“Put simply, the Governor’s budget aims to address a large array of proposals, across many issue areas, with relatively small dollar amounts." Legislative Analyst Office
Governor Newsom released his proposed 2020-21 State Budget. The budget includes updated revenue estimates on California’s large budget surplus. The Legislative Analyst’s Office is projecting another $7.5 billion dollar surplus.
California’s budget continues to be in a good position. We estimate the Legislature will have a $7 billion surplus available to allocate in the upcoming budget process, and in addition, will build an $18.3 billion balance in the state’s rainy day fund by the end of 2020‑21. With more than a decade of economic expansion, coupled with deliberate legislative action to put the budget on better footing, the California budget is in good condition. ~ LAO’s California's Fiscal Outlook
Last year’s budget investments in housing and child care were significant and we hope to see many of results from those investments in the coming years as the resources arrive in the counties.
The 10,000 additional full-day or full-year preschool slots this year will impact many California children. Child care keeps California working, yet in one of the richest cities in the world one in 4 children live in a third world economy. Access to child care will not only help their parents earn, it will also help the children learn and help them develop social and emotional skills that will last them a lifetime. “Child care allows me to continue my college education so that I will be able to compete in the job market and earn a sustainable living wage.” Naima Facih, Parent Voices SF leader. With these kinds of investments we can begin to expand the ‘good’ economy to many who are left behind. “If we are serious about addressing poverty, we must consider the future we are providing our children. A future that begins with early childhood education. No more waiting - we must fully fund early childhood education for every child in California” ~ Darrell A. Peeden, VP, Sigma Beta Xi Youth and Family Services
The average unemployment rate in San francisco, for the last two years remained at an all-time low of approximately 2.3%. The September 2019 unemployment rate of 1.8% was the lowest level ever recorded in San Francisco, and is far below what most economists consider full employment. In the wealthiest county, in the wealthiest state in the wealthiest country in the world, with the stock market at all time highs and low unemployment, San Francisco’s Controller's Office is projecting a $195.4 million dollar ‘shortall.’ Again, the wealthiest state in the wealthiest nation in the history of human civilization has the highest percentage of people living in poverty in the country. The U.S. Census Supplemental Poverty Measure is five percent higher than the national average in California (U.S. Census Supplemental Poverty Measure: 2018). The government reports low unemployment and the record highs in the stock market, which should provide an opening to address the states high levels of poverty. Despite a booming economy, the poverty rate in California has remained high. It is high because the costs of housing and health care are high. “The official poverty measure, which is the standard by which eligibility for many safety net programs is determined, does not take high housing costs into account. As a result, safety net programs are less effective at reducing poverty in California. 36.4% of state residents were poor or near poor in 2017” (Public Policy Institute of California). Our coalition hopes that the State of California will respond to the main drivers of poverty in California, housing and health care costs. Although California’s median household income is slightly above the national median of $63,179, a third of its workers make less than $15 an hour. Meanwhile, a multi-million-unit shortage of housing grows worse by the moment, driving its costs ever-upward.
S.B. 50, is seen as one of the most ambitious efforts to ease a chronic shortage of homes in the most populous U.S. state. Decades of bad government policy and local opposition to building have pushed real estate values beyond reach for millions of Californians. The median house price is almost $600,000, more than twice the national level. Housing is not the only cost factor. Premiums under the Affordable Care Act (ACA) were higher in California than in the rest of the nation. California pays significantly more for common health care services than the rest of the country, and the gap has been widening. Large companies predict the total cost of workplace health-care coverage to reach an average of $15,375 next year, according the National Business Group on Health. That’s up from $14,642 in 2019. These ridiculous prices for health care and housing are pushing many low income Californians further into poverty. Meanwhile, “We estimate the Legislature will have a $7 billion surplus available to allocate in the upcoming budget process, and in addition, will build an $18.3 billion balance in the state’s rainy day fund by the end of 2020‑21. With more than a decade of economic expansion, coupled with deliberate legislative action to put the budget on better footing, the California budget is in good condition” (LAO’s California's Fiscal Outlook).
Working full-time at a minimum wage of $15 an hour (the California statewide minimum wage in 2022), a person would be able to afford $780 per month in housing costs. If they are paying more they are defined as housing cost burdened by HUD. People unable to work who are living with disabilities receive a maximum grant of $931.72 to pay for housing, food and all other expenses. “Can you imagine living off of $900 per month? I do. I do not have a choice. It’s impossible to find a place to live and pay my bills. An increase in SSI means maybe I can live in my own place instead of my parents’ house. As a 31-year-old, I desperately want a place of my own. An increase means the ability to afford more nutritious food. Currently, I rely on my EBT card which has been a blessing since it began in June, 2019. I feel that society wants to keep people with disabilities in a place of poverty with little chance of an improvement in our quality of life Increasing SSI is a way of acknowledging we are people and our lives have value.-Dina Garcia (CALIF).
With a functioning social safety net, there would be fewer homeless people cycling in and out of local jails making more resources available so people could get affordable housing, mental health and addiction treatment. Fewer Californians would be bankrupted by cripaling medical debt if we had a single payer health system like they do in all the countries that pay a lot less and live longer. That would mean more Californians benefiting from and contributing to the booming economy instead of draining county health department budgets.
We also applaud the proposed expansion of Medi‑Cal coverage and In‑Home Supportive Services to seniors aged 65 and older, regardless of immigration status. While we would like all people, poor, middle income and rich alike, to be able to go to a doctor when they are sick, like in those countries where they pay less and live longer. This is an important and laudable step in the right direction.
California Partnership also applauds the inclusion of $200 million for the Medi-Cal Healthier California for All program but it is mostly a one time spend and not an ongoing commitment. The success of the Whole Person Care pilots and Health Homes are demonstrative of the real financial costs of not investing in a safety net. How many studies and commissions do we need to confirm that people who live in a house use the emergency room less? Now we need to get the counties to qualify people for these programs and spend the money on housing people and not just bank the money and then send it back to the state. In San Bernardino County's in Health and Sanitation and Public Assistance budgets, they budgeted but did not spend $201,243,000 and $44,983.000 respectively. “$221,917,000 between estimated revenues and actual revenues was caused by the receipts of aid from other governments, revenues from use of money and property, and taxes exceeding estimates; offset by a negative variance in charges for current services primarily due to the reclassification of the matching reimbursement received by the Health Administration budget unit for intergovernmental transfers to cover the required local match for various healthcare programs from the State on behalf of the Medical Center” (San Bernardino County Comprehensive Annual Financial Report Fiscal Year Ended June 30, 2019). This money needs to be used to serve the people, not rolled into another budget and not spent again next year
Los Angeles County’s economy is larger than that of 44 states and all but 21 countries. The County serves as the central trade district for the western United States and a gateway to the Asian economies, as it has evolved into a leader in international commerce and investment. The economic recovery is expected to continue, with several sectors of the local economy experiencing growth. Yet, L.A. County's actual 2018 public assistance expenditures were $728 million lower than the final budget. Salaries and employee benefits savings of $143 million were due to hiring delays and vacancies. Vendor and assistance payments for social services and children and family programs were lower than budgeted by $519 million (2018 Comprehensive Annual Financial Report (CAFR) of the County of Los Angeles). We hope that the governor and legislature will recognize that we need long term investment in our safety net and not just one time supplemental. Counties and cities can make longer term plans and more informed decisions. “The lack of adequate healthcare leads to social crisis far beyond mental and physical illnesses. The main reason for bankruptcy filings is huge medical bills that a family will never be able to pay. People face the choice of paying for their medicine or other basic needs and often end up homeless. Although affordable housing and a living wage is needed for everyone, without healthcare for all, including mental health services, living in Los Angeles County is still unaffordable. With healthcare for all the landscape of homelessness and other social ills would change,” San Gabriel Valley Progressive.
One glaring inexplicable oddity in the Governor's proposal is the $700 million dollar increase in the Department of Corrections budget. According to the Adult Inmate and Parolee Population–Compared to the 2019 Budget Act projections, the adult inmate average daily population is projected to decrease by 1,216 in 2019-20 and decrease by 2,155 in 2020-21, to a total of 124,655 and 123,716, respectively. That and the budgeted $0 for the Division of Juvenile Justice, because that has been transferred to the Health and Human Services Agency reduces the need by a further $264 million makes the increase from $15.8 billion (2019- 20) to $16.5 billion baffling.
Governor Newsom expressed an urgent concern about California’s deadly jail overcrowding and is pursuing state oversight to local jails. While oversight may be necessary to hold sheriff accountable to preventing harms in local jails, harms from overcrowding needs to be addressed by moving forward with population reductions via ending pretrial detention and preserving the presumption of innocence, as well as implementing recent sentencing reform to impact people in local jails, including the repeal of the one-year enhancement for prior felony convictions (Weiner- 2019) and the repeal of the three-year enhancement for prior drug convictions (Mitchell- 2017). California must divest from expensive and ineffective policies of racist mass incarceration in order to invest in our communities. ~ Amber-Rose Howard, Californians United for a Responsible Budget.
All of Us or None would like to see more funding for prevention and diversion programs and less money spent on incarceration. We want money in the budget put toward breaking down the 48,000 barriers faced by people with convictions. Provide equal access to living wage jobs through job development, training, affordable housing through redefining or the elimination of crime free housing and the creation of policies that end discrimination based on convictions and evictions. All the aforementioned items are parts of a vicious cycle that keeps approximately 20% of Riverside County's community in jeopardy of homelessness, recidivism and a breakdown in family reunification. Everyone deserves equal access to our communities resources. ~ Erica Smith, Riverside AOUON
We need a budget that ensures that everyone- from workers making the minimum wage to people who are unable to work and depend on SSI- never have to choose between food or paying rent. The state has the resources to start that plan today- right now- and begin to build a community that we can all be proud of.
Public Policy Institute of California:https://www.ppic.org/publication/poverty-in-california/
LAO’s California's Fiscal Outlook: https://lao.ca.gov/Publications/Report/4111
U.S. Census Supplemental Poverty Measure: 2018: https://www.census.gov/content/dam/Census/library/publications/2019/demo/p60-268.pdf
San Bernardino County Comprehensive Annual Financial Report Fiscal Year Ended June 30, 2019: http://www.sbcounty.gov/atc/DBMFiles/CAFR_2019_39068282619.pdf
National Business Group on Health:https://www.businessgrouphealth.org/who-we-are/newsroom/press-releases/large-employers-double-down-on-efforts-to-stem-rising-us
Adult Inmate and Parolee Population–Compared to the 2019 Budget Act: http://www.ebudget.ca.gov/2020-21/pdf/GovernorsBudget/5210.pdf