May Revise Takes Significant Steps Towards Improving the Health, Education, and Economic Security of CA Kids

On May 14, Governor Gavin Newsom released his 2021-22 May Revision to the State Budget.

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

California ranks 34^th nationally on child well-being with significant equity gaps due in part to historic underinvestment in the systems that serve kids. We’re thrilled with Governor Newsom’s May Revise budget proposal, which takes significant and long overdue steps in the right direction towards improving the health, education, and economic security of our kids, birth through age 26. Yet, state leaders have a once in a generation opportunity to make even stronger investments in the systems that serve kids, especially Black, Latino, and other children of color, and youth in foster care, who have historically been underserved and continue to be disproportionately impacted by the devastating effects of the pandemic. In addition to making needed adjustments to various elements of the Governor’s proposal, the Legislature should dramatically increase investments in child care to pay providers a living wage and expand slots for families.

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

EARLY CHILDHOOD

Children Now issued this statement to EdSource in response to the Governor’s early childhood budget proposal:

We appreciate the Governor’s historic commitment to four-year-olds, and that his transitional kindergarten proposal addresses a number of the concerns Children Now highlighted: there must be ongoing funding above the Proposition 98 guarantee to support TK expansion, that ratios/group sizes must be reduced and that families must have access to wraparound care. These provisions must be effectively codified with equity at the center of TK expansion. This means prioritizing under-resourced communities and students, preserving family choice, ensuring TK is developmentally appropriate for the younger children this expansion aims to serve and matched by a robust child care investment.

UNIVERSAL TRANSITIONAL KINDERGARTEN BY 2025

The Governor proposes a series of investments to create a “14^th grade” of public education for four-year-olds by 2024-25 utilizing transitional kindergarten (TK). To support planning and initial TK implementation efforts in 2021-22, the Governor proposes using $250 million in one-time Proposition 98 General Fund (e.g., this funding is being repurposed from the Governor’s original TK incentive strategy that was proposed in January).

To reach universal transitional kindergarten, the proposal would phase-in implementation over three years by birthday cohort. Specifically: 1) in 2022-23, children born between September 2 – March 2; 2) in 2023-24, children born between September 2 – June 2; and 3) in 2024-25, and each school year thereafter, a child who will have their 4^th birthday by September 1. Local Education Agencies (LEAs) may also enroll children earlier if the LEA determines it is in the best interest of the child and the parent is given information on the advantages and disadvantages of early admission.

To fund the expansion, the Budget Summary indicates an ongoing commitment to provide resources above the Proposition 98 guarantee ($2.7 billion by full implementation in 2024-25). In addition, the Governor is proposing an ongoing investment to hire one additional certificated or classified staff per classroom, which could reduce ratios for a class of 24, to 12-to-1 ($740 million within the Proposition 98 guarantee by 2024-25). All of this funding would be allocated through the Local Control Funding Formula (LCFF).

The May Revision also includes several additional proposed investments to support TK implementation, including:

$50,000,000 for competitive preschool, TK and K teacher training grants administered by the California Department of Education (CDE) to LEAs, with a priority on high poverty elementary schools.
Adds TK to the Facilities Grant Program and proposes an additional $190,000,000 to the account for one-time grants to LEAs.
Includes Pre-K and TK in a new PK-12 Educational Employment Program which would fund the Commission on Teacher Credentialing (CTC) ($45,624,000) to implement a statewide recruitment and communications strategy focusing on recruiting and developing the workforce, highlight the value of working in education, and assist folks moving into the PK-12 educator workforce.
Proposes $20,000,000 to waive credential and child development permit fees for new documents issued by the CTC in 2021-2022.
Identifies TK teachers as a shortage area to be targeted by the Golden State Teacher ($15,000,000) and Teacher Residency Grant Programs ($550,000,000).
Specifies that TK and kindergarten students in afterschool/expanded learning programs are to be in ratios no larger than 10-to-1.

The Governor’s revised proposal states the intent to respond to the concerns we’ been raising since January that there be ongoing funding above the Proposition 98 guarantee to support a TK expansion, that ratios and group sizes must be reduced from the current TK structure, and that families must have access to wraparound care. We’ll be working to ensure these provisions are effectively codified and that equity is at the center of TK expansion by prioritizing under-resourced communities and students, preserving family choice, ensuring TK is developmentally appropriate for the younger children this expansion aims to serve, and that TK expansion is matched by a robust child care investment.

SOME, BUT NOT NEARLY ENOUGH, INVESTMENT IN CHILD CARE

By far, the most disappointing part of the May Revision is its failure to prioritize child care. Although recent estimates indicate California has permanently lost 57,000 slots due to the pandemic (and 60% of residents lived in a child care desert previously), the Administration proposes far less additional slots than Legislative leaders are calling for[i] and is silent on the long-overdue need for rate reform and paying providers a living wage. Please click here to download the letter outlining what child care investments Children Now and other key partners are advocating for the final state budget to include.

Adds only 100,000 child care subsidy slots, spread out over 2021-22 (63,000 Alternative Payment slots in October 2021, 42,000 General Child Care slots in April 2022 and 1,300 new Migrant Child Care slots in April 2022) through an investment of $223 million in 2021-22 and $450 million ongoing General Fund, with an additional 6,500 slots in 2021-22 through an $83 million increase in Proposition 64 (marijuana tax) funding.

The May Revision does not clearly lay out a plan for California’s $3.8 billion in child care ARPA funding, including the $2.3 billion in CCDF funds that California received specifically for direct support to child care providers. However, the Administration is requesting Legislative ratification of the Administration’s $593.8 million federal CRSSA relief funds for pandemic response agreement with the Child Care Providers United, to include:

$176.86 million for one-time stipends to licensed providers, based on capacity, of between $3,500 to $6,500.
$205.54 million in $600 per-child stipends for subsidized child care and preschool providers.
$60 million to waive family fees for all families in state-subsidized child care programs beginning July 1, 2021 through June 30, 2022.
$25 million to expand the California Child Care Initiative Project.
$31 million for 16 non-operational days for providers accepting vouchers that have to close due to COVID-related reasons beginning July 1, 2021, through June 30, 2022.
$70 million to continue hold harmless funding for child care providers that contract directly with the state through June 30, 2022.
$7.3 million to extend emergency child care services.
$2.6 million for CDE State Operations.

ADDITIONAL PROPOSED INVESTMENTS IN EARLY CARE AND EDUCATION

$250 million in federal funds for infrastructure grants for the acquisition, construction, development, and renovation of child care facilities through September 2024.

$6 million to modernize contractor payment by implementing direct deposit systems.

$10 million to Resource and Referral agencies, one-time funding only, to serve as intermediaries for

child care facility development and streamline data collection processes.

$20 million one-time funds to strengthen quality improvement systems and address inequities over multiple years in order for CDSS to engage with stakeholders to inform policy-setting and program design. Current quality projects funded by the federal Child Care and Development Fund will transfer to CDSS “without any immediate changes.”

$4.8 million investment in a child care data system. The Department of Social Services would receive funding to engage in planning and the initial implementation of a child care data system, including strengthening administrative processes for child care data collection. Budget Summary language calls for DSS to build on previous data efforts, engage stakeholders, align the vision with the recommendations outlined in the Master Plan for Early Learning and Care, and build the system to address the needs of families and the workforce.

$10 million one-time General Fund for the Department of Education to update the Preschool Learning Foundations, to reflect the most recent research on early childhood development and provide comprehensive resources for pre-kindergarten teachers.

Fully codify the Transition of Child Care to the Department of Social Services, as authorized in the 2020-21 Budget Act by transferring $31.7 million and 185.7 positions from the California Department of Education (CDE) to DSS, add $10.9 million and 79 positions, and update trailer bill to codify DSS authority shift in the Welfare and Institutions Code, and clarify CDE retained authority in Education Code.

$20 million to create an interagency loan fund to continue contractor flexibilities through the transition of child care administration.

$25 million to extend Early Start early intervention services for children with developmental delays up to age 5, add one staff position to improve coordination between state and local agencies to support the IDEA Part C to Part B transition, and convene stakeholder workgroups to increase access to more inclusive settings for three-, four-, and five-year-olds.

$500,000 ongoing to conduct outreach to tribal communities to improve awareness of early intervention programs, including Early Start.

Maintains CA State Preschool Program funding levels, and notes that the Administration will develop a comprehensive plan in 2022-23 to support existing State Preschool Program providers to maintain their contracts while transitioning to serve younger (three-year-old) children.

California Early Math Initiative funding increased with $66.9 million in one-time Proposition 98, available over five years.

Cost of Living Adjustments of 1.7% to all capped child care programs, including the child nutrition program.

ECONOMIC SUPPORT FOR FAMILIES

Golden State Stimulus Expansion: Building on last year’s Golden State Stimulus, which is expected to provide about $2.8 billion in tax refunds to 4.5 million low-income Californians, the May Revision extends the $600 payments to taxpayers with incomes up to $75,000 and a $500 payment to all ITIN taxpayers (including those with mixed immigration status) with adjusted gross income of $75,000 or less and a dependent.

Increases CalWORKs grants for very low-income families by 5.3%.

Creates the California Child Savings Accounts program: $2 billion to seed $500 per account, with the value of deposits growing over time, with new accounts to be created for each subsequent income class of low-income first graders in an effort to make college more affordable.

MATERNAL AND CHILD HEALTH AND MENTAL HEALTH

Several notable Maternal and Child Health and Mental Health proposals are also included in the May Revision, such as:

Establishing Medi-Cal dyadic service benefits,
A five-year extension of 12-month Postpartum Medi-Cal Eligibility, this proposal aligns with the American Rescue Plan Act of 2021, which allows states to receive federal funding if they extend Medi-Cal eligibility from 60 days to 12 months for most postpartum individuals, effective April 1, 2022 for up to five years.
Adding doula services as a covered benefit in the Medi-Cal program,
$10 million one-time through September 2023 for Early Childhood Mental Health Consultation to expand the California Inclusion and Behavior Consultation project which offers support to child care programs and providers.

Over $68 million increase to the Department of Public Health: Women, Infant, and Children Program, ongoing to reflect adjusted expenditure estimates.

TK-12 EDUCATION

In his May Revision, the Governor has proposed an ambitious set of investments in schools that leads with equity and focuses on the comprehensive needs of children by expanding learning opportunities; creating a new “14^th grade” through universal transitional kindergarten; strengthening connections to health, mental health, and social services; and investing in the recruitment and training of educators. The Governor’s proposal also recognizes the need to significantly increase the number of adults who are effectively trained to meet the academic, social, emotional, physical, and mental health needs of students, which is especially critical given California currently ranks at the bottom of the country in terms of those staffing ratios.

This is a historic level of investment in public schools! At the same time, a significant portion of the proposed funding is one-time in nature, some of which districts will spend over multiple years. Without state intervention, school districts will face a significant fiscal cliff that will result in a dramatic reduction of their spending levels when the one-time federal stimulus funds must all be spent (Sept. 2023) and the one-time state funds end. Given these fiscal dynamics, we are concerned that education leaders may hesitate to build the infrastructure and hire the staff necessary to achieve and sustain the vision outlined in Governor’s proposal. To encourage LEAs to increase staffing commitments, we will be urging policymakers to shift as much of these investments as possible to ongoing funding streams, maintain last year’s commitment to the Proposition 98 supplemental payments (above the minimum guarantee) in the out years to ensure schools receive 40% of the state general fund resources moving forward, and lift the local reserve cap to allow LEAs to spread this remarkable level of one-time funding over multiple years. In addition, there is much work to do to effectively shape the contours of the services being proposed, including, but not limited to, ensuring there is clear guidance to LEAs on stakeholder engagement and coordinated planning requirements, as well as reporting requirements, for these new programs to be transparency and to support effective implementation.

Funding Context: To put these investments in context, K-12 schools have received the following direct investments from the federal and state government in the last six months:

Federal December 2020 stimulus package (CRRSAA) – $6.9 billion (one-time funding);
State February 2021 school reopening and expanded learning package – $6.6 billion (one-time funding); and
Federal March 2021 stimulus package (ARP) – $15.1 billion (one-time funding).

In addition, the Governor’s May Revision proposes the following:

Maintain existing funding for schools – $70 billion of annual ongoing funding (last year’s base)
Provide $30 billion in state funding above the current year ($6 billion on-going and $24 billion in one-time). This is an increase of $12.6 billion above the Governor’s January proposal.
Use these resources to fund a mixture of 2021-22 investments, as well as out-year investments (see additional information below).
Place $4.6 billion in an education rainy day reserve and commits to $8.1 billion in additional one-time spending in 2022-23 in response to the Gann Limit (see below).

To read Children Now’s statement to EdSource regarding the K-12 budget, please visit this page.

May Revision Proposals: Below is some detailed information on what the Governor has included in the May Revision:

Transitional Kindergarten (TK)

See summary above

Expanded Learning

Would ultimately provide funding for LEAs in excess of 55% unduplicated pupils (low income, English Learners and foster youth) to provide all K-6 students access to expanded learning opportunities.
As a condition of receiving funds, LEAs must provide all K-6 students access to:
9 hours of programming during school days (before school, school day, after school); and
At least 30 non-schooldays, during intersessional periods, provide no less than 9 hours of expanded learning opportunities per day.
Invests an initial $1 billion in ongoing funds for LEAs with 80% unduplicated pupils in 2021-22. The Budget Summary commits to expand the program to $5 billion over 4 fiscal years. The trailer bill outlines an annual phase-in that would target LEAs with 70% unduplicated pupils in 2022-23, 60% unduplicated pupils in 2023-24 and 55% unduplicated pupils in 2024-25.
Expanded learning “shall not be construed to mean an extension of instructional time” but instead “opportunities to engage pupils in enrichment, play, nutrition, and other developmentally appropriate activities.”

Student-to-Staff Ratios

Allocates $1.1 Billion through the LCFF concentration grant to increase the number of credentialed and/or classified staff that provide direct services to students on school campuses.

Local Control Funding Formula (LCFF) Increase

$520 million for a 1% increase, beyond statutory COLAs, for LCFF Base Grants, which will result in increases in Supplemental and Concentration grants as well.

Community Schools

Nearly $3 billion in one-time funds for the Community Schools Partnership Program, of which $60 million is to be provided to 5 regional LEA technical assistance hubs and $5 million to remain with the Superintendent of Public Instruction to oversee the program and conduct an evaluation.
The funding would be allocated on a 70/30 split between new programs and program expansion/continuation over 3-4 funding cycles, depending on grant participation.
Requires a local match of ½ the funds either in cash or in-kind. Facilities cannot be more than 25% of the local match.
Priority for grants include: 1) schools with 80% FRPM, 2) demonstrated need for expanding access to services, 3) commit to help coordinate health, mental health and social services for schools and partner in a consortium with other schools, districts, or county agencies, or nongovernmental organizations, 4) a plan for sustainability, 5) cosignatories from partner government agencies, including, but not limited to, county public health, county health, and county mental health agencies, 6) new community schools.

Educator Investments

The May Revise includes a total of approximately $3.3 billion of primarily one-time funds to support educator initiatives:

$1.5 billion for the Educator Effectiveness Block Grant, to provide LEAs with funds for training resources for classified, certificated, and administrative school staff in specified high-need topics, including accelerated learning, re-engaging students, restorative practices, and implicit bias training.
$550 million to support approximately 22,000 teacher candidates in teacher residencies and other grow-your-own teacher credentialing programs.
$500 million for the Golden State Teacher grants, which would support a combined total of at least 25,000 grants for teacher credential candidates who commit to teach at a priority school, in a high-need subject matter area, for four years.
$125 million for the Classified School Employee Teacher Credentialing Program, to support more than 5,000 classified school staff in becoming credentialed teachers.
$45.6 million to establish the Roadmap to Pre-K through 12 Educational Employment Program, a long-term, comprehensive statewide recruitment and communications strategy that focuses on recruiting and developing a diverse and talented educational workforce.
$20 million to provide a credential fee and child development permit waiver in 2021-22 for individuals entering the K-12 educator workforce.
$25 million for the 21st Century School Leadership Academy, to provide high-quality professional learning for administrators and other school leaders.

Accelerated Tutoring

$2 billion one-time federal funds and $623 million one-time Proposition 98 General Fund to LEAs (allocated proportionally to their LCFF entitlements) to provide research-tested interventions for students, including:

Small-group or one-on-one high-dose tutoring from trained professionals.

Cradle to Career Data System

The May Revision maintains the January budget’s proposals of $15 million in new money, plus final authorization to spend $6 million of the initial 2019 appropriation, for the C2C to create a public-facing P20W Dashboard and query tools, as well as a clearer and more transparent process for requesting and accessing (de-identified) student-level data for research purposes.
The proposal also calls for investments in two tools that will directly support the needs of students: 1) $3.8 million for the California College Guidance Initiative (CCGI), which provides college and career planning tools, college-readiness monitoring and electronic transcripts, and 2) eTranscript California, which facilitated electronic transcript request and delivery across California’s postsecondary systems.
Similar to the CCGI item, the May Revision adds $10 million for software that visualizes and clearly maps out systemwide curricular pathways for students choosing their pathway and for students needing help to stay on their pathway and can support a common application platform within C2C.
The proposed governing board of the C2C would include data-contributing entities (12 members) plus 6 public members (including one teacher and one K12 management representative, plus 4 others to be selected by the Governor and legislative leaders from a list of options, such as parent/student representatives, advocates, researchers, etc.).

COVID-19

$2 Billion in one-time Proposition 98 funds for Covid-19 related testing, tracing, and ventilation.

Deferrals

$1.1 billion to pay down deferrals, leaving $2.6 billion to be paid off in 2022-23.

Rainy Day Fund

Increasing the Proposition 98 rainy day fund to a total of $4.6 billion. This allocation triggers the 10 percent school district reserve cap beginning in 2022-23.

Universal Meals

$150 million in ongoing funds to encourage LEAs to participate in a federal universal meal program.

State Spending Limit (Gann Limit)

There is also an estimated $8.1 billion that may be available in 2022-23 for higher one-time spending on schools reflecting requirements of the Constitutional State Spending Limit (Gann Limit).

Key Policy Proposals in the Budget Local Control Accountability Plan (LCAP)

There is no proposal to support the development of a Local Control Accountability Plan (LCAP) portal to collect fiscal information on district spending of LCFF Supplemental and Concentration Grant funding. The Budget proposes to add a requirement that if districts don’t implement all of the actions planned in their LCAP, then they would need to provide additional services in the following LCAP to make up for it. However, the proposal continues to allow districts to adopt plans that spend less than their LCFF Supplemental and Concentration (S&C) Grants. For example, in 2019-20, we estimate that district LCAPs planned to spend $670 million less than districts received in LCFF S&C grants.Bi-Weekly Reporting

Requires that LEAs report bi-weekly to the California Department of Public Health on an array of data, including:

The number of pupils who have opted into independent study or other virtual learning options provided by the local educational agency.
How the local educational agency is meeting the daily synchronous requirement.
Actions the local educational agency is taking to encourage the transition of those pupils to in-person instruction.
The expanded learning opportunities provided to pupils.
How the school is addressing the mental health and wellness needs of pupils.
The supports and interventions the school is utilizing to address the academic needs of pupils.
The enrichment opportunities provided to pupils.
The safety protocols the school is utilizing to ensure the health and safety of pupils and staff.

In-Person Learning and Independent Study

The Budget Summary makes it clear that the Administration intends to sunset the provisions that allowed LEAs to receive funding for distance learning in 2020-21. This action would make in-person learning, with all the prior instructional minutes requirements, the default instructional approach for next year. Recognizing that some students and families may have health and safety concerns about returning to in person learning in the 2021-22 school year, the Administration is proposing to amend the independent study program to include some new provisions that would attempt to accommodate distance learning for these students and families. The initial proposal puts forward some modest changes to independent study, including:

Allowing families to opt for distance learning based on self-determined health risk;
Requiring devices and internet access be provided to students;
Developing a plan for daily live interaction and synchronous instruction to all pupils at least once a week;
Documenting daily participation, assignments, contact through a weekly engagement record; and
Implementing a tiered reengagement strategy for who miss more than three schooldays or 60 percent of the instructional days in a school week.

STEM/EXPANDED LEARNING

To address the shortage of computer science teachers and limited access to computer science courses, we support the proposed $15 million to support 6,000 teachers in completing the coursework necessary to receive state certification to teach computer science.
To increase the number of students to study and earn STEM degrees, we support for Humboldt State University becoming designated as the state’s third polytechnic university, which would build upon the University’s high concentration of programs in STEM:
- $433 million to support capital projects—including renovations of science and laboratory facilities, as well as enhanced computing and telecommunications infrastructure—as the campus transitions to a polytechnic university.
- $25 million to support the addition of academic programs that would be offered under Humboldt State University’s polytechnic designation.

HIGHER EDUCATION

Children Now issued this statement to EdSource in response to the Governor’s higher education budget proposal:

In the May Revise, the Governor proposed unprecedented investments to address college access and affordability, including additional funding for Cal Grants, making summer financial aid at the UC and CSU permanent, funding for basic needs centers and coordinators at community colleges, and building desperately needed low-cost student housing. All of these initiatives will make college more affordable and attainable for all students, but particularly those from low-income families who deferred their post-secondary education or were forced to drop out, and of course those whose college and high school experience this past year was unlike any other.

The May Revise includes substantial additional funding to support and recruit K-12 teachers but lacks equivalent investments beyond those proposed in the January budget for college faculty. Community college, CSU and UC faculty have endured similar challenges as their K-12 peers. Because of the stress and trauma of COVID-19, we’ll likely see a spike in retirements and departures from the profession. In addition, higher education struggles with a lack of faculty diversity and few opportunities for professional learning. As we emerge from the pandemic, we should increase as much as possible our investment and support for college faculty.

We support the proposed $2 billion in one-time and $170 million ongoing funding beginning in 2022-23, to establish college savings accounts for all current low-income public school students. We believe this initiative will help to build and sustain a college-going culture from the earliest age and offset the rising costs of a college education.
We support the proposed $4 billion to establish a low-cost student housing grant program focused on expanding the availability of affordable student housing. This initiative will help to address both the shortage and high cost of student housing at all three segments of public higher education, and particularly for those students who struggle with housing insecurity and lack the financial resources to fully fund their education.
To create greater alignment between K-12, higher education and California’s workforce needs, we support the $250 million proposed to award grants to between five and eight K-16 regional collaboratives, modeled after the Fresno K-16 Education Collaborative, to include at least one institution from all three segments and K-12; consideration of regional workforce needs; focus on streamlining occupational pathways that lead to high-paying, in-demand jobs; and align higher education with workforce needs. Collaboratives would be required to adopt the recommendations from the February 2021 Recovery with Equity report related to fostering inclusive institutions and facilitating student transitions.
We support the proposed $371.7 million to support UC’s operational and programmatic needs, which effectively restores UC’s 2020 Budget Act reductions beginning in 2021-22 and when combined with the Governor’s Budget base augmentation of $103.9 million results in a five-percent base increase and for the CSU the proposed $373.4 million to support its operational and programmatic needs, which effectively restores CSU’s 2020 Budget Act reductions beginning in 2021-22 and when combined with the Governor’s Budget base augmentation of $111.5 million results in a five-percent base increase. This funding will help to ensure the UC and CSU can meet increasing enrollment demand and have the capacity to graduate more students.
For the California Community Colleges, we support the proposed $75 million to expand new and existing College and Career Access Pathways agreements between school districts and community colleges; $150 million to further support community colleges’ efforts to implement Guided Pathways programs; $100 million to support efforts to bolster CCC student retention rates and enrollment; and $30 million for community colleges to establish basic needs centers and hire basic needs coordinators.

HEALTH

The Governor’s FY 2021-22 May Revise budget proposes the following health investments that will have a significant impact on children’s access to health care:

Proposition 56 Suspensions—The May Revision proposes to eliminate suspensions for Proposition 56 supplemental payment increases for Medi-Cal providers, resulting in a cost of approximately $550 million ongoing. The Proposition 56 Medi-Cal payments support children’s health services, like well-child visits, developmental screenings, pediatric specialty care, and trauma screenings.
Community Health Workers—The May Revision includes $16.3 million ($6.2 million General Fund), increasing to $201 million ($76 million General Fund) by 2026-27, to add community health workers to the class of health workers who are able to provide benefits and services to Medi-Cal beneficiaries, effective January 1, 2022. Children Now has been advocating for this funding for several years to support children’s asthma prevention and other chronic conditions.
Population Health Management Service—The May Revision includes one-time $315 million ($31.5 million General Fund) to provide population health management services that would centralize administrative and clinical data from the Department, health plans, and providers. Access to this information would allow all parties to better identify and stratify member risks and inform quality and value delivery across the continuum of care while implementing CalAIM. The service will also facilitate the connection between important health data and critical social service data for a given beneficiary. In his press conference, the Governor also noted that the upcoming Medi-Cal managed care re-procurement is an opportunity to do something “big and bold” for Medi-Cal enrollees.
Five-Year Medi-Cal Eligibility Extension for Postpartum Individuals—The American Rescue Plan Act of 2021 allows states to receive a federal funding if they extend Medi-Cal eligibility from 60 days to 12 months for most postpartum individuals, effective April 1, 2022 for up to five years. The May Revision includes $90.5 million ($45.3 million General Fund) in 2021-22 and $362.2 million ($181.1 million General Fund) annually between 2022-23 and 2027-28 to implement the extension. The state must make sure that nobody experiences a gap in coverage given that the unwinding of the federal PHE Medi-Cal redetermination moratorium requirement begins in January 2022, but this provision would not start until April 2022.
Audio Only Health Visits—As part of the Administration’s proposal to extend telehealth flexibilities utilized during the pandemic, while providing assurances of appropriate access to in-person care, DHCS will establish rates for audio-only telehealth that is set as 65% of the Medi-Cal rate for the service rendered in fee-for-service, and comparable alternative to prospective payment system (PPS) rates for clinics to maintain an incentive for in-person care. Only providers located in California or border communities and able to provide in-person services to each client served by audio-only telehealth can claim Medi-Cal reimbursement for the service. DHCS will consult with subject matter experts to establish utilization management protocols for all telehealth services prior to implementation of post-pandemic telehealth services.
Restoration of Dental Fee-For-Service (FFS) in Sacramento and Los Angeles Counties—DHCS is committed to increasing Medi-Cal beneficiary utilization of dental services statewide. The May Revision includes transitioning to an entirely fee-for-service environment allowing DHCS to implement more effective and uniform provider and beneficiary outreach on a statewide basis. The restoration of FFS in Sacramento and Los Angeles counties would occur January 1, 2022. The budget includes net savings of $20 million total funds ($8 million General Fund.) The Department has proposed trailer bill language as part of the May Revision related to the elimination of dental managed care. Children Now will continue to monitor the transition process to ensure children and families in the dental managed care delivery system receive adequate and appropriate notification of the transition, that continuity of care is not disrupted, and the provider network remains stable. We also recommend that the critical protections present within the dental managed care system are incorporated into fee-for-service to improve access to care for children and their families. Specifically, we recommend the Department institute additional network adequacy standards and language access protections modeled after provisions within the DMC system. We would like the Department to detail how the transition from dental managed care to fee-for-service in Sacramento and Los Angeles counites interact with the implementation of CalAIM. Finally, the trailer bill language signals that the Medi-Cal Dental Advisory Committee will also sunset as part of the proposal to discontinue dental managed care in the Medi-Cal program. We would recommend that MCDAC continue to oversee the transition from dental managed care to the dental fee-for-service system.
Language Access—The May Revision includes $20 million one-time General Fund to improve and deliver language access services across the spectrum of Health and Human Services programs. This proposal would build on a 2021 Governor’s Budget proposal for the Health and Human Services Agency to develop and implement an HHS-wide policy framework to improve language access standards across programs and services.
Zero-Dollar Premium Plans—Health care consumers pay $1 premiums for health plans due to federal policy concerning abortion coverage. The May Revision proposes to subsidize this cost for Covered California consumers at a General Fund cost of $20 million ongoing.
Children and Youth Behavioral Health Initiative: The May Revision includes $1 billion from the federal American Rescue Plan Act’s Coronavirus State Fiscal Recovery Fund (ARPA) in 2021-22, $1.7 billion ($1.3 billion ARPA, $300 million General Fund, and $100 million Federal Trust Fund) in 2022-23, and $431 million ($300 million General Fund) ongoing for the Children and Youth Behavioral Health Initiative. The initiative includes the following:
- Resources for the Department of Health Care Services to: implement a virtual platform to integrate behavioral health services with screening, clinic-based care, and app-based support services; provide grants to qualified entities to increase behavioral health services at or affiliated with schools; develop and expand age-appropriate, evidence-based programs offered through plans as well as the CalHOPE Student Support Program; provide dedicated funds from the Behavioral Health Continuum Infrastructure Program to build infrastructure targeted at individuals age 25 and younger; and provide Medi-Cal dyadic service benefits;
- Resources for the Office of Statewide Health Planning and Development (OSHPD) to support behavioral health providers through existing and new health workforce development programs. The Initiative also includes resources for an Office of the Surgeon General public awareness campaign on adverse childhood experiences and toxic stress, and develop a curriculum of trauma-informed training specific to the education sector;
- Resources for the Department of Public Health to raise the behavioral health literacy of all Californians and prevent mental health and substance use challenges.

SCHOOL MENTAL HEALTH

- Announces the “California for All Kids Plan” which includes an improved and more integrated relationship between schools and health care plans, county health, and social services to provide school-based services to children.

Builds upon the $264.9 million Proposition 98 General Fund proposed in the Governor’s Budget to provide $3 billion one-time Proposition 98 General Fund, available over several years, to further expand the implementation and use of the community school model. Community schools blend various funding sources to provide integrated health, mental health, and social services alongside high-quality, supportive instruction.
Mental Health Services Act Partnership Grant Program—The May Revision includes $30 million one-time Mental Health Services Fund for the Mental Health Student Services Act partnership grants.

EARLY CHILDHOOD MENTAL HEALTH

$10.6 million one-time Coronavirus Response and Relief Supplemental Appropriations funds available through September 30, 2023 for early childhood mental health consultation. This investment will expand the California Inclusion and Behavior Consultation project which offers support to child-care programs and providers on such topics as children’s social emotional development, trauma-informed practices and health and safety for the wellbeing of children and families impacted by the pandemic and beyond.

TRAUMA AND RESILIENCE

Treatment and Prevention of Adverse Childhood Experiences—The May Revision includes $12.4 million one-time General Fund for seven demonstration projects focused on advancing research on, and building scalable approaches to, treating and preventing Adverse Childhood Experiences (ACEs). Funding will further the Administration’s efforts to better understand and treat ACEs by strengthening workforce training efforts, building a statewide stress surveillance network, and broadening the network of clinicians and providers that are equipped to treat and prevent toxic stress resulting from ACEs.

The May Revise health proposal is also described in the CHHS California Comeback Plan Fact Sheet.

CHILD WELFARE

Continues funding for the Family Urgent Response System (FURS) and the Emergency Child Care Bridge Program for Foster Children. In anticipation of projected budget deficits, the 2020 Budget Act included suspensions of various health and human services programs effective in 2021. Due to the improved revenue outlook, the May Revision proposes to eliminate these suspensions including suspensions to FURS and the Bridge Program.
Augments funding to assist counties serving youth in foster care with complex needs and behavioral health conditions within California, including youth that return from an out-of-state congregate care placement ($39.2 million).
Expands the Bringing Families Home program, which provides housing-related supports to eligible families experiencing homelessness in the child welfare system ($280 million).
Provides funding to build locally driven services and supports for children, youth, and families at risk of entering foster care and assist counties with new prevention services implementation efforts allowable under the federal Family First Prevention Services Act ($122.4 million in 2021-22 to be spent over three years).

EDUCATION

The Governor is committed to investing in supplemental learning and enrichment opportunities, such as afterschool and summer programs, to help students overcome pandemic-driven learning loss. Students in foster care would have priority for these programs. Additional resources for students in foster care would include:

Additional funding to address the disproportionate impact of the pandemic on K-12 students in foster care. County offices of education would receive funding to work with local partners to coordinate and provide direct services to students in foster care, who faced unique educational challenges long before the pandemic and are now at even greater risk of falling behind ($30 million).

HOUSING STABILITY AND HOMELESSNESS

Reauthorizes the critical Housing Navigators program, which provides help to young people ages 18 to 21 years old to secure and maintain housing, with priority for young people currently or formerly in foster care ($5 million).

JUVENILE JUSTICE

Provides funding for the Office of Youth and Community Restoration, to support core functions, including: (1) review of county’s juvenile justice plans, (2) reporting on youth outcomes and identifying best practices, (3) providing technical assistance to counties, and (4) performing the ombudsperson duties ($7.6 million in 2021-22 and $7.2 million ongoing).

UNACCOMPANIED UNDOCUMENTED MINORS

Funds the provision of additional support for unaccompanied undocumented minors by providing language access, legal and other critical services ($25 million).

YOUTH EMPLOYMENT

Provides funding to help youth gain valuable work experience. The May Revise proposes funds for grants to cities and counties to create and expand employment opportunities for youth, such as part-time work or summer jobs ($200 million).

[i] California Senate Democrats’ April 2021 ‘Build Back Boldly’ proposal calls for paying providers a living wage and immediately adding 200,000 subsidy slots for infants and toddlers as a step toward universal birth-to-3 child care, and the California Assembly’s 2021 Budget Blueprint calls for $1 billion to raise reimbursement rates and for 1,000,000 new child care slots by 2025.