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Here is our summary of the May Revise to the 2021 Governor’s State Budget.

Updated County Behavioral Health Revenue Estimates

Children and Youth Behavioral Health Initiative

The Governor’s May Revise announces a new Child and Youth Behavioral Health Initiative to extant needs for behavioral health care, as well as those arising from the Coronavirus pandemic. The Administration indicates that its goal is to “transform California’s behavioral health system for children and youth into a world-class, innovative, and prevention-focused system where all children and youth are routinely screened, supported, and served for emerging and existing behavioral health needs.”

Services to be developed under the Initiative will be provided to children and youth aged 25 and younger who need help early, young people facing challenges at home, or who are having difficulty forging positive and supportive adult relationships. Services would be available statewide (in both commercial plans and Medi-Cal), evidence based, culturally competent, and equity focused, including:

  • A virtual platform available 24/7 to integrate behavioral health services with screening, clinic- based care, and app-based support services
  • Grants to increase behavioral health services provided at or affiliated with schools
  • Develop and expand age-appropriate, evidence-based programs offered through health plans and the CalHOPE Student Support Program
  • Dedicated funds from the Governor’s $750 million Behavioral Health Continuum Infrastructure program to build infrastructure targeted at individuals aged 25 and younger Medi-Cal dyadic service benefits
  • Resources for the Office of Statewide Health Planning and Development (OSHPD) to support behavioral health providers
  • Resources for an Office of the Surgeon General public awareness campaign on adverse childhood experiences (ACEs) and toxic stress and to develop a curriculum of trauma-informed training specific to the education sector

Funding in the May Revise for the Children and Youth Behavioral Health Initiative includes:

  • For 2021-22: $1 billion from the federal American Rescue Plan Act’s Coronavirus State Fiscal Recovery Fund (ARPA)
  • For 2022-23: $1.7 billion ($1.3 billion ARPA, $300 million General Fund, and $100 million Federal Trust Fund/Medicaid matching dollars)
  • Ongoing: $431 million ($300 million General Fund)

The May Revision also includes the other youth behavioral health investments:

  • Behavioral Health Outreach for Young People: $100 million over the next 5 years to the California Department of Public Health to support youth behavioral health education and outreach.
  • Mental Health Services Act Partnership Grant Program:$30 million in one-time Mental Health Services Act (MHSA) funding for the Mental Health Student Services Act of 2019 for county- school partnership grants.
  • Foster Youth:$39.2million to assist counties with serving foster youth with complex needs and behavioral health conditions within California, as well as youth that return from an out-of-state congregate placement.
  • Treatment and Prevention of ACEs: Within the California Office of Planning and Research, the California Initiative to Advance Precision Medicine supports collaborative research and partnerships between the state, researchers, patients, communities, and industry to advance a holistic perspective of physical and mental wellbeing. The May Revise includes $12.4 million one-time for 7 demonstration projects focused on advancing research on, and building scalable approaches to, treating, and preventing ACEs.

Behavioral Health Continuum Infrastructure

The Governor’s January Budget included a $750 million infusion of General Funds for competitive grants enabling counties to construct, acquire, and rehabilitate real estate assets to expand the community continuum of behavioral health treatment resources. The May Revision augments the $750 million infrastructure proposal to a total of $2.455 billion. The additional funds come from $1.2 billion in General Funds and $220 million ARPA. Of this amount, a minimum of $255 million total funds is available for increased infrastructure targeted to individuals aged 25 and younger (and is considered part of the Children and Youth Behavioral Health Initiative described later) and a minimum $250 million General Fund is available for individuals with a serious mental illness who are deemed IST. The Administration’s budget trailer bill language for its Behavioral Health Continuum Infrastructure is pending.

Eliminate LPS Civil Commitments in State Hospitals: Under the Lanterman-Petris-Short (LPS) Act, counties are currently responsible for all individuals committed to DSH for treatment under non-criminal circumstances; counties use local funds to reimburse DSH for LPS placements. Since the beginning of the Coronavirus pandemic, DSH reports its LPS referral rates decreased by 23%. As county courts have begun resuming court proceedings, DSH’s referral rates have steadily increased. As of April 30, 2021, the LPS commitment patient census was 774 individuals.

According to the DSH May Revision Estimate, when the state-county billing process for LPS patients changed in 2014 (from billing based on a county’s bed purchase agreement, to monthly billing based on a county’s actual bed usage), DSH has experienced a steady increase in the number of LPS patients served in the state hospitals (the average daily census is now 774, compared to 554 in 2013-14). The LPS waitlist for DSH treatment has grown from 9 individuals to 201, during this same time period. Additionally, DSH reports that substantial numbers of IST patients who have been deemed “non-restorable” are not being returned to their county, pending a statutorily required conservatorship investigation. Many of these non-restorable IST patients are converting to LPS status, which is also increasing the number of LPS commitments at DSH.

California for All Kids Plan

Governor Newsom recently announced a “California for All Kids Plan” to invests aggressively over the next five years in achieving equity, acknowledging that public schools serve a central role in closing historic and structural opportunity gaps. Under the plan, the state will strive to foster deeper connections and relationships between students and adults on campus, with training in tiered systems of student supports, including more school counselors, social workers, and nurses. The Plan also promotes improved and more integrated relationships between schools and health care plans, county health, and social services to provide school-based services to children. K-12 education investments proposed in the May Revise that address schools’ roles in the emotional well-being of students include:

  • Community School Model: The May Revise augments the $264.9 million in Proposition 98 General Fund proposed in the Governor’s January Budget by $3 billion to support local educational agencies to convert school campuses to the community school model, which include integrated health, mental health, and social services alongside high-quality, supportive instruction.
  • Additional School Staffing: The May Revise includes an ongoing increase of $1.1 billion Prop. 98 General Fund to increase the number of adults providing direct services to students on school campuses, including school counselors, nurses, teachers, paraprofessionals, and other student support providers.
  • Students in Foster Care: In recognition of the disproportionate impact the Coronavirus pandemic is having on youth in foster care, the May Revise provides $30 million Proposition 98 General Fund for schools to work with local partners to coordinate and provide direct services to these students.

Additionally, the Governor’s early childhood education augmentation proposals include $579 million in federal Coronavirus Response and Relief Supplemental Appropriations (CRRSA) funds. Of this amount, the May Revise includes $10.6 million for early childhood mental health consultation to expand the California Department of Education’s California Inclusion and Behavior Consultation project. This project 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.

Federal American Rescue Plan Act Coronavirus State Fiscal Recovery Funds

California is expected to receive over $43 billion in combined recovery funds to cover costs related to the Coronavirus Public Health Emergency. Of this amount, the May Revise estimates approximately $7.7 billion will be provided to counties. Half of this will be provided to counties in the current month, and the balance provided in May 2022. The May Revision framework for the Coronavirus State Fiscal Recovery Fund includes allocations to address state and local public health impacts, including to “address the emotional and behavioral health impacts on California’s children and youth stemming from quarantine requirements and distance learning.” It is anticipated that funds will be used to invest in workforce and facility infrastructure, as well as training and certification of psychologists, psychiatrists, counselors, and social workers.

Older Adults

Homelessness: The May Revise reports the number of elderly homeless Americans is expected to triple in the next decade, and provides additional state General Funds to new and existing programs administered by the California Department of Social Services, including:

  • Housing and Disability Advocacy Program: $175 million annually through 2023-24 to better reach and house individuals who are eligible for, but not currently receiving, Social Security Income (SSI)/State Supplementary Payment (SSP) through benefits advocacy and housing assistance.
  • Home Safe: $100 million annually through 2022-23 for the Home Safe Program to provide access to health, safety, and housing supports for individuals involved in or at risk of involvement in Adult Protective Services (APS).
  • Supportive Services for Formerly Homeless Veterans: $25 million one-time for the California Department of Veterans Affairs (CDVA) to administer a competitive grant program to support aging veterans and veterans with disabilities who have experienced chronic homelessness, including in-home support, peer specialists to encourage veterans to engage in mental health care, and geriatric social workers to identify behavioral issues related to early onset dementia or similar cognitive issues. This program will support residents in permanent supportive housing projects throughout California, primarily projects supported by Housing and Urban Development–Veterans Administration Supportive Housing.
  • Community Care Expansion: Additional $250 million one-time federal Coronavirus Fiscal Recovery Fund (CFRF), for a total of $500 million, to California Department of Social Services (DSS) for competitive grants to qualified county and tribal entities for the acquisition and rehabilitation of adult and senior care facilities for those who are homeless or at-risk of becoming homelessness and have higher level of care needs.

Health Care: The May Revise acknowledges the disproportionate affect the Coronavirus pandemic has had on older adults, as well as the overarching need to increase support for the expanding population of aging Californians. New health care investments for older adults proposed in the May Revise include, but are not limited to:

  • Medi-Cal Coverage to Undocumented Older Adults: $69 million ($50 million General Fund) in 2021-22 and $1 billion ($859 million General Fund) ongoing to expand Medi-Cal, including In- Home Supportive Services (IHSS), to undocumented adults ages 60 and older, effective May 1, 2022.
  • Older Adult Recovery and Resiliency: $106 million over three years to strengthen older adults’ recovery and resilience from isolation and health impacts caused by the pandemic. This investment will increase service levels of existing programs based on local need including: Senior Nutrition, Senior Legal Aid, Home Modifications and Fall Prevention, Behavioral Health Friendship Line, Senior Digital Assistance, Family Caregiver Support, Senior Employment Opportunities, Elder Abuse Prevention, and Aging & Disability Resource Connection.
  • Alzheimer’s Augmentation: $12.5 million one-time to address Alzheimer’s in California, including $5 million for public awareness, $2.5 million for standards of care, and $5 million for geriatric workforce development.
  • Office of Long-Term Care Patient Representative: $4 million in Public Health Licensing & Certification funding ongoing for CDA to provide public patient representatives to nursing facility residents who lack capacity to make their own health care decisions and who do not have a family member or friend who can act as a patient representative. On May 14, the Administration posted online its proposed budget trailer bill language associated with this policy.
  • Master Plan for Aging Implementation: $3.3 million ongoing to provide the California Department of Aging (CDA) with policy, project management, and information technology leadership staffing necessary to implement the Master Plan for Aging.

o In-Home Supportive Services (IHSS): The May Revise includes $17.2 billion ($5.5 billion General Fund) for the IHSS program in 2021-22. The May Revise proposes to eliminate the IHSS 7% percent reduction in service hours placed in effect during the economic downturn, resulting in a General Fund cost of approximately $248 million in 2022-23 and $496 million ongoing. Under current law, the state and counties share the nonfederal cost for locally negotiated increases to wages and benefits for IHSS providers (counties: 35%, state: 65%). Effective January 1, 2022, when the state minimum wage reaches $15 per hour, county-negotiated increases to IHSS wages and benefits would have flipped to a ratio of 65 percent county and 35 percent state. The May Revise now assumes the continuation of the 65 percent state and 35 percent county sharing ratio, at increased state costs of $57.3 million in 2021-22 and $123.8 million ongoing.

Medi-Cal Investments

  • Population Health Management Service: One-time $315 million ($31.5 million Genera lFund) to provide population health management services that would centralize administrative and clinical data from DHCS, health plans, and providers to better identify and stratify member risks and inform quality and value delivery across the continuum of care.
  • Five-Year Medi-Cal Eligibility Extension for Postpartum Individuals: ARPA 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. The May Revise 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.
  • Community Health Workers: The May Revise 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 (e.g., Promotoras) to eligible providers of Medi-Cal health services, effective January 1, 2022.

Supplemental Security Income/State Supplementary Payment (SSI/SSP)

The federal SSI program provides a monthly cash benefit to eligible aged, blind, and disabled persons who meet the program’s income and resource requirements. In California, the SSI payment is augmented with an SSP grant to help with basic needs and living expenses and serves disabled legal noncitizens who are ineligible for SSI/SSP due solely to their immigration status. Effective January 2021, the maximum SSI/SSP grant levels are $955 per month for individuals and $1,598 per month for couples. CAPI benefits are equivalent to SSI/SSP benefits. During the economic downturn, the cost of living adjustment (COLA) to SSP benefits were eliminated. The May Revise includes General Funds to restore the SSP COLA for individuals back to 2011 levels.

Criminal Justice

California Department of State Hospitals (DSH): Community Restoration for the Felony Incompetent to State Trial (IST) Population: The number of felony IST commitments referred by trial courts and awaiting admission to the state hospital system is currently over 1,500 individuals.

The May Revise includes $28.3 million state General Fund to provide IST competency restoration in community mental health treatment settings, rather than DSH facilities. By 2024-25, ongoing costs for community-based IST restoration are estimated to increase to $49.8 million. As a part of the Newsom Administration’s Behavioral Health Continuum Infrastructure proposal, the May Revise provides $250 million one-time to DHCS for competitive grants to increase local community based alternatives to incarceration or unnecessary state hospitalization for justice-involved individuals with a serious mental illness who are deemed IST.

The May Revise also provides $13 million for DSH to contract with counties to provide IST competency restoration services to individuals in county jails. By 2022-23, ongoing costs are estimated to increase to $22.5 million. The May Revise provides $12.7 million for DSH to partner with county jails to re-evaluate felony IST individuals that have waited in jail 60 days or more awaiting DSH placement. On May 16, the Administration posted online its proposed budget trailer bill language associated with this policy.

California Department of Corrections and Rehabilitation (CDCR):

  • Division of Juvenile Justice Realignment: Legislation in 2020 enacted the realignment of youth offenders from the state to counties. The state will provide $45.7 million in state Juvenile Justice Realignment Block Grant Program funds to serve the youth in 2021-22, growing to $211.9 million in 2024-25 and annually thereafter.
  • State Prison Mental Health Care Improvements: CDCR now operates five Psychiatric Inpatient Program (PIP) facilities. The May Revise provides $37.7 million in 2021-22, and $35.9 million ongoing – as well as 264 positions to add clinicians, nurses, custody staff, and administrative staff to provide the comprehensive suite of services necessary to best serve PIP patients. The May Revise also provides $3.7 million ongoing to add supervisory capacity to CDCR’s statewide telepsychiatry program.

Local Public Safety

  • Medi-Cal Providing Access and Transforming Health Payments (PATH): The May Revise includes $200 million ($100 million General Fund) to build capacity for effective pre-release care for justice-involved populations to enable coordination with justice agencies and Medi- Cal coverage of services, 30 days prior to release.
  • California Violence Intervention and Prevention (CalVIP) Grant Program: CalVIP, administered by the Board of State and Community Corrections (BSCC), provides competitive grants to cities and community-based organizations for community education, diversion programs, outreach to at-risk transitional age youth, and violence reduction. The May Revise provides $100 million one-time to expand the program over the next three years.
  • Proposition 47 Savings for Recidivism Reduction: Proposition 47 of 2014 made sentencing reforms to certain property and drug crimes. The May Revise estimates the reforms have generated net General Fund savings of $116.2 million. Under Prop. 47, the funds are used for grants in the following focus areas: 65% for recidivism reduction (including mental health and substance use services); 25% for truancy and dropout prevention; 10% for victims’ services
  • Post Release Community Supervision (PRCS): To account for a temporary increase in the number of offenders on PRCS (primarily due to new “good conduct credits” that may be earned by offenders), the May Revise provides $23.6 million one-time to county probation departments.
  • Police Use of Force Investigations: Recently enacted legislation now requires a state prosecutor (the Attorney General) to investigate incidents of officer-involved shootings that result in the death of an unarmed civilian. The Governor’s January budget included $13 million to establish three teams to conduct these investigations in regions across the state. The May Revise augments this amount by $2.3 million to add an additional investigative team and to provide supportive services to survivors of individuals killed in officer-involved shootings that have been investigated

Housing and Homelessness

The May Revise provides $4.7 billion in new investments designed to end family homelessness, expand access to housing, and provide additional housing supports for vulnerable populations. These General Fund are in addition to the Governor’s January Budget proposals that totaled $2.1 billion. May Revise proposals include, but are not limited to:

  • Homekey FamilyHousing:$2.75 billion over 2 years for additional acquisition and rehabilitation of facilities through the Homekey program. Of this amount, $1 billion is targeted for families experiencing homelessness or at risk for being homeless.
  • Challenge Grants & Technical Assistance: $40 million over 5 years for the Homeless Coordinating Financing Council to provide grants and technical assistance to local jurisdictions to develop action plans that address family homelessness.
  • Social Services’ Homelessness Supports: $475 million to Department of Social Services in both 2021-22 and 2022-23 to expand the existing CalWORKs Housing Support program. This program assists CalWORKs families experiencing homelessness to secure and maintain permanent housing; services include financial assistance and housing related wrap-around supportive services. The May Revise also includes $280 million General Fund in both 2021-22 and 2022-23 to expand the existing Bringing Families Home program for families experiencing homelessness in the child welfare system.
  • Non-Congregate Shelter for Project Roomkey Participants:$150 million to support the stability of the state’s FEMA-funded non-congregate shelter population and transition of individuals from Project Roomkey into permanent housing, following the September 2021 sunset of the federal reimbursement availability from the pandemic.
  • Homelessness Coordinating and Financing Council – Accountability: $5.6 million for the Council to assess local homelessness service providers and state-funded homelessness programs to create a detailed view of the range of services and strategies that are utilized at the local level and help determine if state investments are aligned with local homelessness response systems

Cannabis Tax Revenues

Under Proposition 64, Cannabis Tax Fund expenditures are prioritized for regulatory and administrative workload, as well as research and activities related to the legalization of cannabis and the past effects of its criminalization. Once these priorities have been met, the remaining funds are allocated to youth education, prevention, early intervention, and treatment; environmental protection; and public safety-related activities. The May Revise estimates $377.5 million will be available in 2021-22 for education, prevention, and treatment of youth substance use disorders and school retention.