A Review of the May Revision to the Governor’s 2024-25 Budget Proposal
On May 10, Governor Gavin Newsom released the 2023-24 May Revision of the budget for California, projecting a $31.5 billion deficit. Despite this financial challenge, the state budget still includes several critical investments aimed at improving the lives of children and families in our state. However, the revised budget also proposes several critical changes to health, housing, and social services. This breakdown includes some key points of the May Revise and their potential impact on vulnerable Californians.
Early Childhood Education Programs
The budget continues to support early learning through increased funding for preschool programs and childcare services. These investments are crucial for ensuring that children have access to quality early education, which sets the foundation for their future success.
Universal Transitional Kindergarten (TK): The budget allocates $550 million from the General Fund for the third year of the Universal TK expansion, making more children eligible. However, some programmatic delays from 2023-24 have been pushed to 2025-26.
California State Preschool Program (CSPP): $1.4 billion is maintained for CSPP enrollment and temporary reimbursement rate increases, benefiting CSPP providers alongside home-based providers.
Universal School Meals Program: An additional $63 million supports the universal school meals program, considering an increase in meal provision and cost adjustments.
Economic Security and Social Services
The revised budget includes concerning cuts to social services that support low-income families. It specifically outlines significant changes to the CalWORKs program, which is crucial for supporting over 650,000 children and their families, predominantly people of color.
CalWORKs: The budget proposes significant cuts to CalWORKs, totaling about $739 million including the elimination of the Family Stabilization Program (FSP), which provides housing assistance, mental health, substance use and domestic violence services. This is a core program within CalWORKs that keeps people housed, safe, and well.
Home Visiting Program: This program is designed to support positive health, development, and well-being of CalWORKs families with children. The May Revise proposes $47.1 million in cuts, which is 45% of the program’s budget.
Mental Health and Substance Abuse Services: The May Revise proposes a permanent cut of $126.6 million. This cut removes critical support for mental health and substance abuse, which are vital services that help families address barriers to employment and maintain overall well-being.
Employment Services: The May Revise proposes a one-time reduction of $272 million in 2024-25. This cut affects funding for employment services under the single allocation, potentially reducing the support available for job training and placement.
Food Assistance: The budget delays the expansion of the California Food Assistance Program (CFAP) to undocumented adults age 55 or older, pushing the start date to 2027. This delay will continue to leave many older adults without critical food benefits.
Childcare: While the budget maintains temporary rate increases for childcare providers, it pauses the planned expansion of child care slots, reducing support for working families.
Health
One of the most significant areas affected by the May Revision is healthcare. Here are some key highlights:
Health4All: The May Revision continues to fund the expansion of Medi-Cal to all income-eligible adults ages 26-49, regardless of immigration status, starting January 1, 2024. This expansion is vital for improving access to healthcare for undocumented immigrants.
Managed Care Organization (MCO) Tax: The budget proposes a larger MCO tax starting in April 2023, generating $19.4 billion. This includes $3.4 billion for 2023-24, with funds allocated to offset the General Fund and support Medi-Cal investments, such as rate increases for primary care and mental health providers.
Doula Services and Medical Interpreter Pilot Program: The timeline for evaluating the implementation of doula services in Medi-Cal and the Medical Interpreter Pilot Project has been extended, ensuring these critical programs have adequate time for assessment and improvement.
Public Health Initiative – Elimination of $300 million ongoing for the Future of Public Health Initiative, as well as the elimination of $52.5 million in the current fiscal year.
Health Care Enrollment Navigators – A $18 million (33%) reduction in one-time funding for health care enrollment navigation, which would sunset the Statewide health care enrollment navigation program entirely.
Elimination of In-Home Supportive Services (IHSS) for undocumented Californians, potentially affecting 14,000 individuals who rely on these services to live independently.
Cuts to Equity and Practice Transformation Payments and the Health Care Affordability Reserve Fund may hinder efforts to improve healthcare quality and reduce costs.
Behavioral Health
988 Crisis Services: The budget includes a one-time augmentation of $15 million to support California's 988 centers, enhancing workforce expansion and service availability.
BH-CONNECT Demonstration: The May Revision includes an update to the BH-CONNECT Demonstration to include a new Workforce Initiative and includes $480 million in funding for each year of the five-year demonstration period ($2.4 billion total funding and no General Fund).
Children and Youth Behavioral Health Initiative Reduction— Reduces $72.3 million onetime in 2023-24, $348.6 million in 2024-25, and $5 million in 2025-26 for school-linked health partnerships and grants, behavioral health services and supports platform, public education campaign, and youth suicide reporting and crisis response pilot.
Behavioral Health Continuum Infrastructure Program- Eliminates $450.7 million from the last round of the Behavioral Health Continuum Infrastructure Program
Housing and Homelessness
Housing remains a critical issue in California, and the May Revision reflects mixed outcomes for housing programs:
Homelessness Programs: The budget maintains $3.7 billion for homelessness programs, including $1 billion for the Homeless Housing, Assistance, and Prevention grant program.
Behavioral Health Bridge Housing (BHBH) – A $132.5 million reduction in FY 2024-25 and a $207.5 million reduction in FY 2025-26 for the BHBH Program, which would effectively reduce BHBH Rounds 3 and 4 funding by 50%.
Bringing Families Home – A $80 million reduction in one-time funding for the Bringing Families Home program, which would adversely affect the housing stability of over 500 families at-risk of homelessness supported by the program and reduce the County’s capacity to serve additional households through this program.
Cuts $65 million for the Home Safe Program
Cuts $50 million for the Housing and Disability Advocacy Program.
What’s Next
The 2023-24 May Revision budget presents a challenge for California, balancing fiscal responsibility with the need to support vulnerable populations. While some programs receive continued or increased funding, significant cuts to healthcare, housing, and social services threaten the well-being of many Californians. As advocates, we must continue to push for policies that ensure all Californians have access to the resources and support they need to thrive.
