Twitter Chat With the CBP on Corrections Spending: July 22

July 18, 2014

California’s new state budget continues the persistent trend of higher state spending on corrections, despite a declining crime rate and an anticipated drop in the state prison population in the coming years. New funding has been made available for jail construction, even though various alternatives to incarceration could promote public safety and would be more cost-effective. And continued growth in corrections spending means fewer resources available for investing in education, child care, job training, and other state priorities.

As part of an ongoing series of Twitter chats hosted by Californians for Safety and Justice, CBP Policy Analyst Selena Teji next week will discuss trends in corrections spending and criminal justice policy, including how state leaders might better align budget choices with the needs of California’s families and communities. The Twitter chat will take place Tuesday, July 22, from noon to 1 p.m PDT. You can follow the discussion — and offer questions and comments — via the #SchoolsNotPrisons hashtag. We hope you can join us for this timely discussion.

— Steven Bliss

How Did Child Care and Preschool Really Fare in the State Budget?

July 15, 2014

The 2014-15 budget agreement (read our initial analysis here) made changes to California’s subsidized child care and state preschool program that one legislator described as “the largest investment in those two areas in a decade.” This reinvestment is a positive step forward in restoring funding for the state’s child care and development system, but it is only the first step of many necessary to fully reinvest in these critical programs. A closer look at the numbers illustrates how much further California still has to go.

The budget agreement restores funding for 13,000 child care and preschool slots in 2014-15. Of these, 7,500 full-day, full-year preschool slots, 500 Alternative Payment Program slots, and 1,000 General Child Care slots were added on July 1, and an additional 4,000 full-day, full-year preschool slots will be added on June 15, 2015. However, even with the new slots the total number is still more than 20 percent below the number funded in 2007-08, and total state funding is still 31 percent lower than in 2007-08, after adjusting for inflation. The spending plan also does not restore funding for the Centralized Eligibility List (CEL), thus making it impossible to determine just how many children are waiting for a child care or preschool slot. Before funding for the CEL was cut in 2011, close to 200,000 children were waiting for a slot, and this number has likely grown since then.

The 2014-15 spending plan updates provider payment rates, but in many cases these rates still lag behind the rates paid in 2007-08. For example, providers that contract directly with the state will see a 5 percent increase in their payment rates, but will still be reimbursed at a value that is nearly 7 percent lower than the 2007-08 rate, after adjusting for inflation. Likewise, payments for providers that are reimbursed with vouchers will now be based on a 2009 market rate survey — an update from the 2005 survey used previously — but only after the 2009 regional market rates are reduced by 13 percent in making them the basis for payment. As a result, many providers won’t see an increase at all. In fact, in 46 out of 58 counties, providers categorized as licensed child care homes will not see an increase in their payment rate for infant care.

Further, providers that contract with the state have to meet more stringent licensing requirements that include a developmental component. This is in addition to meeting the health and safety standards that voucher-based providers are held to. Due to the more stringent licensing requirements, contract-based providers should be paid at a greater rate for the higher-quality standards that they are required to meet. However, in 17 counties — representing a third of all counties — voucher-based centers caring for preschool-age children will be paid at a rate that actually exceeds that for contracted providers, even though the quality standards may not be as high. In addition, in eight counties voucher-based licensed child care centers will be paid at a rate for infant care that exceeds contract-based providers.

Lastly, state policymakers did not update the income eligibility limit, which is the highest income at which a family qualifies for subsidized child care and preschool. Yet, as we noted in a recent report, state policymakers have not adjusted the income eligibility limit in years, and it is currently set at just 70 percent of the 2005 state median income (SMI). This means that families lose eligibility at a lower income than they would if the income limit were updated to reflect the most recent SMI for which data are available. In fact, the income limit would increase by more than 10 percent if based on the most recent SMI — a difference of over $400 a month for a family of three.

The 2014-15 budget agreement represents a missed opportunity to more significantly invest in one of California’s most vulnerable populations: children living in poverty. Access to subsidized child care and high-quality preschool programs helps to mitigate the effects of poverty and helps families achieve economic security. This boosts local economies and reduces future state costs for remedial education, corrections, and safety net programs, to name a few. Increasing support for California’s child care and development system doesn’t just boost support for low- income families, it is an effective way to invest in California’s economic future as well.

— Kristin Schumacher


Policymakers Take Steps to Improve Food Security, but Opportunities to Address Hunger Remain

July 14, 2014

State policymakers have recently taken several important steps to expand access to CalFresh food assistance for California families, but opportunities to address high levels of poverty and hunger in the Golden State remain.

More than 15 percent of California households struggle to afford enough food, even several years after the Great Recession officially ended. And it is especially troubling that more than one-quarter of California children are food insecure. Many administrative decisions that can expand CalFresh eligibility, increase participation, or simplify enrollment are made at the state level, presenting policymakers with the opportunity to make investments and other policy choices that yield broadly shared benefits to California communities. CalFresh benefits, which are 100 percent federally funded, are spent locally at grocery stores and farmers markets. Researchers have found that $1 spent on benefits generates about $1.80 in economic activity during difficult economic times.

Given the significant unmet need for — and the broad benefits of — CalFresh food assistance, it is fortunate (as we blogged about earlier) that policymakers took important steps during the recent budget deliberations to expand eligibility.

For example, the 2014-15 state budget creates a new, state-funded energy assistance program that avoids harsh CalFresh benefit cuts that otherwise would have resulted from the new federal Farm Bill. The Farm Bill imposed restrictions on state “Heat and Eat” policies, which increase benefits to households who also receive federal energy assistance. More than 300,000 California households would have lost an average of $62 per month, or about one-third of the average household benefit amount. This $10 million state investment will keep $300 million in federal funds flowing to California to be spent on families’ most basic needs.

The 2014-15 budget agreement also helps more low-income families qualify for CalFresh by increasing the gross income limit to 200 percent of the federal poverty line. This change takes advantage of the federal option known as “broad-based categorical eligibility.” Households will still need a net income — their gross income minus expenses like housing and child care — at or below 100 percent of the poverty line, or $19,790 for a family of three, in order to receive CalFresh food assistance. Taking advantage of broad-based categorical eligibility removes a significant barrier for families who are working, but spend large shares of their income on basic needs, leaving too few dollars in their budgets to provide an adequate diet.

Further, the budget agreement repeals the lifetime ban from CalFresh — as well as from CalWORKs — for Californians with certain drug felony convictions. California now joins 21 other states in opting out of the federal policy creating this lifetime ban, inaugurated as part of welfare reform in the mid-1990s. The state Senate estimates this change will benefit 20,000 Californians directly.

Other Policy Options Left on the Table

While the state has made progress in maintaining or expanding access to critical food assistance, several policy options — which would especially help children and students — remain on the table.

California is tied for dead last among states for overall CalFresh participation, and has the lowest participation rate among eligible working families. Streamlining enrollment processes would lower barriers to participation and ease potential sources of confusion during difficult times for families. These families would also benefit from investments in meals their children are served in the child care and development system.

Some potential policy options include:

o   Reinvesting in nutrition assistance for early childhood education programs. The federal government reimburses child-care providers for nutritious meals and snacks served to low-income children. Recognizing higher food costs in the state, California has contributed state funding to this reimbursement. Yet over the last three years, nearly all of the state’s share has been cut. During the recent budget deliberations, the Assembly proposed a $10 million state reinvestment in early childhood nutrition, modestly increasing reimbursements. The 2014-15 budget agreement did not include this restoration, which would have provided an added incentive for child-care providers to serve nutritious meals.

o   Streamlining eligibility for community college students. Federal law limits CalFresh eligibility for college students, who are generally required to work at least 20 hours per week or be enrolled in a work training program to qualify. This presents a barrier for nontraditional students who do not rely on their parents for support. Assembly Bill 1930 would allow more community college students to qualify for CalFresh by considering participation in EOPS — Extended Opportunities Programs and Services — as work training. This policy change could help more than 70,000 low-income students afford sufficient food and thus be better able to concentrate on their studies. The bill will be heard in the Senate Appropriations Committee in August.

o   Aligning Medi-Cal and CalFresh eligibility. State policymakers have already begun to more closely align programs for health coverage and food assistance, both in recognition of the close relationship between nutrition and health and in an effort to increase efficiency. For example, more than 90 percent of individuals eligible for CalFresh are also eligible for Medi-Cal. Senate Bill 1002 would allow households to renew their eligibility for Medi-Cal and CalFresh at the same time and would help families to more easily maintain benefits and reduce needless paperwork. SB 1002 will be heard in the Senate Appropriations Committee in August.

Food security is a key component of family well-being. CalFresh food assistance provides broad benefits to low-income families and their children and to local communities. State policymakers took several vital steps to expand eligibility to vulnerable populations in the recent budget deliberations. There is more work to be done to help families make ends meet in the aftermath of the Great Recession.

— Miranda Everitt

The State Budget Is Done — Time to Start Thinking About … the State Budget

July 10, 2014

In the wake of another on-time state budget, and with the Legislature on a month-long summer break, it would be natural to conclude that Californians won’t hear about — and don’t need to think about — the state budget again until sometime in 2015.

On the contrary: Like the Big Apple, California’s budget process never sleeps, a point highlighted in Dollars and Democracy, our newly updated guide to the rules and practices that shape the development of each year’s state budget package. The always-in-motion character of the state budget process can be seen in the following examples:

  • First, the seeds of each year’s state budget are planted well before January 10 — the constitutional deadline for the Governor to propose a spending plan for the upcoming fiscal year (which begins on July 1). Starting each summer and continuing through the fall, the Governor’s proposed budget is developed within the various agencies and departments of the executive branch through a process coordinated by the Department of Finance. While there is no official opportunity for public input at this stage, resourceful Californians can find ways to get their priorities heard — and maybe even adopted — by the Administration as the proposed spending plan is being assembled.
  • Second, far from being set in stone, the “final” budget that is crafted by lawmakers and the Governor following months of hearings and negotiations is likely to change over the course of a fiscal year. This occurs as state policymakers revise spending up or down and add new “trailer” bills to the budget package. For example, in each of the past two years the Legislature has passed a new budget bill — known as “Budget Bill, Jr.” — just a couple of months after the original budget bill was signed into law. The odds are that the budget package signed by Governor Brown a couple of weeks ago will be revised at least once, if not multiple times, in the coming months.

In short, there’s no “off season” as far as the state budget goes. While the January-to-June period gets the most attention, the process of crafting the budget is an ongoing enterprise, giving Californians ample reason to stay engaged and involved year-round.

— Scott Graves

An Opportunity to Improve Transparency in the New K-12 School Funding Formula?

July 9, 2014

Tomorrow’s State Board of Education (SBE) meeting in Sacramento will focus on California’s new funding formula for K-12 schools — the Local Control Funding Formula (LCFF). The SBE will review proposed changes to the regulations they adopted this past January that govern LCFF spending and stipulate the information school districts must report in their Local Control and Accountability Plans, or LCAPs. All California school districts were required to adopt an LCAP by July 1 using a template that was developed and approved by the SBE earlier this year. Tomorrow’s meeting will review changes that the SBE is proposing to both the spending regulations and the LCAP template in response to more than 2,000 written comments the State Board received this spring. The SBE plans to adopt permanent regulations later this year and those rules, as well as the LCAP template, will determine how school districts are required to report LCFF spending for years to come.

It is critical that the SBE adopt regulations that require school districts to clearly report two pieces of information, so that stakeholders can gauge whether districts are increasing or improving services to support disadvantaged students: 1) a baseline level of spending used to support disadvantaged students in 2013-14; and 2) for each year after 2013-14, the amount spent in the prior year to support disadvantaged students. While the regulations adopted by the SBE in January do require school districts to use prior-year spending on disadvantaged students as a starting point for estimating the level of support going forward, they do not require transparent reporting of this spending level.

On Monday’s KQED Forum program, I had the chance to join SBE President Michael Kirst and others in discussing implementation of the new funding formula. President Kirst suggested during this conversation that the State Board may be willing to require school districts to transparently report how much they spent to support disadvantaged students in a prior year. By establishing a clear, easy-to-understand baseline, such a change would be a welcome step toward improving transparency and enabling stakeholders to understand whether LCFF dollars are being used to support disadvantaged students.

After tomorrow’s SBE meeting, the public will have through July 28 to submit comments on proposed changes to the regulations and the LCAP template. All Californians concerned about making LCFF spending more transparent should use that period to engage in the process and let their voices be heard.

— Jonathan Kaplan

Prioritize People Over Hollywood: Alternatives to Expanding the Film Tax Credit

July 2, 2014

Last week, lawmakers moved forward legislation that could expand California’s film tax credit. The bill — AB 1839 — may end up like much of Hollywood’s output these days: a reboot of an old idea, but with a much bigger budget. The current film tax credit allocates a total of $100 million annually to companies that make movies or television shows in California instead of outside of the state. Some proponents now argue that the state’s tax credit should offer up to $400 million annually, which would make the credit four times as large.

This proposed expansion of the film tax credit comes at a time when policymakers are prioritizing fiscal austerity over investments in workers and their families. Despite the good intentions of promoting job growth, film tax credits fail to generate the economic or budgetary benefits needed to justify their upfront costs.  Moreover, the suggested $400 million price tag could instead provide essential funding for the kinds of programs that California families need today. For example, policymakers could use these dollars to:

  • Significantly expand access to affordable child care. California could increase the number of childcare and preschool “slots” by 40,000 at the cost of approximately $300 million, according to the California Legislative Women’s Caucus. This would mean additional and much-needed support for working parents through affordable and safe child care and preschool options.
  • Provide additional support for California’s renters.  Each year, over 1 million taxpayers claim California’s renter’s credit, which offers a small nonrefundable tax credit to eligible renters. In 2012, the total cost of this credit was $106 million. At a time when housing costs are a significant burden for families, this program could be significantly expanded to reach more renters than it currently does.
  • Ensure access to Medi-Cal services.  California recently implemented a 10 percent cut in Medi-Cal payments to doctors, dentists, and other providers. This rate cut could discourage health care providers from participating in Medi-Cal and potentially hinder access to critical care.  The Assembly Budget Committee estimates that repealing this cut would cost $312 million in 2015-16.

These are just a few examples. If AB 1839 passes and is signed into law, it will be a discouraging display of misplaced priorities. The latest budget agreement made only modest progress in reinvesting in the public systems and services that were battered by cuts in prior years, and now is not the time to implement costly and ineffective policies.

—  Luke Reidenbach

Budget Agreement Includes Some Advancements for Low-Income Families, but Greater Investments Are Needed

June 30, 2014

The 2014-15 budget agreement (read our initial analysis here) includes a number of investments and policy changes that will help alleviate economic hardship among California’s lowest-income residents, who suffered disproportionately during the recession and who have continued to be left behind in the economic recovery. However, given the magnitude and breadth of the cuts made to California’s core public services and systems — cuts which low-income families and children bore the brunt of even as the state’s poverty rate reached nearly 25 percent — much bolder action is needed to set California on a path toward more broadly shared prosperity. Here’s a quick assessment of how well the budget package addresses the needs of low-income Californians at a time when poverty and long-term unemployment remain high.

The budget agreement makes some advancements for low-income Californians. For example, it:

  • Increases the maximum grant for CalWORKs, which provides modest cash assistance and job-related services to low-income families with children, by 5 percent effective April 1, 2015. This increase, together with the 5 percent increase that took effect March 1, will restore most of the grant cuts made since 2008-09 and will help very-low-income parents with children make ends meet as they search for work or build skills to broaden their employment options.
  • Dedicates funds to help families participating in CalWORKs to obtain safe, affordable, and stable housing. This assistance is extremely important given that the maximum monthly CalWORKs grant for a family of three doesn’t even cover the average cost of a studio apartment priced at “fair market rent” in California.
  • Prevents a substantial reduction in CalFresh food assistance benefits that was slated to occur under recent changes in federal law. As we pointed out in a blog post earlier this year, more than 300,000 households would have lost an average of $62 per month in food assistance absent state action — a cut equal to nearly one-third of the average CalFresh household’s benefits.
  • Expands eligibility for CalFresh by taking advantage of a federal option called “broad-based categorical eligibility.” In a prior blog post, we detailed how this policy change would remove a significant barrier to food assistance access primarily for low-income working families who spend much of their incomes on necessities like child care and housing and thus have little left over for food.
  • Lifts the lifetime ban that prevents parents with certain drug felony convictions from receiving CalFresh food assistance and CalWORKs income support, job-related services, and child care. This change could benefit thousands of low-income children whose parents are currently prohibited from participating in these programs.
  • Provides funding to restore 13,000 child care and preschool “slots” for California children and includes provisions that would make these programs more affordable for some families. Watch for an upcoming blog post for more detail on these policy changes.

However, even with these advancements, the budget agreement places greater emphasis on paying down debt and saving for a rainy day than it does on reinvesting in our communities. Although state revenues are projected to increase more than previously anticipated, policymakers left in place deep cuts to many vital programs and services as well as policy changes that restrict economic opportunities for low-income Californians. For example, the budget package:

  • Does not fully address low-income families’ critical need for affordable, high-quality child care and preschool. The budget agreement restores only a fraction of the 110,000 child care and preschool slots eliminated since 2007-08. With potentially close to 200,000 children on waiting lists for slots, this level of investment doesn’t come close to meeting existing demand.
  • Does not reinstate the statutory cost-of-living adjustment (COLA) for CalWORKs grants that was eliminated in 2010-11. Without an annual COLA, CalWORKs grants have been gradually losing purchasing power, making it harder for families to afford basic necessities. Moreover, the grant increase included in the new budget agreement doesn’t go far enough to help low-income families with children escape poverty. Even after the increase takes effect, the maximum monthly grant for a family of three will be about $700 — equal to just 43 percent of the poverty line, well below the deep-poverty cut-off of half the poverty line.
  • Does not restore grant cuts or reinstate the annual COLA for the SSI/SSP Program, which provides modest cash assistance to 1.3 million low-income seniors and people with disabilities. Policymakers eliminated the COLA in 2010-11 after suspending it several times in prior years and reducing the state’s portion of the grant to the minimum level allowed under federal law. The amount of assistance individuals lose each month due these cuts is equivalent to more than three weeks of groceries – a significant loss, particularly given that SSI/SSP participants are not eligible for CalFresh.
  • Does not restore a 10 percent cut to payments for certain Medi-Cal providers that began to be implemented late last year. Maintaining this cut not only reduces the amount of federal Medicaid funds that flow into the state, but also could discourage some health care providers from participating in Medi-Cal, thus potentially impeding access to care for millions of low-income Californians as enrollment rises.
  • Does not restore a reduction in the total hours of care that In-Home Supportive Services (IHSS) consumers can receive. IHSS helps more than 450,000 low-income seniors and people with disabilities remain safely in their own homes, preventing the need for more costly out-of-home care. IHSS consumers were hit with an 8 percent across-the-board cut in total hours effective July 2013, and this reduction is scheduled to scale back to 7 percent effective July 1, 2014. The budget agreement leaves this cut in place.

With the highest poverty rate in the nation, California has much work to do to expand economic opportunity. This work is critical: our state’s future prosperity will be largely determined by the extent to which we invest in families, children, and communities today. Fortunately, with state revenues projected to continue their rebound, California should be well positioned to make those investments. We’ll look to policymakers to take advantage of this opportunity and present bolder strategies for leading our state toward long-term economic growth and more broadly shared prosperity. As debates on poverty and economic opportunity unfold in coming weeks and months, watch for additional CBP commentary and analysis on the key policy choices facing our state and what they mean for low-income families.

— Alissa Anderson


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