trust fund in 2022-23.  
  • The initial proposal of $25 million is increased to $30 million in one-time funding to provide grants to the Mental Health Student Services Partnership program, which funds partnerships between schools and county health departments. 
  • The governor proposed $750 million for a one-time general fund available over three years, for competitive grants for counties to strengthen the behavioral health services continuum ranging from acute, emergent services to rehabilitative programs. Counties can use the grants to acquire and rehabilitate real estate properties for behavioral health treatment centers to reduce the number of at-risk and unhoused individuals and increase available beds. The May Revision provides an additional $10 million from the American Rescue Plan (ARP) and shifts $300 million from the General Fund to the ARP. 

 

Public Health: 
The May Revision does not include new investments for local public health departments. The underfunding of our public health system became even more apparent when the counties and cities were inadequately prepared to respond to the emerging health threats. The lack of preparedness largely impacted Black, Latinx, Native Hawaiian, and Pacific Islander Californians, as these groups experienced the highest rates of illness and death due to COVID-19. The state should allocate more support to bolster public health infrastructure, such as providing ongoing funding for local public health departments to address the population’s current and future health concerns and minimize health inequities for Californians. 
 

 

Environment and Climate Change 

Alongside the pandemic, California experienced one of its most devastating wildfire seasons last year. The undeniable reality of climate change demands bold actions and effective policies to mitigate further damage to our environment and our communities. 

The May Revision allocates the following to climate efforts: 

  • Wildfire Resiliency: $1.24 billion, an increase from the original $1 billion proposed, will be directed at wildfire resilience and disaster preparedness. 
  • Increase Fire Personnel: The revision allocates a one-time General Fund of $38.9 million to support the staffing of additional California National crews and maintain the CAL FIRE crews that began in April 2021. This increase is a significant adjustment from the original $143 million proposed to hire more firefighting personnel across the state. Notably, last fall, the Governor signed legislation that would reduce barriers to former inmates seeking careers in fire or other emergency response. 
  • Forest Management and Prevention: An increase from $512 million to $708 million will improve landscapes across California to strengthen wildfire resilience. Tactics will include forest thinning, prescribed fire, and other management methods.  

 

Cap-and-Trade: The May Revision proposes adjustments to the Governor’s Budget Cap and Trade spending plan, originally $1.37 billion, to shift funding included in the 2020-21 early action package to the fiscal year 2021-22.

  • AB 617 (Community Air Protection Program): $325 million for targeted air monitoring, emission reduction programs, and incentives for cleaner vehicles for communities at disproportionate risk of air pollution. 
  • Transportation and Zero-Emission Vehicles: Last fall, Governor Newsom signed an executive order that requires all cars manufactured and sold in the state to be zero-emission vehicles by 2035. To this end, the May Revision promises an increase from the proposed $635 million to $650 million, a one-time fund over the next three years dedicated to reducing carbon emissions from cars, trucks, off-road, and other vehicles. In addition, the budget includes funding for sales tax exclusion incentives, infrastructure for manufacturers, and the Clean Cars 4 All trade-in program, which encourages low to middle-class households to trade in their older, higher-polluting vehicles.

 

Nonprofit/Small Business

The Governor’s 2021-2022 proposed budget included various investments to support small businesses and nonprofit organizations. The May Revision is similar but includes the American Rescue Plan’s additional funds. You can revisit our complete analysis of the January budget for a recap of the proposal. The January budget proposed more than a billion dollars to support struggling businesses and nonprofits via tax credits and cash grants. 

The May Revision includes an additional $1.5 billion in American Rescue Plan funds for the COVID-19 Relief Grant Program. This program provides grants of up to $25,000 for small businesses and nonprofit organizations impacted by COVID-19. The grants will be distributed in three rounds, with the first two rounds directed at businesses on the waiting list during previous grant funding cycles.

The May Revision proposes the following supports for businesses and nonprofit organizations:

  • Maintains the proposed Main Street Small Business Tax Credit: The Administration allocates $100 million credit against state income or sales taxes for small businesses impacted by COVID-19. These resources aim to support retaining and hiring employees. 
  • Maintains California Alternative Energy and Advanced Transportation Financing Authority (CAEATFA): Under CAEATFA, businesses can exclude sales taxes if they purchase manufacturing equipment that utilizes alternative energy. The budget proposes doubling the state’s investment in this program by providing a $100 million expansion. 
  • Reduces California Infrastructure and Economic Development Bank (IBank): IBank would receive a reduction from the $100 million investment proposed in the January budget to a $70 million allocation due to additional support being provided under the State Small Business Credit Initiative. 
  • State Small Business Credit Initiative: Indicates the administration’s intention to apply for an estimated $895 million in American Rescue Plan funds to assist small businesses in accessing capital.
  • Maintains California Competes Tax Credit: The January budget proposed a one-time $430 million increase to California Competes Tax Credit, which incentivizes businesses to create jobs in California. In addition, the proposal includes $250 million in American Rescue Plan funds for a one-time California Competes grant program and $180 million for a one-time increase to the tax credit program.
  • California Ports: Proposes $250 million in one-time American Rescue Plan funds to assist California ports that have suffered revenue losses during the pandemic.
  • The California Rebuilding Fund: This California Rebuilding Fund, a partnership consisting of public, private, and philanthropic funds, would receive an additional $12.5 million to provide loans to small businesses. The fund is expected to provide $125 million in resources for small businesses.
  • Tax Forgiveness: Creates tax breaks to businesses who have had loans forgiven from the federal Paycheck Protection Program or received advance grants from the federal Economic Injury Disaster Loan program. These tax breaks will reduce the state’s revenue by an estimated $6.2 billion over the next two years.

 

There is initial concern over specific components of the allocation for nonprofits and small businesses. Admittedly, much of the previous business funding was poorly targeted and did not support the companies most in need of financial support. While the funding is more intentional and directed this time, there is still concern that the resources will continue to create windfalls for wealthy individuals and businesses. Lastly, some of the tax credits proposed will create a future loss in California state revenue and may not provide economic benefit to the state.

 

Justice System

The Governor’s proposal for a program to allow individuals charged with traffic violations to avoid in-person appearances and pay fees online will see fruition. This program focuses on supporting low-income individuals, providing discounts over 50 percent of fines and assessments, and the opportunity to participate in a fee payment plan. The May Revision reveals that the initial proposal of $12.3 million will remain, increasing to $58.4 million by 2024-25.  

California will close two state prisons by June 2022, which will result in savings of around $270 million per year beginning in 2022-23. The May Revision does not propose to close additional state prisons in the coming years. 

 

Homelessness & Housing

Addressing Homelessness:
California has cited homelessness as a critical issue for the state and has made it a central focus of the May Revision. The budget proposal includes a total investment of approximately $12 billion over two years in state and federal funds to address homelessness. In addition, property acquisition remains a significant portion of the one-time funds to address homelessness. However, just as in the January budget proposal, the May Revision does not address permanent housing or a long-term plan to support ongoing funding at a local level or how the operations of the acquired properties will be supported.  

The proposed investments are as follows:

  • A total of $3.5 billion in one-time funds over two years for acquiring and rehabilitating hotels, motels, and other buildings. These one-time funds have been increased by $2.75 billion from the January proposal and include $1 billion targeted to housing for families experiencing homelessness through the Homekey program. California will convert the acquired property into interim or permanent housing for individuals experiencing homelessness. 
  • A total of $2.45 billion over two years to acquire and rehabilitate behavioral health treatment and community-based residential facilities. The Department of Health Care Services will administer the funds via grants to counties. This funding more than triples the total funds proposed in January and will focus on providing individuals with behavioral health treatment. 
  • $1 billion over two years (including $550 million one-time General Fund and $450 million ARP fund) to acquire and rehabilitate adult and senior facilities, an increase of $750 million over the January proposal.

 

Focus on Housing:

As we approach the end of the state's eviction moratorium on June 30, 2021, it is uncertain if the governor will sign another extension. A total of $5.2 billion in federal funds from the December Consolidated Appropriations Act and the more recent American Rescue Plan (ARP) are available to address renter needs. Governor Newsom proposes to use these funds to cover 100 percent of tenants' back rent and rent due, $2 billion for utility assistance, including water systems accumulated during the pandemic. 

To address the immense concern regarding California's longstanding affordable housing crisis, the May Revision also proposes using ARP funds, $1.75 billion, for "shovel-ready" housing projects that would bring 6,300 affordable units to the state. A proposed $4 billion one-time General Fund over two years to develop student housing through the University of California, California State University, and California Community Colleges. 

Additional housing investments proposed in the May Revision include*:

  • Legal assistance for eviction and foreclosure prevention: $20 million ARP funds per year for the next three years ($60 million total) for legal aid services for tenants and mortgage holders, administered through the Judicial Council.
  • Affordable housing preservation: $300 million ARP funds to preserve affordability for HCD legacy projects.
  • First-time homebuyer assistance: $100 million ARP funds to expand the existing program administered by the California Housing Finance Agency (CalHFA).
  • Seasonal farmworker housing: $30 million total one-time General Fund (an increase of $20 million from the January proposal) for deferred maintenance and habitability improvements

*Source: California Budget and Policy Center

 

Education

The May Revision demonstrates Governor Newsom’s continued support of California’s students, families, and public education. Total funding includes a historic $121.7 billion for all K-12 education programs. As a reminder, Proposition 98 constitutionally guarantees annual funding for K-12, community colleges, and state preschool programs.  

A few highlights from the May Revise include:

  • $2 billion one-time Proposition 98 General Fund investment to reopen schools safely. 
  • $3 billion for community schools that focus on student wellness and comprehensive student support. 
  • There is an additional $1.1 billion to repay deferred payments to K-12 school districts and $623 million in one-time funding, including $2 billion in federal funds for schools to provide interventions such as tutoring to ease the impact of the COVID-19 pandemic had on education.    

 

Focusing on our educators, an increased allocation of $1.5 billion through 2023-24 for professional development programs focused on educator effectiveness, justice, implicit bias training, and social and emotional learning. Educator programs received a massive increase from the initial $250 million proposed in January. In addition, the May Revision increases one-time funding by $950 million to focus on teacher pipeline programs. Specifically, the programs include:

  • $450 million in Prop. 98 dollars for the Teacher Residency Program to recruit and prepare special education, science, technology, engineering, mathematics, and bilingual education teachers.
  • $400 million in non-Prop. 98 General Fund dollars for the Golden State Teacher Grant Program, a grant program for students enrolled in teacher preparation programs who commit to teaching in “high-need” subjects, including bilingual education, STEM, and special education.
  • $100 million in Prop. 98 dollars for the California Classified School Employee Teacher Credential Program, which provides grants to K-12 school districts to recruit school employees to become classroom teachers.
  • $20 million one-time General Fund to provide a credential fee waiver in 2021-22 for individuals entering the K-12 educator workforce.

 

Additional education investments proposed in the May Revision include:

  • Universal Transitional Kindergarten: The Governor’s revised budget proposes implementing universal transitional kindergarten for all four-year-olds in CA over four years. The 2021-22 school year will serve as a planning period to fully implement in 2024-25. An allocation of $250 million one-time Prop. 98 General Fund for planning and implementation has been set aside in place of the January proposal. The May Revision also includes a $10 million General Fund for the Department of Education to update the state’s preschool learning standards based on the most current research and provide resources to pre-kindergarten teachers. To address an increase in students, the May Revision administers $900 million from the General Fund in 2022-23 and increases to $2.7 billion by 2024-25. The May Revision also includes funding in 2022-23 through 2024-25 to add another staff person in transitional kindergarten classrooms. 
  • Community Colleges: A portion of Prop. 98 funding is allocated to California’s Community Colleges System, which serves close to 2.1 million students. In addition, the May Revision proposes to fully pay down deferred state payments (approximately $327 million), $30 million to establish basic need centers in colleges, and invest $100 million in student retention and enrollment that may have declined due to the pandemic, an additional $20 million than previously proposed. In addition, there is a $115 million one-time funding to invest in transitioning to a zero-textbook system, as well as $50 million one-time funds for in-person instruction.  
  • CSU & UCs:  For the CSU, the revised budget proposes a $373.4 million additional General Fund, including a $74.4 million ongoing General Fund support for operational costs. This is an additional $111.5 million from January’s proposal. There is also a $299 million General Fund to address 2020-21 reductions. For the UCs, the budget proposes a $371.1 million additional General Fund, including a $69.3 million ongoing General Fund to support operational costs and a $302.4 million General Fund to address reductions in 2020-21. In addition, to address the growing concern over student homelessness, a $4 billion General Fund allocation for low-cost student housing grant program. The program would prioritize students who are under-represented or have low incomes, to reduce non-tuition attendance costs.  
  • Digital Divide: Though a digital divide existed before the pandemic, the need and demand for secure internet were exasperated when California closed in-person schools. Though efforts to address this digital divide for students, there is concern that it will remain a consistent barrier. The revised plan proposes $7 billion of the American Relief plan and state funds over three years to address and close the digital gap across the state. The intent is to expand statewide infrastructure to reach unserved areas and expand local networks, especially in rural areas.
  • California Child Savings Accounts Program: In the 2019-20 budget, Governor Newsom provided funding to create the California Kids Investment and Development Savings Program in the State Treasury Department for children from low-income homes. Seeded with an initial deposit from the state, family, friends, and others may contribute to the child's savings. Once the child reaches adulthood, they will have access to the account. The revised plan includes about $2 billion one-time funds from ARP to establish the new California Child Saving Accounts Program. This program would create college savings accounts with a seed deposit of $500 for first graders enrolled in public school and defined as "low-income" by the Local Control Funding Formula. In addition, the revision reflects the governor's goal to invest $170 million ongoing General Fund in accounts for future first-graders, beginning in 2022-23.

 

COVID-19 Response

California continues to experience weeks of consistent improvements. As a result, the state is likely to fully reopen on June 15, 2021, as COVID-19 cases decline and over 50 percent of Californians have received at least one dose. The state continues to deploy federal, state, mutual aid, and private sector resources to support communities and help rebuild from the devastation caused by the pandemic. 

  • Federal Assistance: To date, the federal government has enacted six federal stimulus bills that have supported emergency response, testing, contact tracing, health care, and vaccination distribution. Funds also support unemployment and K-12 schools. California will benefit from over $600 billion provided through the federal bills. 
  • State and Local Fiscal Recovery Funds: The American Rescue Plan Act allocates $350 billion to states, local governments, and tribal governments to address fiscal impacts from COVID-19 public health emergency or economic effects of the pandemic. California expects to receive over $43 billion in combined recovery funds to cover costs incurred between March 3, 2021, and December 31, 2024

 

According to the U.S. Treasury, California anticipates receiving the following: 

  • State: $27 billion
  • Counties: $7.7 billion for 58 counties
  • Metropolitan Cities: $7 billion for 191cities with populations over 50,000
  • Smaller Cities: $1.2 billion for 291 cities with populations below 50,000. These funds will pass through the state.
  • Tribes: $190 million based on the minimum amount of about $1.7 million for each of California's 109 tribes

 

The state will receive funds in a single payment, and local governments will receive half of their funding in May 2021 and the balance 12 months later.

 

Looking Ahead & Opportunities for Philanthropy

California’s stronger-than-predicted revenue streams combined with extensive federal relief should provide funders with the hope that we will soon be past the emergency response stage of the past year. California’s Assembly and Senate will propose their versions of the budget bill in the coming weeks, which will then be worked out in a conference committee. The conference committee will submit a single version of the budget bill to both houses. The Senate and Assembly will then vote on this final version before sending it to the Governor. Finally, California will adopt the budget upon signature between June 15 - July 1, 2021. As the budget is enacted, we encourage philanthropy to continue engaging in bold advocacy and connect with policymakers to meet the needs of all of California’s communities. 

However, even with robust investments, our analysis shows a concerning amount of proposals built on one-time funding that lack a sustainability plan and ongoing support for the communities. If the additional programs and funding introduced in the May Revision do not meet the needs of all vulnerable Californians or if they struggle to overcome legislative obstacles along the way, philanthropy should be prepared to use their platform and resources to lift communities and help inform budget allocations to where there is the most substantial need. Funders should monitor the implementation of the pilot programs to track the ones that are successful and advocate for their sustainability. In addition, the new programs will likely produce new opportunities for philanthropy to forge new public=private partnerships. Such partnerships will continue to be paramount to the long-term recovery of our state. 

Finally, Los Angeles Mayor Eric Garcetti has modeled LA’s latest budget after the State funding proposed in the May Revision. For example, the LA Budget also includes increased resources for homeless services and pilot programs for guaranteed basic income. You can learn more about L.A.’s Justice Budget by reading SCG’s analysis

The Public Policy team at Southern California Grantmakers will continue to monitor the budget process and provide updates on significant developments. Contact our Public Policy team if you need further support on how funders navigate advocacy guidelines. 


 

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