Disability Rights California’s Summary of The Governor’s Proposed 2024-25 Budget

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Jan 31, 2024

Disability Rights California’s Summary of The Governor’s Proposed 2024-25 Budget

Governor Newsom released his 2024-25 proposed budget on January 10, 2024. The Governor’s Budget proposes $291.5 billion in total spending. This year’s budget projects an estimated deficit of $37.9 billion. The deficit poses challenges for expanding services and programs for people with disabilities; however, it avoids significant cuts to certain programs by tapping into reserves and through some delays in spending. A summary of the 2024-25 budget can be found at  https://ebudget.ca.gov/budget/2024-25/#/BudgetSummary.

Disability Rights California appreciates that the Governor’s proposed Budget reflects a commitment to invest in implementing the Master Plan for Aging (MPA) and maintains critical safety net programs that millions of older adults and persons with disabilities rely on, such as the elimination of the asset test in Medi-Cal, expanding Medi-Cal coverage regardless of immigration status, and increasing the grant level for SSI/SSP.

While we are encouraged that the Administration plans to increase slots in the Assisted Living Waiver and the Home and Community-Based Alternatives (HCBA) Waiver, this is still inadequate to clear the waiting list. It is also inadequate to accommodate the increase in consumer need for the program, as evidenced by the precipitous rise in recipients and applicants between 2022-2023. We urge the Administration to increase the slots to accommodate all demand, as well as allocate funding to ensure the Department can process applications at an adequate pace. We look forward to partnering with the Administration to this end. We also urge that the previous commitment to reform the Medi-Cal share of cost program be implemented on-time beginning January 1, 2025.

We are disappointed that the Governor proposes delaying over one billion dollars for critical housing programs impacting Californians with disabilities but maintains funding to displace individuals living in encampments. It is imperative the Administration prioritize funding housing programs to match the growing need, while upholding the civil rights of those they impact.

We are pleased to see the Administration prioritizing the needs of Californians with intellectual and developmental disabilities (IDD) through the launch of the new Master Plan for Developmental Services. The Master Plan represents a historic opportunity to break down silos across state and local systems and meaningfully advance quality, equity, and accountability within our service delivery system. However, the current budget deficit and disappointing proposal to delay the final phase of provider rate increases also underscores the urgent need to get the most out of limited state funds. In that endeavor, and in the Master Plan for Developmental Services, we urge the state to prioritize and invest in the outcomes that matter most to people with IDD. DRC looks forward to working with the Administration, in partnership with disabled people served by the system, to more fully realize the vision of the Lanterman Act and ensure its sustainability for years to come. We also look forward to engaging with the Governor and Legislature as the proposed Budget moves forward and DRC will continue to advocate to keep programs and services utilized by people with disabilities in place.

The following are some of the key items in the proposed Budget impacting persons with disabilities and the programs that assist them:

Table of Contents

CARE Act Community Assistance, Recovery & Empowerment (CARE) Act

Proposed CARE Court funding for the Department of Health Care Services includes, for county funding, $105 million in 2024-25, $145 million in 2025-26 and $153 million in 2026-27 and ongoing. Funding to support CARE Act implementation includes $6 million in 2024-25 and ongoing.

Proposed CARE Court funding for the Judicial Branch includes $55.3 million in 2024-25, and $68.5 million ongoing for program administration. Of these amounts, $51.7 million in 2024-25, and $64.5 million ongoing are intended to support public defender and legal service organizations to represent people subject to court jurisdiction.

Department of Developmental Services (DDS)

The Department of Developmental Services (DDS) budget includes $15.3 billion total funds ($10 billion GF). DDS estimates that they will serve 458,000 individuals in 2024-2025. The proposed Budget includes:

  • The creation of the Master Plan for Developmental Services, which will develop goals to improve the developmental services system.
  • Two spending delays:
    • A one-year delay of the service provider rate reform implementation (now July 1, 2025).
    • A two-year delay of the Preschool Inclusion Grants. 
  • $157.3 million over a five-year period for infrastructure expansion at Porterville Developmental Center.

Department of State Hospitals (DSH)

The proposed Budget includes $3.4 billion ($3.2 billion General Fund and $165.4 million other funds). DSH administers five state mental health hospitals, the Forensic Conditional Release Program, the Sex Offender Commitment Program, and the evaluation and treatment of judicially and civilly committed patients. The Administration estimates the population served by the hospitals and other programs will reach a total of 9,314 by the end of 2024-25, with 5,839 people committed to one of the five hospitals (Atascadero, Coalinga, Metropolitan/Norwalk, Napa and Patton), 2,496 participating in one of DSH’s contracted non-hospital competency restoration or community-based treatment programs and 979 participating in DSH’s Conditional Release Programs (CONREP).

Education

Proposition 98 funding levels are expected to decrease by approximately $11.3 billion over the next three years. $5.7 billion in withdrawals from the Proposition 98 rainy day fund will narrow the funding gap and leaves $3.8 billion in reserves at the end of 2024-25. Tapping into the rainy day fund also maintains funding for the Local Control Funding Formula. Total spending per pupil is proposed to be reduced from $23,791 to $23,519.

Pre-K Education

The Governor’s proposed Budget:

  • Maintains funding for Transitional Kindergarten programs by tapping into reserve accounts but makes reductions in Pre-K programs.
  • Includes $53.7 million to support reimbursement rate increases previously supported by federal stimulus funding. These funds are in addition to approximately $140.6 million General Fund and $206.3 million Proposition 98 General Fund in the 2023 Budget Act to support a recently ratified collective bargaining agreement with childcare providers.
  • Delays $550 million in funding to California Preschool, Transitional Kindergarten and Full-Day Kindergarten Facilities Grant Program, which supports the construction or retrofit of transitional kindergarten facilities.

K-12 Education

The revised 2024-25 cost-of-living-adjustment (COLA) for teachers is significantly lower than currently reflected in multiyear projections by school districts and the California Department of Education. The Governor’s proposed COLA is at .76 percent when it was projected to be at 3.5 percent. This will make it more challenging to recruit and retain qualified teachers, as school districts transition away from the one-time Covid-relief federal funding.

Early Literacy

The 2023 Budget required Local Education Agencies to begin screening students in kindergarten through second grade for risk of reading difficulties, including dyslexia, by the 2025-26 school year. The Budget proposes $25 million ongoing Proposition 98 General Fund through the K-12 Mandate Block Grant to continue these screenings.

Universal School Meals

The proposed Budget maintains existing funding to continue implementation of the universal school meals program.

Modernizing Schools

Reduced school facilities funding: With Proposition 51 school facility construction bond funds exhausted, the Governor’s proposed 2024 budget provides $375 million to this effort. This marks a $500 million reduction in funding since last year.

The proposed Budget does not specify any specific changes to special education programs but provides a modest .76 percent COLA for special education instructors.

Students Experiencing Homelessness

The Budget proposes an increase of $1.5 million ongoing to maintain Homeless Education Technical Assistance Centers, which identify homeless children and coordinate services for them.

Higher Education

The proposed Budget provides modest funding increases to the UC, CSU and community college system, but reduces funding for the Student Aid Commission and eliminates the Student Housing Revolving Loan Fund.

Specifically, the proposed Budget:

  • Suspends $300 million in funding for the student housing program and takes away $194 million of $200 million already appropriated to it.
  • Eliminates a planned one-time $289 million spending for the Middle Class Scholarship program and reduces funding to the California Student Aid Commission by 3.5 percent.

California Community Colleges

The proposed Budget provides a modest .76 percent COLA for staff which is offset by withdrawing from the Proposition 98 reserve fund.

Foster Youth

The proposed Budget: 

  • Reduces funding to the Housing Supplement for Foster Youth in Supervised Independent Living Placements by $195,000 in 2024-25 and $25.5 million in 2025-26 and ongoing.
  • Increases COLA for foster care providers by .76 percent.
  • Includes $12 million in 2024-25 to make automation changes to the foster care payment structure, with full implementation by 2026-27. The new rate system for foster care placements will focus on the child’s individual level of needs, rather than the placement type.

Health and Human Services

The proposed Budget withdraws $900 million from the Safety Net Reserve and delays $74 million General Fund until 2025-26 and 2026-27 for the Health and Human Services Innovation Accelerator Initiative.

Medi-Cal

The proposed Budget maintains $1.4 billion ($1.2 billion General Fund) in 2023-24, $3.4 billion ($2.9 billion General Fund) in 2024-25, and approximately $3.7 billion ($3.2 billion General Fund) ongoing to fully implement the Medi-Cal expansion to income eligible adults aged 26-49 regardless of immigration status, which began January 1, 2024.

Proposes an increase to the 2023-approved Managed Care Organization Tax (MCO Tax) to realize $20.9 billion in total funding to the state, an increase of $1.5 billion compared to the 2023 version of the tax.

Proposes $12.9 billion in MCO Tax revenue to support the Medi-Cal program and balance the budget.

Proposes $8 billion in MCO Tax revenue for targeted Medi-Cal rate increases.

Proposes $2.8 billion ($1.2 billion MCO Tax) in 2024-25, approximately $6.5 billion ($2.7 billion MCO Tax) in 2025-26 for targeted Medi-Cal provider rate increases, consistent with the 2023 Budget Act which includes $727 million ($291 million MCO Tax) annually for rate increases effective January 1, 2024.

Includes $9.5 million ($4.1 million General Fund) in 2024-25 increasing annually to $78 million ($22.8 million General Fund) in 2027-28 to establish the wellness coach benefit in Medi-Cal effective January 1, 2025.

Maintains $200 million ($100 million General Fund) in 2024-25 for the California Reproductive Health Access Demonstration Waiver to support access to reproductive health services, to be implemented no sooner than July 1, 2024, and $85 million of General Fund to be replaced with federal Designated state Health Program funds by 2026-27.

Includes $2.3 billion ($499 million General Fund) in 2023-24 over the 2023 Budget Act to reflect an increase in estimated Medi-Cal caseload of 583,000 for a total of 14.8 million. This reflects a higher than expected number of individuals remaining eligible after eligibility determinations.

Reduces $193.4 million ($77.1 million Proposition 56) in 2024-25 for supplemental payments to Medi-Cal providers, originally funded solely by Proposition 56, due to declining revenue from Proposition 56 and the challenge with backfilling this reduction with General Fund given the General Fund deficit.

Includes $907 million ($192.6 million General Fund) for all Proposition 56 supplemental payments, inclusive of $465.2 million for physician services. Some providers who will receive MCO Tax rate increases will still receive net rate increases.

Healthier at Home Pilot Program

The proposed Budget reverts $11.9 million General Fund for the Healthier at Home Pilot Program.

Home and Community-Based Services Waiver

The Budget proposes to increase slots in the Home and Community-Based Services Waiver and Assisted Living Waiver, resulting in $10.8 million net General Fund savings in 2024-25.

As of November 2023, there is a 4,292 person waitlist for services, and 8,829 people currently on the HCBA Waiver. DHCS estimates that even with the additional 1800 slots per year, it can only release approximately 100 slots per month due to staff capacity in the department.

Housing and Homelessness

Housing

The budget proposes $1.2 billion in state housing programs reductions or delays. The proposed budget:

  • Delays $50 million for the Housing and Disability Advocacy Program to 2025-26.
  • Delays $65 million General Fund for the Home Safe Program to 2025-26.
  • Delays $80 million General Fund for the Bringing Families Home Program to 2025-26.
  • Reverts $300 million Regional Early Action Planning Grants.
  • Claws back $250 million for the Multifamily Housing Program, leaving $75 million.
  • Reduces funding for the Foreclosure Intervention Housing Preservation Program by $247.5 million over three years.
  • Reverts $200 million for the Infill Infrastructure Grant Program.
  • Reverts $152.5 million for the CalHome Program.
  • Claws back $50 million for the Veteran Housing and Homelessness Prevention Program.
  • Reduces funding for housing navigators by $13.7 million.

Behavioral Health Bridge Housing Delay

The proposed Budget shifts $265 million from the Mental Health Services Fund appropriated in the 2023 Budget Act to the General Fund in 2024-25 due to lower-than-projected Mental Health Services Act revenues and a delay of $235 million General Fund originally planned for 2024-25 to 2025-26.

Homelessness

The proposed budget maintains $3.4 billion in 2024 funding in response to homelessness. This includes $400 million to continue displacing those living in encampments, and $1 billion for a fifth round of Homeless Housing, Assistance, and Prevention (HHAP) grants.

Of the $1 billion in total HHAP grant funding, $260 million of funding will be delayed from 2023-24 to 2025-26.

In addition, the Budget proposes funding delays to the following programs:

  • Behavioral Health Continuum Infrastructure Program: Delays $140.4 million from 2024-25 to 2025-26.
  • Behavioral Health Bridge Housing: Shifts $265 million from the Mental Health Services Fund appropriated in the 2023 to the General Fund and delays of $235 million of those funds to 2025-26.
  • Home Safe Program: A delay of $65 million for the Home Safe Program to 2025-26. 

In-Home Supportive Services (IHSS)

The proposed Budget includes $24.3 billion ($9 billion General Fund) for the IHSS program in 2024-25. The Budget maintains investments in provider wage increases, a permanent provider back-up system, and the full-scope Medi-Cal expansion to IHSS undocumented recipients of all ages including the recent expansion for ages 26 to 49, as of January 1, 2024.

Mental Health

The California Behavioral Health Community-Based Organized Networks of Equitable Care and Treatment (BH-CONNECT) Waiver

The proposed Budget maintains $7.6 billion ($350.4 million General Fund, $87.5 million Mental Health Services Fund, $2.6 billion Medi-Cal County Behavioral Health Fund, and $4.6 billion federal funds) for the Department of Healthcare Services and the Department of Social Services to implement the BH-CONNECT Demonstration, effective January 1, 2025.

Behavioral Health Continuum Infrastructure Program Delay

The proposed Budget delays $235 million for the Behavioral Health Continuum Infrastructure Program and spreads the funding out over three years beginning with 2025-26.

Medication Assisted Treatment (MAT)

Medication Assisted Treatment (MAT) is included in the Budget as part of the $270 million proposed in 2024-25 for the Integrated Substance Use Disorder Treatment (ISUDT) Program, an ongoing program at the California Department of Corrections and Rehabilitation that screens individuals for substance use disorders, and provides Medication Assisted Treatment (MAT), and other cognitive behavioral interventions.

Public Safety

California Department of Corrections (CDCR)

  • COVID-19 Direct Expenditures—$141.8 million one-time General Fund in 2023-24 to enable CDCR to continue taking proactive measures and precautions to protect the incarcerated population and staff and mitigate the impacts of COVID-19 in state prisons. This includes resources to support staff and incarcerated individual testing ($89.2 million), personnel services ($37.5 million), and medical registry costs ($15.1 million).

Prison Closures

  • On December 6, 2022, CDCR announced its plan to terminate the lease of the California City Correctional Facility, its last privately-owned prison facility, by March 2024, ending its use as a state prison. CDCR also announced the planned closure of Chuckawalla Valley State Prison (CVSP) in Blythe by March 2025.
  • CDCR announced the deactivation of specified facilities within six prisons by the end of 2023. The facilities are located within the California Rehabilitation Center, California Institution for Men, California Correctional Institution, Pelican Bay State Prison, the California Men’s Colony, and the Folsom Women’s Facility within Folsom State Prison. In total, CDCR estimates $150 million in ongoing General Fund savings as a result of these facility deactivations.

Local Public Safety

  • Combatting Organized Retail Theft and Other Crimes—$564.4 million General Fund was invested over three years to bolster local law enforcement efforts to address retail theft and other crimes.

Victim Services

  • Reparations for Victims of Forced Sterilization—$7.5 million one-time General Fund was provided to establish the Forced or Involuntary Sterilization Compensation Program to provide compensation to individuals who were sterilized pursuant to eugenics laws between 1909 and 1979, or sterilized while imprisoned after 1979.
  • Domestic and Sexual Violence, Human Trafficking, and Children’s Services— The Budget proposes $15 million one-time General Fund to expand domestic violence and sexual violence prevention efforts; $6.7 million ongoing General Fund to increase reimbursements to local law enforcement agencies to offset the cost of reimbursing qualified health care professionals, hospitals, or other emergency medical facilities for medical evidentiary examinations for all sexual assault victims; $30 million one-time General Fund over three years to expand human trafficking survivor support programs; and $11 million one-time General Fund to support the Family Justice Center Program providing services for victims and their children.
  • Domestic Violence: Death Review Teams (SB 863)—$1.5 million General Fund in 2023-24, and $1.1 million ongoing, to collect data on near-death domestic violence cases and prepare an annual report pursuant to Chapter 986, Statutes of 2022.

Supplemental Security Income / State Supplemental Program

The federal Supplemental Security Income (SSI) program provides a monthly cash benefit to individuals with disabilities, including children and adults, and individuals who are ages 65 and over who meet the program’s income and resource requirements. California adds to this benefit through the State Supplemental Program (SSP). The state-only Cash Assistance Program for Immigrants (CAPI) provides monthly cash benefits to low-income individuals with disabilities, including children and adults, as well as adults aged 65 and older who are ineligible for SSI/SSP due solely to their immigration status.

The proposed Budget includes:

  • $3.7 billion General Fund in 2024-25 for the SSI/SSP program, including CAPI. CAPI benefits are equivalent to SSI/SSP benefits and have residency and income eligibility requirements. The average monthly caseload in this program is estimated to be 1.1 million recipients in 2024-25.
  • A 3.2-percent federal SSI cost-of-living adjustment and maintains the 9.2-percent SSP increase, which took effect on January 1, 2024. These adjustments raise the maximum SSI/SSP grant levels to $1,183 per month for individuals and $2,023 per month for couples. 

Transportation

Safety Grade Separations

The proposed Budget maintains $350 million in approved funding for grade separation projects that support safety and accessibility improvements by separating the vehicle roadway from the rail tracks.