May 26, 2022

Image via iStock by artist RiverNorthPhotography

Children Now issued this statement in response to the Administration’s May Revision proposal:

We are proud that California leads the country in so many critical issue areas. Unfortunately, kids are not one of them. While we applaud the increased investments in a number of areas, including TK-12 and older youth mental health, much more is needed across the kids health, infant and toddler mental health, education (cradle to career), child welfare and economic security domains. The May Revise proposal fails to sufficiently leverage the unprecedented state surplus to significantly improve upon our current 34th state ranking in kids well-being. A prime example where substantially more investment is needed is child care, a sector decimated by the pandemic. That workforce – mostly women of color –  were essential workers over the last two years, and deserve the same additional funding as others who bravely served.

An overview of key child-related investments, broken down by issue area, can be found below.

 

EARLY CHILDHOOD

Children Now is appreciative of new investments that support the waiving of family fees, funding for dual language learners and students with disabilities, and one year of funding for child care rate increases, among other items. However, given the long-standing crisis within the child care system – a system essential to the recovery of the economy and ensuring safe and nurturing experiences for children – our child care providers need substantial additional short-term relief from the dual burdens brought on by the pandemic and rapidly increasing inflation – while long term, structural changes are made over the next year. The Governor’s May Revise budget also fails to include funding to extend or expand the current wage replacement rates for Paid Family Leave (PFL). Currently, individuals that need to take time to care for themselves or a loved one due to illness or bond with a new child receive between 60-70% of their weekly salary under the state’s PFL program – which deters low-income workers from using these programs in times of need. Finally, we are disappointed the $250 million request for early childhood mental health was not included; infants and toddlers are susceptible to trauma when their families and caregivers experience stress and challenging circumstances – and families with babies are currently experiencing unprecedented stress and economic pains. We will continue to fight for the full requests with our coalition partners over the coming weeks.

California State Preschool Program (CSPP)

• Added $10.8 million for a one-time/one-year waiver of family fees for CSPP
• Hold harmless for CSPP contractors on student attendance for the 2022-23 school year, ensuring that contractors receive the full funding allocated in their contracts.
• $34 Million More for State Preschool Program adjustment factors for students with disabilities and dual language learners—Increasing the costs to support revised State Preschool Program adjustment factors for students with disabilities and dual language learners from $197.8 million Proposition 98 General Fund and $110.6 million General Fund to $201.8 million Proposition 98 General Fund and $140.6 million General Fund, respectively.

Child Care

• Rates: The May Revision includes $413 million to support a full year of rate increases while the state continues to work with partners and stakeholders toward a single reimbursement rate structure.
• Child Care Spaces: Includes $270 million for 36,000 additional subsidized child care slots.
• Alternative Payment Program (APP) Capacity Grant—The May Revision includes $20 million to assist APPs in developing capacity to serve additional slot commitments.
• Hold Harmless: Proposes to reimburse voucher-based child care providers and preschool providers for authorized hours of care, includes $114M to reimburse providers based on enrollment, greatly reducing the administrative burden, and improving economic security.
• Family Fees: Includes $157.3 for 1 year extension of family fee waivers for state-subsidized preschool and childcare and development services from July 1, 2022, through June 30, 2023.
• Child Care and Development Infrastructure Grant Program: Includes $200.5 million in 2022-23 for minor renovation and repair focused on child care deserts and low-income communities.

Additional Proposed Investments in Early Childhood

• Eligibility for Early Start Early Identification & Intervention: The May Revision includes $6.5 million General Fund in 2022-23, increasing to $29.5 million General Fund in 2024-25, to support adjustments in identifying children with qualifying signs of developmental delays. This proposal includes statutory changes revising the Early Start qualification threshold from a 33 percent delay to a 25 percent delay in one of the specified assessment areas; separating communication delay assessments into expressive and receptive categories; and highlighting Fetal Alcohol Syndrome as a risk factor for intellectual and/or developmental delays. These changes are intended to engage families sooner with early intervention services. Following Early Start, and depending on subsequent assessments, some children may continue receiving services through Provisional Eligibility or Lanterman Act Services. In addition, the proposal includes $11 million General Fund one-time in 2022-23 to increase the resources currently available for Department of Developmental Services (DDS) to award regional centers and community-based organizations through its Service Access and Equity Grant Program, which focuses on supporting strategies to reduce disparities and increase equity in regional center services.

Maternal and Child Health and Mental Health

• Equity and Practice Transformation Grants: Building on the $400 million ($200 million General Fund) proposed in January, the May Revision proposes an additional $300 million ($150 million General Fund), available over five years, for Equity and Practice transformation payments. These payments will focus on advancing equity, addressing COVID-19 driven health disparities, and improving quality measures in children’s preventive, maternity, and behavioral health care.
• $100 million ($50 million General Fund) to further support early childhood-focused efforts, including grants focused on encouraging health care provider integration with other early-childhood focused programs.
• $200 million ($100 million General Fund) for grants and technical assistance to allow small physician practices to upgrade their clinical infrastructure, such as electronic health record systems, data collection and reporting capabilities, implementation of care management systems, and other activities that will allow the adoption of value-based and other payment models that improve health care quality while reducing costs. Children Now has provided the state with technical input and we are pleased to see the greater focus on early childhood and development.
• Doula Benefit—The May Revision proposes an increase to the maximum reimbursement rate per birth from an average of $450 to $1,094 per birth to better align with rates in other Medicaid programs as well as an implementation shift from July 2022 to January 2023. The estimated annual cost is $10.8 million ($4.2 million General Fund).

We look forward to engaging with the Administration and Legislature to make bold investments to advance investments in child care, a sector decimated by the pandemic.

 

TK-16 EDUCATION

The Governor’s May Revision reflected an additional $55 billion in General Fund revenues above the January revenue assumptions. This additional revenue results in a $19.6 billion increase in Proposition 98 funding for TK-14 (TK-12 and California Community Colleges). Much of the increase in funding is provided to school districts as discretionary funding which we support because school districts need that flexibility to ensure the stability of their current staffing.

Beyond the TK-14 education budget, most of the Governor’s proposals reflect two key factors: (1) caution about the future General Fund revenue picture so most of the additional money is spent on one-time purposes; and (2) because of the influence of the Gann spending limit, the proposal spends most of the new funding on expenditures that are exempt from the Gann spending limit including tax rebates, infrastructure, and state emergencies. Thus, there is little additional spending on high priority areas like child care and higher education.

For TK-14 education, the budget provides funding in areas that do not count toward the limit including:

• School Facilities
• Deferred Maintenance
• Infrastructure for Universal Meals program

Proposition 98 Increases $19.6 billion From January

In the May Revision, very few state programs see significant budget increases but TK-14 education is the exception with Proposition 98 funding increasing $19.6 billion above the Governor’s January proposal. While this increase is a combination of one-time and on-going funding, the total on-going budget for Proposition 98 in 2022-23 would be $110 billion, which is 17.7% higher than the $93.7 billion for the current fiscal year.

Education Rainy Day Fund Deposits Trigger District Cap on Reserves at Worst Time. A portion of the Proposition 98 funding must be deposited in an education rainy day fund. In total $9.5 billion will be deposited as part of this budget. For the first time, these state education rainy day fund deposit will trigger a 10% cap on school district reserves for all but small districts. At the end of last year, the average unified district had a 22.4% reserve. Between last summer’s and this summer’s budget, districts will receive over $70 billion in one-time funds. Ideally, districts would be able to hold some of these one-time funds in reserve. We believe districts should have the flexibility to spread those funds over multiple years so that they can use the funds to support higher staffing levels and have adequate needs assessment and planning time with community partners in order to make the best use of these one-time funds. Instead, districts will have to not only spend their share of the $70 billion, but also spend down their local reserves by the end of the 2022-23 fiscal year, exacerbating the boom/bust budget cycle for the districts.

TK-14 Historic Funding Increases 

This budget will continue the historic funding expansions provided in last summer’s budget and federal stimulus funds. Figure 1 shows the main Proposition 98 funding increases. The focus for on-going funding in the May Revision was additional funding for the Local Control Funding Formula.

Figure 1 TK-14 Proposition 98 On-Going Funding Increases ($ in Billions)

Programs	January Proposal	May Revision	Total $ Proposed
Expanded Learning	$3.4	$0.4	$3.8
Declining Enrollment	$1.2	$2.1	$3.3
LCFF Cost of Living Adjustment (COLA)	$2.1	$1.1	$3.2
LCFF Base Increase		$2.1	$2.1
Universal Meals	$0.6	$0.6	$1.2
Transitional Kindergarten	$1.0		$1.0
Special Education	$0.5		$0.5
Preschool	$0.4	$0.1	$0.5
Categorical Programs COLA	$0.4	$0.1	$0.5
Other Changes	$1.0	$1.4	$2.6
Community Colleges	$0.8	$0.4	$1.3
Total	$10.6	$8.3	$18.9

 

Local Control Funding Increases for COLA, Declining Enrollment and Base Increase 

The May Revision proposes $5.3 billion additional funding for the Local Control Funding Formula (LCFF) on top of the $3.3 billion proposed in January. This results in a combined $8.6 billion augmentation for LCFF. Based on the LCFF formula, approximately $1.6 billion of this increase will be distributed through the LCFF Supplemental and Concentration (S&C) grants targeting a higher level of service for low-income students, English learners, and foster youth. The additional LCFF funding will be provided through three different proposals. First, the cost-of-living adjustment (COLA) increases from 5.33% to 6.56%. On top of this COLA, the state will provide an additional $2.1 billion to increase the Base Grant amount (and resulting S&C increases) for an approximate 9.9% year to year increase. The third proposal is an expanded declining enrollment proposal (see below).

Declining Enrollment Proposal Expanded (Adds $2.1 billion). In the January budget, the Governor proposed expanding the protections for school districts with declining enrollment. Specifically, each district would annually receive LCFF funding based on the higher of: (1) current year attendance, (2) prior year attendance, or (3) the average of the three prior years. In terms of attendance, 2021-22 was particularly bad because of a combination of declines in enrollment and a spike in absences resulting from the Omicron variant surge. The 2021-22 average daily attendance (ADA) was down 8.7% from the prior year. In order to protect districts from the fiscal cliff that this would cause, the Administration is providing a one-time additional attendance hold harmless provision for 2021-22. This one-time option will allow a district to calculate their ADA by multiplying their 2021/22 enrollment times the historical chronic absence rate before the COVID-19 pandemic.

Other major Ongoing funding increases include:

• Increasing Expanded Learning Opportunity Program augmentation from $3.4 billion (January Budget) to $3.8 billion (May Revision). The augmentation is reported to fully implement the program and would provide $2,500 per low income, English learner, or foster youth. Beginning in 2023-24, all districts would be required to offer expanded learning to these targeted students as well as to all students in high concentration schools.
• Increase universal meal program augmentation from $596 million (January Budget) to $1.2 billion (May Revision) to maintain higher reimbursement rates as federal funding is scheduled to end in the near term. If federal funding universal waiver continues, then it is proposed that the funding increase augment the school kitchen infrastructure grants.

Flexible One-Time Grants and Expansion of Community Schools Focus of May Revision One-Time Proposals 

Figure 2 shows the May Revision proposes $19.3 billion in one-time Proposition 98 funding, which includes $8 billion in a flexible one-time grant that would be distributed on a per pupil basis. While districts would have full discretion on how to use the funds, the Governor suggests that the funds be used to address cost increases for the State Teachers Retirement System and Public Employees Retirement System and to prioritize “protecting staffing levels, addressing student learning challenges, and supporting the mental health and wellness needs of students and staff.” We will be seeking to change the distribution of these funds to have an equity component. The budget would also add $1.5 billion for community school multi-year grants. The State Board of Education is poised to grant the first set of community school grants at its May meeting next week. At that meeting, only schools with 80% or more students who are low income, English learners or foster youth would receive grants. There was strong interest in the application process, and this augmentation would ensure that more interested districts could receive funding in future grant rounds.

Figure 2 TK-14 Proposition 98 One Time Proposals ($ in Billions)

One-Time	January Proposal	May Revision Increase	Total
Flexible Block Grant		$8.0	$8.0
Career Pathways	$1.5		$1.5
Green Bus Grants	$1.5		$1.5
Community Schools		$1.5	$1.5
Deferred Maintenance		$1.8	$1.8
Expanded Learning Infrastructure – Arts and Music	$0.9	$0.1	$1.0
Literacy Coaches	$0.5		$0.5
Inclusive Early Education Expansion Program	$0.5		$0.5
Dual Enrollment Access	$0.5		$0.5
Residency Programs		$0.5	$0.5
STEM Professional Development		$0.4	$0.4
Declining Enrollment (2021-22 hold harmless)		$0.5
Community Engagement		$0.1	$0.1
Other Changes	$0.7	$ (2.3)	$ (1.5)
Community Colleges	$1.8	$0.8	$2.6
Total	$8.0	$11.3	$19.3

 

Transitional Kindergarten 

This fall, districts are expected to welcome the first expanded cohort (children who turn four between September and February) of Transitional Kindergarten (TK) students. With this first year of expansion now in the near view, the May Revision proposes making the following changes to the Transitional Kindergarten (TK) program from what was proposed in January:

• Based on a reduction in enrollment projections, a decrease in the amount of Proposition 98 “re-bench” to pay for the expansion of TK. The process of re-benching Proposition 98 is critical, as it increases the size of the pot of funds to be distributed, rather than keeping the size of the pot the same, while spreading out the funding among more students.
• Articulated a pathway for holders of a Child Development Permit – Teacher Level (or higher) with a bachelor’s degree to be a lead teacher in a TK classroom while pursuing their credential (until 2026). The change allows for these individuals to postpone enrollment in a credential program until July 1, 2024, which should be adequate time for teacher preparation programs to begin offering PK-3 Education Specialist credential programs.
• Requires California Department of Education to collect Transitional Kindergarten enrollment separately from Kindergarten within the California Longitudinal Pupil Achievement Data System.
• Adds financial penalties for school districts and charter schools which do not comply with the following requirements for TK:
  • Average TK class size of not more than 24 students
  • Student to adult ratios of 12:1
  • Properly credentialed teachers

Educator Workforce/Pipeline 

In recognition of the incredible demand for teachers and other student support staff and to address some of the implementation challenges of programs funded in prior budgets, the Administration proposed the following:

• Adding $500 million to the Teacher Residency Grant Program adding school counselors as an identified shortage area that can be addressed via the Teacher Residency Grant Program.
• Expanding the list of education careers that can apply for the Golden State Teacher program to include school counselors, social workers, and psychologist candidates (pupil personnel services credential. Additionally, proposed changes would
  • Allow eligible students would be able to apply for the grant before they are enrolled in a professional preparation program;
  • Permit grantees to receive funds in more than one academic year (while preserving the $20,000 cap);
  • Removes the requirement for recipients to obtain a credential to serve in a high-need field while maintaining the service requirement to serve in a priority school for four years; and
  • Adds more robust reporting and evaluation requirements to include qualitative and quantitative measures and efficacy of the program in recruiting and retaining educators.
• Establishing a Teacher Residency Statewide Technical Assistance Center using one-time general funds totaling $20 million. Funds will be allocated to the Commission on Teacher Credentialing (CTC) which will select a local education agency (LEA) to serve as the technical support assistance center. Funds may be expended through June 20, 2029.
• Adding early education and child development to the Golden State Pathways Program.
• Appropriating $15 million to the CTC for the Reading and literacy Supplementary Authorization incentive Grant Program to support the preparation of credentialed teachers to earn a supplementary authorization in reading and literacy. Funding is available for encumbrance until June 20, 2017.
• Funding nine positions at the Commission on Teacher Credentialing to support the Roadmap to Educational Careers Initiative.
• Adding finding for four positions at CTC to support data gathering around California’s PK-12 education workforce, reporting and analysis for Cradle-to-Career data reporting, teacher grant program reporting, and the California Statewide Assignment Accountability System, including its intersections with the California Department of Education’s federal Every Student Succeeds Act reporting, the School Accountability Report Card, and data reporting for LCFF and the Local Control and Accountability Plans.

Educator Professional Learning 

For the first time in a decade, the May revision proposes a targeted investment in a statewide systemic professional learning system to support STEM education, TK-12. The Governor proposes $385 million for CDE to allocate to county offices of education to generate and disseminate professional learning opportunities for all PK – 12 teachers aligned with NGSS, the soon to be adopted California Mathematics Framework, the Computer Science Standards, and the math and science domains of the California Preschool Learning Foundations (currently under revision). Funds may be encumbered until June 30, 2027. Of these funds, $35 million will be allocated to the Fresno County Superintendent of Schools to partner with a statewide collaborative to support math and science instruction PK-3. $50 million will be allocated to a county office of education to coordinate with existing professional development initiatives with a focus on math and science education in grades 4 – 12. Finally, this proposal allocates $300 million to be distributed via the Educator Effectiveness Grant Fund program, and prioritizing science, STEM, math, and computer science.

Additional proposed investments and modifications include:

• $15 million in funding over three years for the Educator Workforce Investment Grant: Computer Science.
• $15 million in funding for the Educator Workforce Investment Grant for supporting professional learning for teachers and paraprofessionals statewide in Universal Design for Learning (UDL) and English Learners, including integrated language development within a across content areas, building and strengthening capacity to implement the EL Roadmap and bilingual and biliterate proficiency.
• Changing the deadline for LEAs to approve a plan for expending Educator Effectiveness Grant funds (2021/2022 budget) from December 30, 2021, to March 31, 2023.

Expanded Learning/After School 

As noted above, the May revision proposes an additional $400 million, bringing total 22/23 funding to $3.8 billion. While the program maintains its focus on students from low-income families, students in foster care, and English learners, the Administration proposes a few changes to the Expanded Learning Opportunities Program as follows:

• Adds an additional year for districts to implement Expanded Learning Opportunities Programs (ELO-P). Full implementation must be in place by 2023/2024 in order to receive apportionment.
• Allocates to all LEAs $2,500 per “unit.” Units are calculated by multiplying an LEA’s K-6 ADA times the percentage of the LEA’s students from low-income families, English learners, and youth in foster care.
• Reduces the per unit funding LEAs receive for the ELO-P program if there are not enough funds for the program at full implementation.
• Reduces from nine to eight hours of combined instructional time, recess, lunch, and in-person before and after school expanded learning opportunities for frontier designated schools.
• Adds three staff development days to the program.
• Defines what is meant my “provide access” and “offer” within the context of the ELO-P program and an LEAs obligation to meet the requirements of the program.

English Learners, Dual Language Learners, and Bilingual Education 

The May Revision provides an additional $15 million one-time Proposition 98 General Fund, to continue the work of the EWIG in areas of special education and support for English Learners. In the final budget agreement between the Administration and the Legislature, we hope to see increased investments that support distinct bilingual teacher investments, including:

• Funding to expand the California State University system’s bilingual authorization programs, hire additional faculty, and build student enrollment.
• Investing in another cohort of teachers and paraprofessionals for the Bilingual Teacher Professional Development Program. This investment would allow the recruitment of credentialed teachers who are bilingual and interested in obtaining their bilingual authorization, thus improving the quality of bilingual instruction for bilingual students.

Deferred Maintenance ($1.8 billion)

Provides funds to local education agencies (LEAs), which includes school districts, county offices of education and site-based charter schools. Each LEA will receive a minimum of $100,000 with the remainder of funds distributed on an unduplicated count of low-income, English learner and foster youth students. We are encouraged by the equity-based formula used for this proposal. These funds will also be exempt from the Gann spending limit because of the infrastructure exemption.

Community Engagement Initiative ($100 million)

Community engagement is a core component of the local control governance structure. The May Revision would provide an additional $100 million to build the capacity in districts to engage their communities in local planning and improvement efforts. It would build on a program started in the 2018 budget to disseminate best practices.

California Community Colleges 

The May Revision reflects the continuation of the multi-year roadmap for the California Community Colleges announced in the Governor’s January budget proposal, focusing on equity and student success, enhancing the system’s ability to prepare students for California’s future. The roadmap builds upon existing efforts taken by colleges toward meeting the goals established in the system’s Vision for Success and establishes shared expectations of the community college system for fiscal year 2022-23 and beyond. The roadmap is intended to work in tandem with the University of California (UC) and California State University (CSU) compacts to increase transfer capacity and streamline transfer pathways between the segments.

The May Revision includes funding to re-engage students that left the system during the pandemic and to stabilize community college operations given enrollment declines due to the pandemic. These investments also align with the roadmap:

• Base Increase—An increase of $250 million ongoing Proposition 98 General Fund to increase the Student Centered Funding Formula’s (SCFF) funding rates for the base, supplemental, and success allocations. Additionally, the May Revision proposes $125 million ongoing Proposition 98 General Fund to augment the Formula’s basic allocation within the base allocation.
• Discretionary Block Grants—An increase of $750 million one-time Proposition 98 General Fund to community college districts for discretionary block grants to address issues related to the pandemic and to reduce long-term obligations.
• Foster Youth Support Services—An increase of $10 million ongoing Proposition 98 General Fund, above what was provided in the Governor’s January budget proposal to expand availability of foster youth support services offered by the NextUp program.
• Student Equity and Achievement—An increase of $25 million ongoing Proposition 98 General Fund for an approximately five-percent increase to the Student Equity and Achievement program.
• Chancellor’s Office Support – The May Revision includes $2.6 million ongoing non-Proposition 98 General Fund to support shifting 10 positions proposed in the Governor’s January budget proposal for 2023-24 to 2022-23, as well as 7 additional positions to support the implementation of the Cradle-to-Career Data System, assist colleges with affordable student housing, and build capacity to accommodate the increase in contracts and reporting requirements. Combined with Governor’s January budget proposal investments, these augmentations provide the Chancellor’s Office a total of $3.9 million ongoing non-Proposition 98 General Fund for 26 positions in 2022-23, bolstering capacity to support the system.

University of California and California State University 

The May Revision maintains the Administration’s commitment in the higher education compacts for funding equivalent to a five-percent increase in base General Fund resources annually over five years for the University of California (UC) and the California State University (CSU), contingent on the ability of each segment to advance the shared goals of the compacts. Within the goals and commitments included in the compacts are the following shared priorities:

• Expand access to the UC and CSU by increasing California resident undergraduate enrollment by a combined total of more than 22,000 full-time equivalent students between 2023-24 and 2026-27, and ensure CCC transfer students comprise a significant share of this enrollment.
• Take measurable steps to eliminate equity gaps in graduation rates between Pell Grant recipients, underrepresented students, disabled students, and their peers.
• Substantially decrease non-tuition costs for students or increase availability of lower cost options for instructional materials, housing, food, and transportation.
• Take measurable steps toward an aspirational goal of offering every UC undergraduate a pathway for debt-free education by 2029-30.
• Increase intersegmental collaboration to benefit students, including support for implementation of the Cradle-to-Career Data System, adoption of an intersegmental common learning management system, use of a dashboard or similar tool to identify granular equity data trends to address equity gaps, an integrated admissions platform for all segments, and improved data sharing to support transfer students.
• Take targeted steps to increase the number of students prepared to enter careers in science, technology, engineering, and mathematics (STEM) fields; education, including early education, primary, secondary, and postsecondary education; technology; healthcare; climate action; and social work.
• Provide access to high-quality online course offerings for students who want to take coursework in an online learning modality.

 

HEALTH

In the revised FY 2022-23 budget proposal released on May 13 with a $97.5 billion operating surplus, the Newsom Administration appears to have maintained the January proposals that support children’s health. In bringing greater focus to closing disparities and equitably meeting the needs of children and youth of color, the proposal made these additional adjustments:

Children’s Behavioral Health

Addressing Urgent Youth Mental Health Needs. In response to our coalition request to prioritize suicidality and the urgent needs of Black and brown youth, due to the pandemic, the May Revision includes $290 million General Fund one-time investments to implement a multi-pronged approach to address the urgent youth mental health crisis. While the Governor has not declared a youth mental health emergency, the May Revision does allocate resources to the emergency. Specifically:

1. Youth Suicide Prevention Program—$40 million General Fund to develop and implement a data-driven targeted community-based youth suicide prevention program for youth at increased risk of suicide such as Black, Native American, Hispanic, and foster youth.
2. Crisis Response—$50 million to provide grants to pilot school and community-based crisis response and supports following a youth suicide or youth suicide attempt and pilot a new approach of designating youth suicide and youth suicide attempts as a reportable public health event, which would trigger screening and resource connections at the local level for the impacted community.
3. Wellness and Mindfulness Programs—$85 million over two years for grants for wellness and mindfulness programs in schools and communities and expansion of parent support and training programs.
4. Video Series—$15 million to develop and distribute a video series for parents to build their knowledge, tools and capacity to support the behavioral health of their children.
5. Career Development—$25 million to identify and support the early career development of 2,500 highly talented and culturally diverse high school students interested in mental health careers.
6. Assessment and Intervention—$75 million for next generation digital supports for remote and metaverse based mental health assessment and intervention.

We applaud the Governor for doing more to address the immediate needs of youth mental health and the explicit focus on Black, Native American, Hispanic, and foster youth. We will work with the Administration to ensure these dollars are available to communities, quickly.

Unfortunately, infants and toddlers were still not prioritized. We will continue to push on this issue, as we believe a $250 million investment as part of the Children & Youth Behavioral Health Initiative is crucial to supporting babies. See a recent CalMatters article on this issue, here.

Finally, the State is reporting it has not exceeded the Gann Limit, and is in fact, $2.6 billion below the Gann limit. We believe this means there can be additional funding for kids.

Medi-Cal Coverage & Care for Children

• Equity and Practice Transformation Grants. Building on the $400 million ($200 million General Fund) proposed in January, the May Revision proposes an additional $300 million ($150 million General Fund), available over five years, for Equity and Practice transformation payments. These payments will focus on advancing equity, addressing COVID-19 driven health disparities, and improving quality measures in children’s preventive, maternity, and behavioral health care. The May Revision proposes $100 million ($50 million General Fund) to further support early childhood-focused efforts, including grants focused on encouraging health care provider integration with other early-childhood focused programs. Additionally, the May Revision proposes $200 million ($100 million General Fund) for grants and technical assistance to allow small physician practices to upgrade their clinical infrastructure, such as electronic health record systems, data collection and reporting capabilities, implementation of care management systems, and other activities that will allow the adoption of value-based and other payment models that improve health care quality while reducing costs. Children Now has provided the state with technical input and we are pleased to see the greater focus on early childhood and commitment to equity. However, we continue to urge the State to explicitly include dental providers in the list of providers eligible for grants.
• Health Enrollment Navigators Project. The May Revision includes $60 million ($30 million General Fund), available over four years, to continue the Health Enrollment Navigators Project. Health enrollment navigators help eligible families enroll in coverage and retain Medi-Cal coverage by assisting with annual renewals, reporting updated contact information, and engaging in outreach regarding application assistance and enrollment. DHCS has estimated that between 2-3 million Californians could lose coverage after the end of the public health emergency so these funds will help ensure children and families get the supports they need from trusted entities to stay covered.
• Changes Following the End of the Public Health Emergency. With the federal COVID-19 Public Health Emergency (PHE) currently set to expire on July 15, 2022, the May Revision proposes $146 million ($73 million General Fund) over two fiscal years for additional county workload costs to support their work performing Medi-Cal eligibility determinations; $25 million ($12.5 million General Fund) for a media and outreach campaign to encourage Medi-Cal members to update their contact information so that counties can facilitate retention or enrolment in health coverage; and $176.5 million ($71.2 million General Fund) to permanently extend flexibilities, including: separate payments to Federally Qualified Health Centers for COVID-19 vaccinations, and increases in reimbursement rates for oxygen and respiratory durable medical equipment, among others.
• Doula Benefit. The May Revision proposes an annual spending of $10.8 million ($4.2 million General Fund) to increase to the maximum doula reimbursement rate per birth from an average of $450 to $1,094 per birth to better align with rates in other Medicaid programs as delay in implementation from July 2022 to January 2023.

Other Programs Impacting Children’s Health

• Extension of Covered California Affordability Subsidies. As part of an $18.1 billion inflation relief package, the administration is proposing $304 million to extend health insurance premium assistance under Covered California for upwards of 700,000 Californians in families earning up to 600% of the federal poverty level ($166,500 annually for a family of four).
• Health Data Exchange. To support the Health and Human Services Data Exchange Framework (DxF) set to begin in July 2022, the May Revision includes a two-year, $50 million grant program for providers to participate in the data exchange, such as technical assistance to small or under-resourced providers, particularly small physician practices, rural hospitals, and community-based organizations, as well as education and technical assistance for entities new to health information exchange.
• Eligibility for Early Start Early Identification & Intervention. The May Revision includes $6.5 million General Fund in 2022-23, increasing to $29.5 million General Fund in 2024-25, to support adjustments in identifying children with qualifying signs of developmental delays. This proposal includes statutory changes revising the Early Start qualification threshold from a 33 percent delay to a 25 percent delay in one of the specified assessment areas; separating communication delay assessments into expressive and receptive categories; and highlighting Fetal Alcohol Syndrome as a risk factor for intellectual and/or developmental delays. These changes are intended to engage families sooner with early intervention services. Following Early Start, and depending on subsequent assessments, some children may continue receiving services through Provisional Eligibility or Lanterman Act Services. In addition, the proposal includes $11 million General Fund one-time in 2022-23 to increase the resources currently available for DDS to award to regional centers and community-based organizations through its Service Access and Equity Grant Program, which focuses on supporting strategies to reduce disparities and increase equity in regional center services.
• Supporting Nutrition Through School Meals. The May Revision includes an additional $611.8 million ongoing Proposition 98 General Fund to augment the state meal reimbursement rate sufficient to maintain meal reimbursement rates beginning in 2022-23. This higher rate of reimbursement will enable local educational agencies to continue offering higher-quality and more diverse meals for students. If the federal government extends the waiver that allows for the allocation of higher federal reimbursement rates, any unused state funding for rate increases in 2022-23 would instead be made available for school kitchen infrastructure grants. Children Now wants to make sure that School Meals for All is fully funded.
• LGBTQ+ Youth. Within the Department of Public Health budget, the May Revise includes $5 million for grants to counties and experienced community-based organizations to partner to improve capacity, training, and culturally responsive care to the unique needs and protections of LGBTQ+ youth.

 

Child Welfare

Despite a budgetary surplus in the billions, few additional investments were proposed on behalf of children and youth in foster care, youth experiencing homelessness, and youth involved with the juvenile justice system. While there are some positive steps reflected in the May Revision, we will continue to advocate for the State to meet the critical needs of children and youth including augmenting the Emergency Child Care Bridge Program for Foster Children; dedicating resources to create housing for young people currently or formerly in foster care, experiencing homelessness, or under probation supervision; and establishing a fund to ensure grants and resources are immediately available to disaster-impacted communities to mitigate the urgent needs of children and youth in foster care and their caregivers.

Below are a few highlights from the budget summary.

Child Welfare

Creates the Family Finding and Engagement Grant for a county-optional program to supplement foster caregiver recruitment and retention. The resources will support statewide training and technical assistance on evidence-based best practices for intensive family finding and engagement services. Each participating county must build a network of support for youth such that permanent connections and homes are established ($150 million one-time available over five years). (page 82)

Provides funding to reduce approval timelines for foster caregiver applications. The resources will allow counties to hire additional staff to reduce pending and probationary resource family applications ($50 million ongoing). (page 82)

Provides funding for prevention, intervention, and services for youth who have been the victims of sex trafficking ($25 million one-time). This funding will support placement and services for youth who have been impacted by commercial sexual exploitation and to develop a targeted training curricula for child welfare and their multidisciplinary partners who interact with youth who have been impacted by commercial sexual exploitation. (page 84)

Additional funding to continue design, development, and implementation activities for the Child Welfare Services-California Automated Response and Engagement System (CARES) project, which is replacing a legacy system with a modern technology application that aids child welfare stakeholders in assuring the safety and well-being of children at risk of abuse and neglect ($108 million one-time). (page 133)

Behavioral Health

Provides funding to develop and implement a Youth Suicide Prevention Program that is data-driven, targeted and community-based for youth at increased risk of suicide such as Black, Native American, and Hispanic youth and youth in foster care ($40 million). (page 71)

Provides funding for Wellness and Mindfulness Programs in schools and communities and expansion of parent support and training programs to support wellness and build resilience of children, youth, and parents ($85 million over two years). (page 72)

K-12 Education

Increases the investment in the Expanded Learning Opportunities Program, bringing the ongoing program total to $4.8 billion and full funding implementation (four years ahead of schedule) of $2,500 for every low-income student, English language learner, and youth in foster care in the state. (page 22)

 

Higher Education

Increases funding to support First Star Foster Youth Cohorts at CSU East Bay and CSU Northridge ($1.5 million). (page 34)

Increases funding for the NextUp program, above what was proposed in the Governor’s January budget, to expand availability of foster youth support services offered by the program to re-engage students that left the system during the pandemic ($10 million ongoing). (page 36)

Increases funding for the Foster and Kinship Care Education Program to backfill an estimated decrease in federal matching funds provided to programs and maintain current funding levels ($500,000 ongoing). (page 37)

 

Housing Stability and Homelessness

Provides additional funding for more Homekey projects for a total of $2.9 billion in Homekey funding over two years ($150 million). The 2021-22 State Budget established a set aside of not less than 8% in Project Homekey for projects serving homeless youth or youth at risk of homelessness. (page 95)

 

Juvenile Justice

Adds funding to the Returning Home Well Program to provide transitional housing to youth discharged from the California Department of Corrections and Rehabilitation’s Division of Juvenile Justice by the Board of Juvenile Hearings in 2022-23. Transitional housing will be available to youth who are at risk of homelessness upon their release to support them in successfully reentering their communities ($3 million one-time). (page 119)