Senate Budget Sub3 — 2026-05-20

Good morning, no, evening, afternoon. Boy, starting off great. Given that I'm one of the oldest state senators serving, apparently I have the back of an older state senator. So let's see how long I last standing up today. Today we have the agenda broken up into two parts, part A and part B. We're both hearing health and human services issues today. We're going to start with the health part of it. Then we're going to break for public comment and then start part B on human services and then do public comment for human services after that. For part eight, we're going to start with California Health and Human Services Agency. And then before we get started with any May revised presentations, I know Department of Finance and LAO are going to give some remarks to kick us off.

Thank you.

Thank you. Thank you so much. Department of Finance, I appreciate you sharing the difficulties that we are in regarding these cuts and the balanced approach. And yet the California State Senate proposed a plan that also had the same amount of budget solutions. I do agree with the LAO is that we do need to maintain the same amount of budget solutions. We are in a structural deficit. You know, our architecture is aligned that both were slashing the structural deficit by 50%. So we're aligned with that. We do want to add more to the reserves. But with our Senate plan, we were able to preserve most, if not all, the proposed cuts in January that the administration was looking to do. The Senate plan was able to find budget solutions and bring in revenue that were going to create a scenario where we didn't have to further cut. I myself am extremely saddened to see that instead of reversing or delaying much, while I did see a delay for the saleys and refugees implementation of six months, I saw more further cuts to our most vulnerable. And here we are again in Budget Sub-3, having our most vulnerable individuals come and put me in a terrible situation because I align with each and every single one of you. and it's a really difficult place to be in to try to ensure that we get you the services that you need. There are going to be a lot of BCPs presented in this subcommittee, yet it's a balanced approach. We have to slash services for people, but departments are going to come to ask for 10, 20, 55 more positions to build government just to feed into bureaucracy and not actually deliver services. So it's hard to also accept that we are doing a balanced approach approach when we cut services, but we have money to continue to build government and people don't end up with the deliverables that government is intended to deliver. With that, let's get into it. Issue number one.

Hello? Okay, we're going to hold the item open and move on to issue number two. When you're ready.

Great. LAO, any comments? Hold the item open and move on to issue number three. Issue number three for HHS agency will be heard under the child welfare portion of Part B of the agenda. I thought we were asked for it to be heard in Part A.

That's why we moved it to Part A.

No, I think it should be heard in Part B. Okay. I'm going to clarify because it was a request of us to move it to part A. Sorry. We'll move it to, we'll put it back in part B then. Then we'll move on to EMSA on issue number four.

For 500 trainers, do we have any data on the youth understanding, the shift, and what's available for them?

Sorry, I meant given that the funding was taken away from the federal government on the Trevor Project as a lifeline for LGBTQ plus youth. Are we getting any feedback on the youth now being able to connect with the individuals at the crisis center, like post-training? Did we need to do any kind of awareness to ensure that the youth knew that there was still an option for them to call Oh I see And I apologize if I not able to I can probably follow up with more specifics on that But I would imagine that we have done some sort of analysis as to whether or not the youth are continuing to call our 988 centers.

Thank you. Anything to add, EMSA?

Okay. We're going to hold the item open, and you'll be doing issue five? Great.

We want to comment. I see that it's getting funded for two years. What happens after that?

So are these not to maintain, but to continue to build up the system?

So confirming this is a system that will always require ongoing maintenance fees for it, just this is what it costs for the next two years?

Okay.

Good afternoon, Madam Chair.

Hello?

All right, I'll take issue number seven. This item is to implement Senate Bill 660, as you're familiar with, Madam Chair, which expands the data exchange framework program in some very important ways by creating more transparency and accountability measures, adding new required participants to sign the framework, and reconstituting a stakeholder advisory committee to advise HKI on the administration of the program, and which will also provide recommendations for the legislature in a report due July 2027 for how to further strengthen data exchange in California. HKI requests $1.5 million in fiscal year 2026-27 and 2027-28 from the California Health Data and Planning Fund to support new staffing and to implement provisions of this bill. Happy to answer questions.

Department of Finance, in January there was a BCP of $8.8 million to fund the efforts of 660. This is an additional request, but this is from a fund, a special fund. Why can't the $8.8 million original request be also funded through this fund? Victoria Rapley, Department of Finance. The original BCP was just the transfer of existing dollars from agencies, so this is additional funding to cover those new requirements.

Not necessarily reappropriation. More of the Health and Human Services Agency gets that $8.8 million annually to support the data exchange framework. And so that proposal was the shift of that existing funding annually ongoing to HKI to support the data exchange framework. This BCP for the $1.5 million is new dollars for the...

Yeah.

So the original fund was general fund.

Joseph Donald's Department of Finance. So the May revise doesn't include that proposal, but to the extent –

We would have to determine that. We'd have to make sure that there is available resources within the data fund to determine if that absorption could be possible. But we can continue that conversation.

We would note the data fund is funded by an assessment on hospitals and skilled nursing facilities. The data exchange framework, as you know, applies to a much broader group of health care entities and stakeholders. And so, as noted, the data exchange framework initially was funded by a general fund. And so we would, in addition to the health of the fund, which is being drawn on more and more, so we do have, we would want to agree with the point that we'd want to look at the health of the fund as well as the uses and permissible uses Yes As long as I more concerned about if there money in it in terms of the usage of the fund

Jason Constantero, this is a very reasonable line of questioning. I just also, my memory is that this particular fund also has, there's been some budgetary borrowing from it too, and so that also could affect how much resources are in the fund, but that would need to be looked at. But there's a reasonable line of questioning. One or two year budget solution, you know, until we can no longer. I think Department of Finance has utilized funds in that way where it takes a loan or so from a couple years and then it stops

All right, issue number eight, this item is requesting to provide annual ongoing funding for the healthcare payments database, California's all-payer claims database, which is a research database made up of healthcare claims and encounters that are submitted by California health plans and insurers to HKI. Healthcare claims data is regularly used in health services research and policy analysis. The intent of the legislature in creating this program was to increase transparency about health care costs, inform policy decisions, and provide a public benefit to Californians. Since the database's development was authorized, H-Caism et al. statutory milestones for implementing the program, the data is now being used by researchers, state agencies, and the public. In 2018, the legislature authorized $60 million in one-time funding for planning, implementation, and operation of the database. Those funds expired in June 2025. For fiscal year 2025-26, the legislature authorized one year of additional funding for the HPD program, which expires June of this year. And so this request is for ongoing authority. HCI submitted a report to the legislature in 2023 that provides several options for how to fund the program without using general fund. And HCI's budget request is consistent with those recommendations. The department requests $22.5 million in fiscal year 2026-27 and $23.6 million in fiscal year 2027-28 and ongoing. The increase in fiscal year 2027-28 is reflective of the addition of new pharmacy benefit manager pricing data to the database, which was authorized under AB 116 of 2025 and which is underway. Again, the funding sources include no general fund but rely on a mix of the California Health Data and Planning Fund, the Health Plan Improvement Trust Fund, the Pharmacy Benefit Manager Fund, federal reimbursement, and a small portion of fees from data use. And then in response to the question that was included in the agenda about the impact of those fund sources being used for this proposal, we've coordinated with the Department of Managed Health Care that oversees some of those funds, the Health Plan Improvement Trust Fund, Pharmacy Benefit Manager Fund, and they express no concerns with fiscal sustainability. Same thing with the California Health Data and Planning Fund.

No, that was for DMHC's fund.

Correct.

I'm going to hold the item open. Move on to issue number nine.

Jason? I just wanted to note that a couple of items here you're going to be hearing about, some general fund spending items. This is one general fund spending item. It's a reappropriation, so it reappropriates $50 million that was from a previous year, but it sort of remains unspent. It's part of this contract, but these are the sorts of areas, given the sort of major fiscal decisions are sort of weighing, this would be a reasonable area to sort of look at your priorities, consider whether this remains a high priority, and sort of act accordingly. So I just wanted to flag that. Thank you. I don't have any questions on this.

Regarding the Diaper Access Initiative, this adjustment is a technical correction to add identical language that was included in the 25 Budget Act and was inadvertently left out when the governor's budget was released in January. The May revision finance letter corrects this oversight. Regarding the initial proposal, almost half of families report difficulty affording diapers and reduce other expenditures to afford diapers, with a quarter of families saying they skip meals to afford diapers. So beginning this summer, newborns delivering in a participating California hospital will receive 400 diapers at no cost to the family. Hospitals will provide diapers to families at the time of discharge, ensuring parents leave the hospital with an immediate supply of high-quality diapers tailored to newborn needs. So very much an affordability program. We have a question about whether this exemption covers the announced contract with baby-to-baby and whether we anticipate additional contracting needs. So the proposed budget language reference was already in effect for the first year of the program, I'm including it again in this year's budget with support program continuity in year two as proposed funding expands free diapers to more families. It would also support contracting for phase two of the diaper access initiative, which involves a direct to consumer option in addition to the hospital based distribution. So we're looking to engage with an additional partner to develop an online direct-to-consumer e-commerce marketplace for high-quality affordable diapers, which would complement Phase 1 by offering an ongoing option for families to directly purchase lower-cost diapers.

Yeah, I'm going to actually turn to my chief deputy director to talk about the contracting exemption and also, if it's of interest, the process we went through here.

Baby-to-baby last year, did they go through a public contract exemption or go through the regular RFI process?

So when we put in RFI last year or two years ago, and there was no public contract exemption during the first phase of this process?

So the technical aspect of this was that we had the exemption from the PCC in the 2025 Budget Act.

Sorry, I guess I couldn't remember BCP on this. I was trying to – okay. Yeah.

Is it going to be – because baby-to-baby is not going to be the vendor for the second part?

But as far as the straight distribution there will be a year or two not to mix those up there will be a year or two that would operate against the appropriation that Jason mentioned the 12 in budget year to basically double up on the diapers So the first year contract was 6 million 40 million diapers Year two was proposed to be 80 million diapers. First year 7.4?

What would you say then, Director?

What would you say to California and some consumers? They are feeling a little type of way that Baby2Baby was selected, giving the closeness to the first partner who co-founded this vendor, Baby2Baby, and is now being handled by the 1% elite Hollywood actors to give diapers to everybody, regardless of income threshold. So if we're trying to defend that we went through the process,

Director, can you, from my knowledge and understanding with CalRx and so forth, we obtain a vendor who's going to manufacture, and then we sell it at a wholesale price discounted for the consumers. that's a direct consumer approach, right, for like insulin and so forth?

Naloxone?

Is it the same approach where a vendor is distributing it or we're distributing the product?

So it's got indicated.

Sure.

But I guess let me rephrase. Under baby-to-baby's contract, they have the entire, but they got 6.2 of that. And then 12.5 is also, some of that's going to go to them to continue giving out at hospitals?

The remainder half a million of the 12.5?

And the public contract code exemption is so that you can continue to partner with them?

Because right now the contract's only for a year?

If the exemption is removed, then it's essentially defunct.

And do we have any metrics that we're going to be collecting on the – can you share a little bit more about that, Director?

I'd like to hear again why we continue to not put an income threshold on this.

Is it going to be cheaper for us to do what is more cost effective, to continue to deliver the diapers through a middle person or to have us, like in phase two, deliver it directly to consumer?

But H-Chi doesn't have the capability of distributing the diapers ourselves. Okay, so phase two, it's not going to be free diapers.

Correct. Okay, so that's, I get the concept.

Okay, so H-Chi does not have the ability to purchase the diapers and distribute them to hospitals.

I worry that we're not getting to that. I worry that without the income threshold, that we're not tailored to the people that really need it. I recognize we're going to start with hospitals that have a high Medi-Cal threshold, which is really really good I will say the optics of this vendor is not good at all the administration the governor is going to be gone and we're going to continue to get hit on this. You do not choose. None of you in front of me got to choose who this vendor is. I recognize that. I'm just letting you know we are here going to continue to get hit on this. And optically speaking, it was not a smart move to choose the vendor that we chose. Given that, negotiations are going to continue to happen. I'm not inclined to fight to continue to do another public contract exemption. I don't think that's to the benefit of Californians.

If not, I'll move on. I kept looking at you. Well, I thought maybe we had sort of concluding remarks there. I wanted to note in our analysis last year, we did offer a few alternative options that we thought could be more sort of income-based and targeted. And the diaper bank approach was one. And the other approach is there's a subsidy in CalWORKs that also could be expanded. And then the other thing I wanted to really emphasize is that, you know, with regard to phase one, the original proposal was really just a two-year proposal to eventually get to a certain percent of the state. But, you know, it's not really, you know, the overall effectiveness would really depend on how ongoing it would be and sort of the long-term impacts. And that's just another factor you could weigh as you're weighing your priorities here in the budget. Thank you so much.

Thank you, Madam Chair. Issue 11, Distressed Hospital Grant Program. The May revision proposes up to $50 million for another round of state grants to hospitals in immediate and significant financial distress to help prevent the closure of those hospitals. At this time, I wanted to give an update on the recently passed AB 108 from this month, authorizing $25 million for a distressed hospital small grant program. As of Monday evening this week, HKI has received 10 grant applications from hospitals indicating immediate and significant financial distress. Seven of these hospitals actually also hold a distressed hospital loan from the distressed hospital loan program. In all, the 10 hospitals are requesting $118.5 million in grant funding, oversubscribed, similar to the distressed hospital loan program several years ago. So HKIE is currently evaluating and scoring these applications based on financial information provided the hospitals. We'll be doing that this week. We'll be scoring based on severity of financial distress, and we'll follow on quickly with grant awards for near-term financial support. Those dollars actually will expire in June 30th, so we're moving as quickly as we can.

level set for for the for the committee on on hospital financial data that HKI receives so So we have two primary data sets. We receive an annual financial disclosure report from all licensed hospitals, which has lots of detail. And then we have less detailed quarterly financial reports, more timely. Both sets of data do include utilization, information by payer, balance sheets. I would actually note that balance sheets was recently added to the quarterly collection under AB 112, along with the Distress Hospital Loan Program. So we have improved our timeliness with that addition Actually it some of the most timely in the nation Also includes information on changes in equity position income statements statements of cash flow revenues by payer et cetera There is a data lag. Hospitals are required to submit their quarterly financial data 45 days after the end of the quarter, and they can have a 30-day extension if requested so far this year, for example. Quarter 1, 2026, was due last Friday, May 15th.

So as my colleague Mark Newton noted earlier, our office has a general recommendation about rejecting new spending, focusing on more budget solutions. And it's a general recommendation. This is the sort of area that sort of falls under that as new spending. However, this does remain an area of high priority for the legislature. The administration notes that this proposal was really intended to be a starting point to kind of work with the legislature. And we think there are some improvements the legislature could consider. We identified some of those in communications with staff. But generally we think that the proposal as written could have more parameters connected to it So right now there really are two specified parameters under the program a day cash on hand and payer mix But something like the distressed hospital loan program considered a wider array of measures They included more detailed measures on financial distress, but also considered other factors like community need and other areas like that. The loan program also required a turnaround plan. And the turnaround plan is helpful because given that this is one-time funding, the legislature needs some assurance that the funds are helping to sort of have a long-term impact on hospitals' financial situation. So these are some modifications we think the legislature could consider. We did also look at the issue of whether the need is about equal to what's being proposed here. And we came across many of the similar limitations that the department mentioned, and particularly that we observed many hospitals reporting very little cash, but that's not really the reality of it. There are some who may be distressed and some who are not, but the cash is sort of managed elsewhere. And so data improvements like that potentially could help moving forward. Again, you're still going to have that sort of timing issue with when things are reported, but possible improvements like that might be able to help a little more with sort of long-term tracking. Thank you so much.

Yeah, we would note, the chair is probably aware, DHCS is looking at how they pay, how Medi-Cal pays hospitals. And as part of the Rural Health Transformation Program that we'll talk about shortly, we also will be looking at, there are some states, for example, who do global budgets for hospitals, and particularly for the small and rural hospitals, it is difficult to have a baseline of support that they can rely on. And so we are, the administration is looking at more holistic approaches.

we're evaluating now so it is possible that some will not meet all of the criteria laid out in the statute or the application yeah just on Department of

I've been chair for three years of this committee, been on this committee for four years. Every single year we're doing a distressed hospital fund. That's no longer a short-term funding gap. We are now, this is a structural program we've created to continue to fund distressed hospitals. We have to do it, I agree, but it can no longer be considered as a short gap, a funding gap to keep them afloat. So while we continue to do this, because we have to maintain them open, we need a more systemic approach to addressing, like you mentioned, director of the payments and so forth. You know, it's no surprise that the senator is interested in the PDN reforms and adult day CBAS and everything. Just getting or cliffs, getting people out of hospitals into places that are more cost efficient for us and they get long term care. That is not acute hospital. So I think I would disagree in saying this is a short term if we continue to do it year and year after each year. Chief Deputy, this is matching exactly the early action of 10 days. Given that there's hospitals that perhaps have 20, 30 days, have you looked at increasing the threshold from 10 days cash on hand to a higher threshold?

Would the hospitals that get funding in the $25 million, would they be eligible to apply for this as well?

Jason? I might be just picking more at the proposal and not getting at the bigger structural point you're really emphasizing here. But I did just want to respond there.

Definitely, so we can all be held accountable together.

We're going to hold the item open and move on to issue number 12.

I'll take 12, Opioid Settlement Fund Reversion. So this proposal asks to revert $19.6 million in the 2023 Budget Act to the Department of Health Care Services. For details on that, there's an issue 356 in the DHCS finance letter. What I can share with you from HKI's perspective is there was $25 million in opioid settlement funds originally allocated to HKI for the CalRx Naloxone Access Initiative. HKI was able to negotiate a favorable contract for Naloxone with Amnil Pharmaceuticals. As a result, it did not need the full funding amount for this program. We've secured the discount that's being used by the Naloxone Distribution Program. So in order to assure that these excess funds from the OIPOID settlements don't expire, we're facing an expiration date, H-CHI is reverting $19.6 million to DHCS. So we've already encumbered and spent or intend to spend the remaining funds on staffing support operations for the program, purchasing naloxone, implementing a direct-to-consumer website for naloxone, and distributing training devices to naloxone distribution program recipients. So that was our portion of expenses, but again, to avoid expiration or reverting back.

I think in the last year. I think it was a conversation with the Department of Finance and Department of Health Care Services. This is from almost three years ago. And I'm just, you know, as we've continued to do budget solutions, $19.6 million was unspent for three years. It was never proposed as a reversion to. The intention certainly was to use it in the naloxone program. But once we had actually gotten through all of the contract negotiations, established the contract with Amneal, kind of ran the partnership with the naloxone distribution program at DHCS and got into it, you know, two years, two plus years, we realized that we weren't going to need to purchase more outright because DHCS is making the purchase through the NDP. So that's kind of how it unfolded. It didn't unfold quickly. we realized it sort of well into the implementation of the program.

I recognize that. It wasn't offered as a cost shift last year. The department comes in here and says, we're going to use all the money that we're going to need. Don't claw this back. And it went three years without being used. If that were to have happened to a contract, a sub-vendor vendor, the department's stance has always been to claw it back immediately. And I would appreciate a sense of equity or just keeping the same approach that we do with the vendors as we claw money back from them that they don't use. and I think knowing or taking three years to find out that we don't need $19.6 million is not appropriate to hear.

I'll also address issue 13, Rural Health Transformation Program Implementation. The budget requests increased spending authority for federal funds awarded to California to administer the Rural Health Transformation Program This budget year request follows a current year request approved by the Joint Legislative Budget Committee So the May revision request is to increase HKI spending authority by million one time, which in total will cover the authority for all $233.6 million of the award received by the state from CMS. Also included as provisional language for an exemption from the public contract code and authority for use of a third-party administrator in order to meet the highly condensed timelines required by CMS for program implementation. In response to the first question, so yes, I think we received approval of $107 million from the JVLC. and then with the 126 that would cover the 233.6 million dollar award for rural transformation

year authority, we ran a request and was approved by the Joint Budget Legislative Committee, $107 million. This proposal for budget year adds $126.4 million in authority. So that should cover the $233.6 million award. So we've begun spending in current year, and this will just carry us through and also provides some of the support for resources. So you've already gotten the $107. This is for the remainder that brings it up to the 233 that we've got approved. We're implementing now. So we're doing design of the grant programs and getting ready to roll those out here late spring, summer.

Okay, we're going to hold the item open.

Thank you so much, HKai.

Okay, very good, we're on.

Okay. Nope. No questions from me. I'm going to hold that. I'm open. Move on to issue number 15.

I'm going to hold the item open and move on to issue 16. All right. The last one is the electronic filing and analysis of claim settlement data project implementation related to AB 3275.

Can you remind me how we fund this fund?

Great. Thank you so much. Hold the item open Move on to the next That it Yep that it for you We are now on the Commission for Behavioral Health on Issue 17. Thank you.

Department of Finance. Victoria Rapley, Department of Finance. So the May revision includes $55 million for the Commission in 2026-27, of which $10 million is included for the Innovation Partnership Grant Program. Proposition 1 requires up to $20 million be allocated to the Commission annually for five years. The amount included in May revision is in alignment with the requirements of Proposition 1. As part of the broader Proposition 1 state investments proposal, which is part of tomorrow's agenda, the administration took a statewide view of behavioral health programs to determine what could be funded with the Behavioral Health Services Fund in lieu of general fund. These fund shifts impacted several departments, including the Commission. When considering behavioral health services fund investments proposed in the May revision, the administration considered several factors, including available unspent funding from previous years, prioritization of Proposition 1 funds, and whether any programs were duplicative. In the Commission's budget, we estimate that in addition to the $55 million proposed in the May revision, there is over $100 million in unspent funding from prior years, including $20 million appropriated in the 2025 Budget Act for the Mental Health Wellness Grant Program. In addition, in the past, the Administration received feedback that there is desire for Proposition 1 funding to prioritize core direct services as much as possible. Given the historical data on the Commission funding as well as a significant level of unspent funds the Administration proposed million in new funding in the May revision The million not allocated to the Commission allows for additional investments for direct services within the 3 state cap Pursuant to Proposition 1, up to $20 million may be allocated to the Commission for the Innovation Partnership Grant Program. The May revise proposes an allocation of $10 million for this program. While we acknowledge the Commission's work to implement this grant program, the 10% of revenue for state-directed purposes is subject to the annual budget process, and funds are not authorized until the signing of the Budget Act. Act similar to other grant programs grants are ultimately contingent upon availability of funding and then in addition the May revise proposes a reduction of 6.7 million Will? Will owns with the Legislative Analyst's Office. So nothing to add on these items. We have some prepared remarks for tomorrow's hearing regarding the Behavioral Health Service Fund offsets in general, but we're available for questions on this item.

Absolutely. I mean, I think that's accurate in terms of it is a maximum of. I think there were a lot of expectations out there, even as I've been the executive director, that this would be $20 million.

Can you share, because I know you're going to be announcing the awardees June 15, the same day we're supposed to be signing, or the same day the budget's supposed to be passed. Can you share, back in March, when you started accepting applications, conversations that you had with the administration or Department of Finance, any inclination that gave you the ability to go up to $20 million?

They're supposed to be selected in less than a month.

with Proposition 1. So we understand the concerns. We would note, though, that this funding was ultimately subject to the budget process. Brenda, can you share a little bit more about it?

Has there been unspent funds in this?

I'm going to clear what the unspent funds are.

What's the unspent funds that we're talking about?

I love, because I don't think you're aware that you've had unspent. Well, I wonder if you're talking about the county's unspent innovation funds,

Yeah, so I'm not quite sure what that, I'm having a hard time making the connection between the two, because I know counties may have had unspent innovation dollars, but this is like a different program, and we're actually approaching it in a very different way.

Oh, okay. Thank you. Thank you, Chairman Javar.

Where are those approximately $100 million? Who has those?

And those dollars were allocated when it was AMHSA?

Okay. And it's the Department of Finance stands that those have not been touched,

And those $100 million are on top of the $55 million that is being allocated in the budget for the Commission?

Do you know how far back those funds go in terms of the month spent?

Please.

I'd be interested in seeing how these numbers, they seem very different stories I'm hearing here. I'd love to see if you are of the mindset that every single dollar that you have, it's already accounted for for projects, vendor contract already. I think I need a little bit more information on that. And then Department of Finance, you know, in your explanation for this, it was like it's contingent and available funds. The funds are there. It's just it's being reallocated to offset general fund. And I'm just wondering, the January proposal had a balanced budget without these shifts, budget solution shifts in them. And these are new, even though we have one time increased revenues. I'm just I'm trying to understand why the additional need for these budget solutions given that January budget was a balanced budget. We didn't come under in the projection of revenues. We came a bit over recognizing it's one time it could fall off. But because of that, I'm struggling to understand why they need to cut more or find more solutions.

But hearing your comments, I think the situation has changed in terms of our readiness for the future as well as our addressing of the budget deficit. It was balanced for the first year, given that we are now looking to, or the proposes to balance for the second year as well. Additional budget solutions were required to do a budget plus one balance. For Prop 1, you know, I went to a couple of the rallies for it and so forth. It was being advertised, measured as brand new investments for behavioral health. and we're changing the world with this, and it's difficult to then say we're going to supplement, we're going to supplant versus supplement. We've talked about this a couple of times in this subcommittee that we're supplanting current programs versus bringing new programs to it, which Prop 1 was supposed to do, especially with this fund. I'd be more interested. I think I'm struggling to understand if there's money or not and if there's ability to add to that. I do recognize that it's within the language of Prop 1, that it's up to $20 million. We are within the language of Prop 1, recognizing that. I am concerned that we're using this fund as a general fund supplant versus its intention of new programs and so forth. So that's the balance I'm trying to find right now. I look forward to continuing those negotiations with the three-party to find a way. I think the sticking point is the fact that applications or awardees are supposed to be announced the same day we're doing this budget. It doesn't seem aligned to do it. I think this conversation would have been a better conversation in January to give a little bit more time. You could have potentially halted any applications, but the fact that they already come in makes it a little bit more difficult with this. Appreciate the clarity on your point and nothing further on this issue. We're going to move on to issue 18. So moving to the proposed permanent 6.7 million ongoing cut to our community advocacy program. Essentially, this is shrinking the voices of those that the public behavioral health system exists to serve. Since the beginning of the Mental Health Services Act and now continuing on with the Behavioral Health Services Act, it's always been at the core of the foundation of this work of nothing about us without us. and that Proposition 1 added a new statewide expectation for community planning and integrated county plans, and really not just having that be paperwork, but really making sure that the right people are showing up, that they're understanding the system, and that they can advocate effectively so that the integrated plans can reflect what communities actually need. And the administration has been appropriately emphasizing that Proposition 1 requires a stronger, more inclusive community planning process that counties must meaningfully engage these stakeholders in developing integrated plans. If the state's raising expectations for county engagement, it should not simultaneously eliminate the only statewide funding source that helps underserved communities understand the system, participate effectively, and bring their perspectives forward. The Commission's community advocacy contracts are the state's practical mechanism to reach and engage underserved communities, reduce barriers, teach people how the system works, and ensure that participation is real and not performative so that county plans and state implementation can reflect the lived experiences of those who use the services The program funds trusted organizations to provide advocacy training and education as well as outreach and engagement on behalf of communities who face the greatest barriers to care. In fact, it is required in statute that the BHSA provides funds to assist communities and family members so that agencies fully consider concerns about quality, service delivery structure, and access. So eliminating this program would abruptly remove capacity delivered through 16 contracts serving nine underserved populations, including LGBTQIA+, diverse racial ethnic communities, veterans, K-12, clients and consumers, families, parents, transition-aged youth, and immigrants and refugees. And just to give an example of the type of work that's done under these grants, the California Association of Veterans Services Agencies, which is one of our grantees, did a review. This was under MHSA, but the same kind of work that could be done under BHSA. They did a review of plans from 13 counties in different regions across the state and found that although veterans were discussed, only five had actually included veterans-focused programs in their three-year plans from last round. So they could take that information to those integrated planning types of meetings and be able to advocate for those types of programs. And so, again, there's no other dedicated statewide funding source that supports this type of activity for advocacy, outreach, education, and engagement for these underserved populations. These contractors are community-based infrastructure. There are trusted messengers who can convene community-led events, connect people to services, and provide direct feedback to improve implementation of behavioral health services. Many of our contractors are midway through multi-year contracts, and so elimination would halt all the work underway and destabilize community partners at the exact moment VHSA depends on credible community engagement. And direct services alone does not fill this gap because many people can't benefit from services that they don't know about, that they can't access, or that they don't trust. These contractors are the bridge between vulnerable communities and the system they rely on for essential care. So for these reasons, I again respectfully request that the legislature reject the May revision proposal and maintain the $6.7 million of community advocacy. And now I'm going to turn it over to Kieran Savage, Sanguine, so that she can provide it. She's one of our advocacy grantees and can talk a little bit about the work that they do. Thanks, Kieran.

Department of Finance. Yes. So I would note that with the implementation of the Department of Public Health's population-based prevention activities, the administration has assessed that many of the activities of this grant program are duplicative of CDPH's state and local activities. It's important to note that CDPH's... Sorry. The administration values the voice and engagement of the populations that were historically supported by the commission's advocacy contracts. New funding for population-based prevention activities provides new opportunity for the state to support these populations. It's important to note that CDPH has identified populations of focus for population-based investments, which align with those populations targeted by this grant program, including Black, Indigenous, Latino, Asian Pacific Islander, and Middle Eastern populations, children, youth, and families, immigrant and refugee populations, LGBTQIA plus populations, tribes, and veterans. As part of CDPH's community engagement and coalition building, CDPH will work with state and local organizations to engage people where they are, where they're impacted, and in the communities in which they live. They will also work with communities impacted by systemic racism and discrimination, and communities that have been impacted by behavioral health conditions to develop a deeper understanding of the challenges and experiences to inform system-wide approaches and strategies. To support all voices being heard, CDPH's Proposition I Implementation Guide emphasizes the integration of local prevention into the local health jurisdiction community health assessment and community health improvement plan processes. Local health jurisdictions will be required to integrate convening and coalition processes into the community health assessment and community health improvement plan processes, and LHJs are expected to include representatives of the priority populations, those with lived experience and individuals who represent communities that have been impacted by behavioral health conditions. This will support the engagement of these populations in behavioral health systems. Finally, CDPH will provide funding to local health jurisdictions, CBOs, and tribes to support these efforts, implement locally-led activities, as well as training and technical assistance grants.

So the intent is that, so CDPH is under the May revision. The Department of Public Health would receive about $120 million. Of that amount, about half would go to local entities. So that would include local health jurisdictions, tribes, CBOs, nonprofits, as well as a portion of funding for training and technical assistance that would also flow through CBOs. Part of Proposition 1 is that local health jurisdictions reconvene and bring together coalitions and rebuild their community health assessment and community health improvement plans. And the expectation is that they will also, through these funds, build out the necessary convening and partner and coalition so that these conversations can be informed by those voices, the voices of people who have been underserved by behavioral health systems, with lived experiences, family members. So CDPH won't be the one at the state level doing that convening. They have their own convening process. but part of the funding would support these efforts at the local level.

on how their specific funding in their specific counties are going to be utilized? So there's a couple of pieces. So there's the Community Health Improvement Plan, the Community Health Assessment. There's also a component with the Medi-Cal Managed Care Plans as well and the county behavioral. So there is a lot of moving pieces but all of these really live on this notion that the people who are most impacted by the behavioral health system should be part of the discussion And I think that very closely aligns with the grant program And that what when CDPH is funding all these investments with the local level the expectation is that those conversations are happening with the consumers who are most impacted by these systems

About half of that would go to the local health jurisdictions. About 60 million across statewide?

Just for the first year?

Correct.

Yeah, absolutely. So what CDPH is charged to do is population prevention, right, which is a different goal than having communities advocate for how their needs are met throughout the continuum and the spectrum of services that counties provide. Counties are not providing only prevention services, and at this point they're providing very few prevention services. They are providing the full service partnerships. They're providing services all the way along a continuum, and we are giving them millions and millions of dollars every year to do that, right, because of Proposition 1. What CDPH is doing is funding organizations to provide prevention-type services and funding local health jurisdictions to provide prevention-type services. And it's great that they are engaging people in how they do those services. Really support that. That's great. That's an entirely different thing than making sure that we have community voices involved in the planning process for everything that counties are doing. We put dollars into making sure that counties have resources to make their plans. We have dollars, all the BCPs you've seen, making sure the state departments have resources to do planning and make sure they get things right. This is one teeny tiny program that puts resources into the community to be actively engaged in a planning process to get the services right. Anything to add to that?

So have has the the group that's getting funded with the six million on CDPH, have they started doing their work already? Yes, I'm seeing the audience saying yes. I don't have. Have we haven't released money? I've been allocated for that already.

So July one through this is when they're going to get 60 million dollars.

For just planning.

Got it.

So I'm wondering, you know, to your remarks, you analyzed, Department of Finance analyzed these and felt that they were duplicative in what the work of the advocacy, but the work hasn't started yet. Wouldn't we have better intel and better data once the work actually begins to actually adequately compare to see if it is, in fact, duplicative or not? I'm worried if we're cutting a group that has been doing the work now for over 20 years, who are now at this point, I think, pretty good experts in this space, and then starting a brand new program. It going to take a long time to tee up that advocacy group that I anticipate potential gaps in advocacy of these groups being at the table as this new brand new program gets its feet going and gets to understand the new funding sources of Prop 1. I would love data to help the case that this is in fact duplicative or not. It's 6.7 millions. It seems like a little jab. It's just 6.7 million dollars. And the Senate budget plan also balanced for two years without having to do these kind of cuts so we also were were were of the mindset that we should balance one plus budget plus one year without making all these cuts so it is possible our plan shows that it's possible so uh that's that's my concern um on that and also i think i've had a hundred thousand young people message me on on this and they don't get involved often so when the youth get get involved I think we gotta we gotta pay attention and and listen so I think that for me if you have data that you can show you can email my office that really shows that it's duplicative I would be interested in seeing that if not I think it'd behoove us just to wait a little bit just to see once that funding actually goes out and see if it actually does what we thought or intend for it to do I don't know if you have thoughts on

Do you believe their jurisdiction goes beyond to the restriction that the stakeholders believe that the CDPH program or group is only going to be focused on prevention services while this current advocacy group does the whole assembly line? or do you believe the CDPH coalition, that group, has the ability to get involved from point A to Z?

Right. I think that's the worrisome, right? They wouldn't lead the way. this group seems to be in front and center of those conversations while the intent is for that group to do all of it they might fall short in some of them but I hear your point on they been doing this for a long time Actually it the most engagement I gotten from the Department of Finance so I appreciate the back and forth here with you

We're going to hold the item open, and that will be on your commission. Thank you. I want to note, last time you were here, you were so excited with your presentation. and just very different. I also was very confused because usually the person that sticks next to Department of Finance is always aligned with them. And I was like, what is happening here? She's going to get fired. She's like against Department of Finance right now. But I got it. You're your own. Yeah. Covered California. We're on issue 19. Good afternoon, Madam Chair.

LAO any comments on this okay I think I might need those numbers one more time so for the silver you're gonna increase the amount of people who are paying zero zero dollars right now on premiums the amount paying the number paying zero dollars will stay the same okay so that's flat okay no more people are gonna go into that level that's that's it yeah the one that is from 150 to 165 they're going to get an increase or deduction, I should say. How much? About $10 per member per month. Okay. And then when does the $165,000 to $200,000 federal property level become eligible? That will happen for 2027. So when people start to renew in October, they'll start to see those new prices and that new eligibility. Start in 2027. Okay. And then how many people are covered right now? Right now, and I'm sorry, I didn't introduce myself.

That's right. And it had a great no on Part 8 of this agenda. This is phenomenal to hear. There was always concern from the Department of Finance on the solvency of this fund. Are we just more healthy now because we've kicked people off in health insurance in the state of California and they have to pay? Sorry to throw that in there. Oh, no worries. So why do we have all this? Yeah. Yeah. So with the health care affordability reserve fund, the reason why we have, you know, right now the projected ending fund balance for budget year 2026, 27 is approximately. 230.9 million and this is this includes the repayments of the general funds for budget year we're including repayments of 200 million and then for budget year on a plus one it's the 262 million repayment. And then the year after that would be $309 million. So in total $771 million coming from the general fund repayments. So it appears that this is sustainable to continue these subsidies for the foreseeable future. Correct. In developing this program, we wanted to kind of balance both providing more affordability access amidst the various kind of changes in the healthcare sphere, but also trying to balance that sustainability that if we're building a program, we want to make sure it has that longevity to it, like you mentioned. Min Lee, LAO, just to clarify a little bit, the current level of penalty revenues on an annual basis is about $290 million. The new level of expenditure with the augmentation proposed would be about $350 million on an ongoing basis. So there is a $60 million gap, but as the administration has mentioned, there are these loan repayments that are expected in the next two years, which will cover that gap. Yes. Okay, thank you for that clarification. I had a question. Yes, is this only for the Silver Plan? Anyone who's on the Silver Plan is eligible for these? We benchmark the calculation of your credit to the silver plan, but you can use it for any plan you want to enroll in. Okay I think what we saw what we seen and if you have any updated numbers I know we now six months into the new eliminations of the subsidies that in the beginning of the year we didn see a lot of people leave it We just saw them choosing a lower level plan Is that still the trend you're seeing right now? It is. We still have the most enrollment in silver, but we're seeing more shift to bronze to take advantage of a lower premium. And how will people become aware or how do you make people aware that this is coming in? maybe they'll now, because of the savings, they'll bump back up to a silver. We do that directly through our agents, our navigator partners, and then anybody who uses the system online will see those new savings. And then we do a lot of education for people if they can receive a more affordable plan. And in some cases, if someone can receive a free silver instead of bronze, we'll move them out of bronze into silver automatically so that they don't have to do any extra work. I'm really glad that California is in a position that is able to attempt. I know we can't backfill everything, but we're in a better position than others to be able to offset what happened in the federal government. So I appreciate this proposal in finding a way to do that. Hold the item open and move on to issue 20. All right. So issue 20, so this would be first the gender-free care augmentation. The merit division includes $26.8 million from the Healthcare Affordability Reserve Fund in 2026-27 and $13.4 million from the Healthcare Affordability Reserve Fund in 2027-28 and ongoing to augment the gender-affirming care program. This reflects an increase of $13.4 million compared to the governor's budget, which included $15 million. The augmentation aligns available program funding with updated costs reported by health plans. Therefore, it is a workload adjustment. The 2026-27 amount is higher than the ongoing amount because it provides an increase in funding for two coverage years. Coverage years 2026 and 2027. Ongoing years augment a single coverage year. I think I'm going to need that in a different way. I didn't understand. So we've allocated $15 million for that. The E13.4 is because the cost came in higher than anticipated. The 15 plus the 13.4, a little shy of 20, that covers two years. So to clarify, so in budget year, we're including an additional $26.8 million. So that is going to address both the need to augment both coverage year 2026 and coverage year 2027. Because with the coverage years, it doesn't nicely align with our fiscal years because it's January, December. So we have kind of those overlaps, if you will. And then the additional $13.4 million in 2728 is specific to ongoing coverage years. Okay. So adding all those numbers up. So if it's easier, just ongoing, the gender affirming care program will receive an appropriation of $28.4 million. So we start at a base of $15 million, we're adding $13.4 million to meet the needs of the costs. Okay, and then is it only for two years, but you said it's ongoing? This would be an ongoing To cover gender affirming Okay I remember I had a question earlier on if the funding has been utilized but the fact that we asking for more is it that it being utilized I will start I might need my cover California colleague to help I think when the there was initial estimates made when the program was developed but now that you know we're halfway through I think that we're getting more updated information from health plans to understand the cost of the program that's exactly right since this is the first year we have to pay for this as a state. Our health plans did their best to estimate last year. We asked them for new data early this year and they said they gave us the updated cost that it will cost more to make sure that we can cover these services for all of our enrollees. Okay, so that it will cost more. It's not that it's costing more. So we don't know if the enrollees are actually utilizing the services yet? They should be the same way they always have been. I think we just sharpened the pencil on what it's actually going to cost to provide this as a standalone funding. And is it that we give this these dollars as the claims come in or it's just no we pay them we pay them separately to our health plans and we do that on a process where we can reconcile and make sure we're paying for all the enrollees that we have. How do we know though I guess how do we know that that are we just giving out the dollars regardless of people the enrollees are utilizing gender affirming care services or how do we know that that's that all of is being used for that? The health plan gives us an estimate and then we're able to look at our claims data to make sure that that estimate matches what we're actually seeing in the care costs. Got it. When will we have a good review of this to see the enrollees, how many enrollees? Yeah, for any program like this, I think six months after the benefit year closes is when we have all the claims in and that's a great time for us to align on the estimate. January next year? So that would be June of 2027 to see the first year, the 2026 year. Okay. Thank you. Helpful. We're going to hold the item open, and that concludes Part A. We're going to move into public comment. Sorry. Don't worry. That's, oh. Go ahead. Good morning, or good afternoon, Adam Chair. My name is Dr. Luke Valencia. I'm here today speaking on the behalf of my students. In AB144, licensure for laboratory staff and professionals increased nearly 300%. I've had numerous students come to me distressed that this increase would make it difficult for them to pursue an education and a career in the laboratory field. Currently, the MLT licensure is at $0 and Clinical Laboratory Science is at about $179. it was increased to not every other year but every year and we are worried with the shortage of laboratory staff and healthcare professionals in California that this would further reduce the trained staff available to help the shortage. Thank you. Thank you. Thank you. Good afternoon I'm also speaking on the same topic. My name is Anjo Chahotsky and I'm a clinical laboratory scientist at Stanford Healthcare Cancer Center in South Bay in San Jose, California. Today I'm speaking on behalf of a coalition of 21 organizations including California based organizations, national organizations, and globally recognized organizations in laboratory medicine and pathology. We respectfully urge the committee to adjust AB 144 to restore public input and oversight that allows to CDPH to implement further exorbitant massive increases in licensure fees. So this 335% licensure fee increase places a major financial burden on laboratory professionals already facing workforce shortages and rising costs. We are already hearing from lab professionals near the border of Oregon, Nevada, and Hawaii-based professionals that they will forego their California licenses and not return to work in the state. professionals are also no longer willing to enter the state of California to work because of these increases in licensure fees. For context, New York's renewal fees are $170 every three years. California's fees are now the equivalent of $900 every three years. Thank you. Thank you. Thank you. I'm speaking on the same topic. My name is Valerie Trinev. Thank you for letting me speak, manager. I'm a clinical laboratory scientist. I work in a hospital laboratory on the Central Coast. I have five years of college, more than that of an RN. I provide doctors and other providers with lab results so they can accurately diagnose and treat patients. When you're in the hospital, you're going to see people in red. Red means blood, and this stands for the laboratory. We provide the doctors and providers with lab results so they can accurately diagnose and treat patients. I'm here to alert the Senate of the negative outcome that will occur due to the more than tripling of my license fee. This increase in my license fee is part of AB 144. Funding for lab field services was removed from the general fund by the governor, and it's expected that we run our own agency with our fees. In other words, we have to be self-funded. Other health care professions are not subjected to this mandate. My work is extremely important to doctors and other providers. If you ever have had fluid taken from your knee, I would look at it. If you needed a blood transfusion, I would make sure that it is safe. Thank you. Please help us help you stay healthy. Thank you. Good afternoon. Darby Kernan. On behalf of the EMS Administrators Association of California in support of issue 4 for 988 and behavioral health crisis continuum, we are working with IMSA right now on getting all the stakeholders together and so continuing this process is good so we support that and on behalf of the First Five Association we oppose the May revised proposal to eliminate the 10 million for innovation partnership funds as discussed today eliminating half of this grant program would result in the loss of critical funding that is needed to be awarded in July thank you thank you good afternoon madam chair Connie Delgado on behalf of the District Hospital Leadership Forum the 33 district and municipal hospitals in support of the 50 million dollars for distressed hospitals our District hospitals continue to struggle financially, and these funds can provide a lifeline so that the services can remain in the community. We are also here in support of HKIs, rural transformation, and the implementation as they work with district hospitals. Thank you very much. Thank you. Madam Chairman Javar, nice to meet you. Yamilet Rodriguez, I work for Youth Leadership Institute. I'm also a board of trustee for the California State University System. addressing item 4560 issue 18. Youth Leadership Institute is a statewide youth development organization that builds up young people to create positive change in their communities through youth-led research campaigns. We're in year one of three, leading the K-12 mental health coalition that includes the Bay Area, Marin, Eastern Coachella Valley, Merced, Long Beach, also Ventura County Office of Ed, Pro-Youth Families in Sacramento, and Two Feathers in Humboldt County. Please reject the May revised budget proposal that eliminates $6.7 million in behavioral health services funds allocated to have young people be the mental health advocates, researchers in their communities. Thank you. Good evening. My name is Andrea Gill, and I'm also a program manager from the Youth Leadership Institute, and I'll be speaking on the same issue. During the youth mental health epidemic, there are serious cuts to empower youth and community voices. we actually partner with CDPH and they look to us to how to engage young people in advocacy. And so with that, under this work that we've been doing, young people are able to analyze policy, educate their peers, and take a space in places where they don't feel like they belong. And so with that, they actually probably emailed you all last night. And then there's please reject the May revised budget proposal to make sure that $6.7 million is included to protect and enhance community voices in California and to ensure we're acting the act for what its purpose was. It was through LinkedIn. Oh, LinkedIn. Okay. Hello. My name is Anu, and I am with the Youth Leadership Institute, opposing issue 18. We urge you to reject cuts to the BHC's community advocacy program. As a previous youth member, now adult ally, who also benefited from youth mental health programs, it is important to remember that youth are the future voices and leaders of California. Without these programs, there wouldn't be hope for youth voices to shape behavior health policies. Thank you. Thank you. Hi, my name is Natasha Dosko. I'm also with Youth Leadership Institute from our San Francisco office, also opposing Issue 18. I support our juvenile justice program, Concrete Rose, implemented within SF Juvenile Hall, and data consistently shows the value of behavioral health programs during adolescent brain development and its success in averting the school-to-prison pipeline. Not only is this funding ethical, but it's also financially responsible. It costs half a million dollars annually to hold just one young person in custody. Martin Luther King once said budgets are moral documents. Please do not ignore youth voices at this pivotal moment. Thank you. Thank you. Hi, my name is Carolyn Flores and I'm with Youth Leadership Institute representing the Central Valley and talking about Issue 18. In the May revise, the proposed budget cuts is unacceptable that we are trying to solve budget problems by taking away $6.7 million from this work that young people are doing to advocate for their communities. advocacy contracts are guardrails to help make sure that the impact to community that they have a say in the policies that impact their daily lives We have 40 young people who are coming to the state capitol next week and they are those individuals that are in their first year of a three-year grant. And thank you so much for your time. I appreciate it, and please advocate for our young people. Thank you. Good afternoon, Chairman Javar. I'm Evan Fern with Disability Rights California. We're strongly opposed to the proposed elimination of the Community Advocacy Program and the 50% cut to the Innovation Partnership Fund. These investments are critical for ensuring that consumers, families, veterans, and other impacted populations have a voice in shaping our behavioral health system and that the state can test and expand behavioral health solutions that actually work. Eliminating these funds would silence community input and limit service innovation. We appreciate the committee for your important questions and attention to this critical issue. We urge you to reject these cuts. Thank you. Thanks. Good afternoon, Chair George Cruz on behalf of the California Behavioral Health Association. We just want to voice our opposition to the reduction of the Innovation Partnership Fund and the reductions of resources for behavioral health advocacy contracts. But we would also like to note our support for the population-based prevention funding and ask that the focus be on existing programs like the California Reducing Disparities Project that has well-documented ROI for the state's investments. We also would like to note our support for the gender-affirming care augmentation and the $1 premium subsidy program. Thank you. Thank you. Good afternoon. Michelle Johnston with the National Multiple Sclerosis Society. I'm here today in support of the $110 million increase for the Healthcare Affordability Reserve Fund. Most people with MS are diagnosed in their 20s, 30s, and 40s when they're just starting their career. And without access to health care, we are not able to get our disease-modifying therapies, and it can lead to disease progression, which prevents us from being a great part of society. Thank you. Thank you. Good afternoon. Linda Way with Western Center on Law and Poverty. Firstly, we want to appreciate the Senate's leadership and fully support your employer fair share proposal, which is expected to bring billions in and will be critical in staving off devastating Medi-Cal cuts. In addition, we support expanded funding for subsidies, as this will benefit low-income Californians in helping them to afford and maintain their health coverage. And finally, we support gender-affirming care augmentation, noting, though, that additional investments are needed to protect access to transgender care, particularly for youth. Thank you. Thank you. Good afternoon. Diana Douglas with Health Access California on issues 19 and 20 related to Covered California. Health Access supports the augmentation for gender-affirming care and the continued support for the $1 premiums. Health Access has long advocated for state funds to support lowered costs for Covered California enrollees, and to that purpose, we are deeply appreciative of the Governor's May Revi's proposal to augment the current $190 million with the additional $110. This will stretch our current affordability efforts, which are currently only for the lowest incomes. We urge the Senate to support this proposal, particularly as we're right now seeing the significant effects that lowered premiums have. Thank you. Thank you. Good afternoon, Madam Chair. Trent Murphy with the California Association of Alcohol and Drug Program Executives, or CADP for short. We support the augmentation to Covered California for the premium subsidy. We are in opposition to three items on the agenda today including the proposed cut to the CBH Innovation Partnership Fund the elimination of the million Behavioral Health Advocacy Grants and the million opioid Fund Reversion which redirects critical and limited dollars intended for state harm reduction projects Opioid settlement funds should be going towards their intended use of innovative programs that tackle the overdose crisis and not use for backfilling the general fund. Thank you. Thanks. Michael Henning, California Alliance of Child and Family Services. We represent nonprofit community-based organizations serving children, youth, and families across California, including providers of 988 call centers and behavioral health crisis services. We continue to support increased funding for 988 call centers. California has made major investments to build out the 988 crisis response system, and call centers are continuing to experience growing demand statewide. Sustained funding is necessary to maintain response capacity and ensure Californians in crisis can access timely behavioral health support. We're also appreciative of the work happening with CHHS and OES on the Press 3 option for LGBTQ plus youth. In Issue 17, the California Alliance thanks the Senate Budget Committee for questioning why the administration has reduced funding for the Commission on Behavioral Health Innovation Partnership Fund and the statewide advocacy contracts. We strongly oppose this proposal and they may revise. Thank you. Thank you. Nicole Wardleman on behalf of the Children's Partnership, strongly in support of the Covered California subsidies, the gender-affirming care investment, and opposed to the continued cuts to 988. Thank you. Good afternoon. Nora Angeles with Children Now. Proposed cuts to the Innovation Partnership Fund and advocacy contracts under Issue 18 will directly impact youth mental health. Doing so to backfill an expensive experiment on the backs of existing programs we know work is short-sighted and should be rejected. We also support expanding covered California subsidies. And we'd like to say that the federal administration has singled out transgender youth health care and access to supportive services from the day they took office. Children now support state funding to backfill dollars lost to federal cuts. Thank you. Thank you. Good afternoon. Tiffany Murphy, Chief Operations Officer with Mental Health America of California. I stand here representing MHAC and our partners within our youth and our LGBTQ plus contracted programs that are funded by BHSA advocacy dollars through the Commission for Behavioral Health. We are in strong opposition of the proposed elimination of these funds. These proposed cuts would create long-term and potential irreversible impacts across California's behavioral health system. Advocacy is not something that we only focus on changes that are needed, but also the protection of the things that are working. These funds are an example of what needs protection. The MHSA, now BHSA, was approved by voters with the intent of the funding not only for direct services, but also in supporting the infrastructure necessary to make these services effective and community-informed and also reflective of them. Thank you for your time. Thank you. Howdy. Shelby Gnos of California Youth Empowerment Network, also known as Kyan. I'm also representing on the margins Sonoma County, Moss SSF Sacramento, and KYCC in L.A. County. We strongly oppose the budget cuts to CBH community advocacy grants. KINA served more than 2,400 transition-aged youths across 34 California counties, reaching both rural communities such as Trinity, El Dorado, and Humboldt, and urban regions including Los Angeles, San Diego, and Sacramento. Thank you Thank you Good afternoon My name is Marona Gonefer with Cal Voices peer organization I urge you to reject issue 18. Cutting the 6.7 million behavioral health advocacy contract won't balance the budget. It will eliminate vital funding for community organizations that mobilize and organize the BHA target population through free training, webinar conferences, and advocacy opportunities to engage counties, agencies, and the legislature on crucial policy changes. Please reject the proposal and ensure community voices are heard. Thank you. Thank you. Good afternoon. Kevin Buffalino with Sacramento Food Bank and Family Services. We are a state funded diaper bank and a member of the California Association of Diaper Banks. We appreciate the governor's recognition of diaper need here in California, but would like to note that there is already a state funded diaper program that's highly effective. Over the past seven years, the diaper banks have provided over 200 million diapers. That's in the human services section. I'm only taking public comment for health issues right now. Okay, thank you. Karen Savage-Sanguane on behalf of the California Pan-Ethnic Health Network. on the HKI issues now. On issue 6 on AB 1312, we support the resources that HKI is asking for, including using penalty revenue for their costs. This is a legislation we co-sponsored that simply says that hospitals shouldn't send bills to people we already know qualify under law for financial assistance. We support the funding under issue 7 for your SB 660, although you raise a good question about whether there's non-general fund sources we could use. And issue 8, the healthcare payments database we think is an invaluable resource for making healthcare better and more affordable. So we support the funding for that. And on issue 11 on distressed hospitals, we would just say that, you know, as the legislature continues to consider additional hospital grants, we think it's really important that there be continued discussion about long-term sustainability of hospital funding and want to emphasize that point that HKI made about limitations of the data they currently are able to collect from hospitals and that we need in particular more system level data for hospital systems. So thank you. Thank you. Thank you, Madam Chair. Dan Seaman on behalf of WellSpace Health. We represent 30 of the 58 counties 988 providers. We respectfully request the full 105 million that was in our original letter reflective of the true need. Also on behalf of Immigrant Legal Resource Center, support the legal defense funding that the Senate has proposed. Thank you. Good afternoon. My name is Patty Garcia with CalVoices Peer Advocacy Program. I urge you to reject the May revised proposal, which threatens the Behavioral Health Advocacy Program. The program plays a critical role in empowering our BHSA target populations. Protect our voices engagement by rejecting this proposal. Thank you. Thank you. Hello. My name is Christine Dela Cruz. I'm with Cal Voices. I'm asking that you please reject the May revised proposal to cut behavioral health advocacy program. This initiative is important for local BHSA populations and for community engagement. Protect our voices and engagement by rejecting this proposal. Thanks for coming and joining us today. Good afternoon. My name is Kelsey Rosenberg with Cal Voices. I urge you to reject the May revised proposal, which threatens the Behavioral Health Advocacy Program. The program plays a critical role in empowering The BHSSA target populations. Protect our voices and engagement by rejecting this proposal. Thank you. Thanks. Greetings, Chair. My name is Danny Thericol, Public Laws and Coordinator with Mental Health America of California, as well as Coalition Partners Mental Wellness Center and Mental Health Association of San Francisco. Prop 1 requires county behavioral health departments to engage community stakeholders in the development of their three-year plans, using funds from the behavioral health services and supports allocation. At the same time, Prop 1 directed more than a billion dollars away from that allocation into housing, leaving counties with significantly reduced funding for community stakeholder engagement. The Community Advocacy Grant Program is the only remaining funding source unaffected by Prop 1 that ensures underserved communities can continue to have a meaningful voice in the behavioral health decision-making space. We respectfully urge you to protect this critical funding and reject the Governor's May revision proposal. Preserving this program is essential to maintaining community engagement, equity, accountability, and transparency in California's behavioral health system. Thank you. Thank you. Good afternoon, Senator Mendevere. Anthony Garibaymena, Program Manager at our LGBTQ plus Inclusivity, Visibility, and Empowerment Program of Mental Health America of California, representing all 14 of our LGBTQ plus partner organizations across the state who are currently breaking down barriers to affirming care. We are entering year three, the implementation stage, with five active regional campaigns underway, including an affirming provider directory, peer support training, and safe space networks programs. Cutting funding does not pause this work. It ends it and leaves LGBTQ plus Californians without resources, providers, and spaces they need. We strongly oppose the reduction of resources for behavioral health advocacy contracts. Thank you. Thank you. Good afternoon, Madam Chair. Nice to see you. speaking on behalf of the same issue, opposing issue 18. My name is Elijah, program coordinator for the LIV program at Mental Health America of California. I'd like to share a direct quote that we've been able to collect via these behavioral health advocacy funds. Solutions aren't in sight and they don't want us to exist. I have lost the energy to fight. 73% of the LGBTQ people we surveyed reported serious mental health challenges related to their identity in the past year. Only 29% of them reported meaningful access to culturally competent care. These are Californians in need. Our community, our people. These funds are critical for the ongoing efforts to support this community and ameliorate the issues that they face We strongly oppose the reduction of resources for behavioral health advocacy contracts and urge you to do the same. Thank you. Thank you so much Good afternoon, my name is Grace Gallagher and I'm the advocacy program manager with Painted Brain a peer-run mental health nonprofit Every day I work directly with mental health clients and unhoused individuals trying to navigate incredibly complex systems Because of this, I am urging you to oppose the elimination of the community advocacy grants and also to reject the May revision cuts to peer support and community-based behavioral health services. California cannot address this crisis while at the same time cutting the workforce and programs helping prevent hospitalization, homelessness, incarceration, and crisis escalation.

Thank you.

Thank you.

Thank you.

Thank you.

Thank you.

Thank you.

you. Budget Subcommittee number three in Health and Human Services is going to take a 10 minute recess and then we'll continue with Part B. Okay, we are now in Part B of our today's agenda. We have moved into the Human Services part of it and we will start with Department of Ag. Thank you and good afternoon.

Okay. No problems here. Hold item open, move on to issue number two.

LAO, anything to add here?

Okay. A lot of questions in this space. A lot. And I'd love to see your point of view. I've been personally reached out. My own AAA is up in arms. Up in arms about this. So I'd like to hear your perspective because they're of the mindset that this dropped right before public comment closed, removing the ability to really share input on the actual if proposal. There was public comment on everything else, but the proposal dropped in the middle of public comment. So it was really hard to adjust. They only had a week left. So I think that it's not, I don't think that was an appropriate time to drop a brand new proposal when half of the public comment had already ended. I'd love a little bit more. I have a lot more questions because this is just a big change. I'd love to hear, give me more than what you'd give on public comment on your first year on AAAs. Appreciate it.

Kathy Mossberg, representing the AAAs. We've made comment before on this and on the Assembly side. I will say we were surprised, and we've shared this with the Department as well. We were surprised by the timing of the trailer bill. We understood this would be a next-year issue, and you are correct. It is our belief and understanding, and what we've said is we only recently finished public comment. We appreciate all the comments that were noted here. We think they deserve time and attention to be addressed and look through before we do this. We've also looked and been in contact with the federal folks. They've indicated they've already approved our plan. This is not needed for that. We understand there is a legislation that passed a couple years ago that does say the legislature should be notified if there is a change in the funding formula. We understand from the department's perspective that is what this is. We don't think that's necessary. There's been no changes currently in the AAA structure or the number of AAAs. And so we think the timing and the rush to get to this is unnecessary. The other thing we would just note is you've got, to your point, you've got winners and losers, right? You've got half of the 12 are winners, 12 are losers, and some kind of sit in the middle. And it's not as if even with these five priorities that, you know, folks still have to provide the same services across the state. And so we really, as an association and as what you're doing here, we have to look at how this looks for the senior population across California. We can have winners and losers. And so we want to have a broader discussion. We were hoping, and we actually, I think, reached out to Elizabeth and folks on the Assembly side earlier this year to have a discussion around this issue. And we're told this will be a next year issue, not by your folks, but also internally what we were hearing from CDA as well. So we were surprised by it. We're opposed to it. We'd like you to reject it or modify it so we can have a year to kind of have this discussion. Thank you so much.

Thank you, Senator. A few points there. The factors were determined by our AAA partners and the C4A, and they have been in effect since January. They were developed by consensus, so there should be no surprise about the five factors that we're focused on. That was a consensus process, and we're happy to share.

The formula was developed by the AAAs and C4A in consultation with CDA, and we arrived at the formula that's in front of you earlier in the year. We do believe there is a deadline in September with the Roth bill, Senate Bill 1249, and we are on notice by our federal oversight agency, and in this climate it's very important. as part of our compliance with the Older Americans Act that we update the formula in the letter that was addressed to the governor in September. It's now been eight months. Part of the federal approval process requires that our legislature review and adopt the formula before we submit the package to the Federal Administration for Community Living. In terms of the public comment dropping, there's a bit of confusion. One of the requirements of the Administration for Community Living is that we do seek public comment. This is different from the regulatory process. So the public comment that was solicited earlier this month is on schedule for our submission to the Administration for Community Living. It was not the public rulemaking process. It wasn't a state regulation. It was public comment for the purpose of informing the formula that had been developed by the AAAs and C4A, and it's augmenting their input over the last 18 months where we've held a dozen webinars. We had survey tools. We had calculators that every AAA developed, you know, entered their own data, provided us feedback. We iterated. We presented with a second draft. We heard loudly that the formula could not impact rural providers. We heard that universally from our AAA partners. We iterated, had a second draft. This is now a third draft, and that is all based on feedback from our AAA partners. and C4A.

That is correct. And we've been in close conversations with the city of Los Angeles and the county of Los Angeles.

they taking care of They have the largest number but we have five factors It very important for our federal oversight agency that we focus on the populations with the greatest social and economic needs So we don't look solely at population. We look at the other four factors as well.

That is possible, and we'd be happy to run the calculations for every planning and service area. Unfortunately, the Older Americans Act is not on a per capita or caseload basis. And so these are general universal funds for a large region to provide an array of services based on local assessments, local planning, and local decisions.

Since 1996. How do they expect to continue that same level? We would suggest that that's why we need to make these decisions now so that all planning and service areas can plan accordingly and make adjustments. If they're seeing an increase or a decrease, that would be very important. We also will be sharing with you. We have data that also shows underspending by many of our AAAs. year over year over year, equal to the amounts of the cuts. That is the case in Los Angeles with both the city and the county. We've had intensive technical assistance over the last couple of years to address their underspending. These are dollars that are not reaching the community, not serving older adults, not helping people with disabilities, and not supporting family caregivers.

No.

Yeah.

So in the current formula, how it works, carry over, every single AAA gets 5% of what is unspent. The rest gets put in a pot and allocated.

That's right now today.

So the new formula will require that you do a 90% expenditure rate. And then you can get unspent funds from other.

Exactly.

They reach the field again.

They get to roll them over or five percent comes. OK. The current formula is extremely complex, more so than it needs to be, but all AAAs today retain 5% unspent, and then it gets pooled and allocated.

They will be eligible to now use any dollars that have been unspent in other counties Because rural counties are getting a huge jump There a potential that they going to have unspent there that going to come back down to the counties who need more And you see when we provide that document over to you of the unspent it is the only areas that have 100% spend rates are some of our rural partners. There are no counties that are indicating at this time 100% spend rates.

The admin base. The admin base. Correct. The programmatic base will be that 21-22 hold harmless that the director had discussed. So programmatically, nobody will be under their 21-22 allocation rate.

So a few years ago, legislature, thank you, awarded the network $3.3 million general fund admin for each. So there's 33 area agencies, so there was a $3.3 million augmentation in general fund for admin. There's also the federal share that goes to the network. And in the last 30 years, although incrementally, every single year that has increased. So it'll be just taking existing funding and moving away from that $50,000 up to a $250,000 base using the general fund augmentation, using the federal funding that is currently available. and then the remainder will be allocated based upon the same factors.

Everybody just gets $100,000 on the top. So it's $50,000 federal fund, $100,000 general fund for the last four years or so, but now we're going to just bump that up to $250,000 for everybody, a combination of federal and general fund, and then any remaining federal fund will be allocated based on the factors, and there will be remaining federal funds. Okay.

That one was something that I'm actually very proud that we reached that consensus among the network. 21-22 was about midway in our slow – not slow, actually. It was a really, really rewarding climb in nutrition funds. Beginning in, I believe it was 2021 or even 1920, we began to move from $8 million in nutrition being our base level general fund to now we have $60 million. So there was year over year legislative investments that allowed us to increase that base.

Yes, it was. And so that was wonderful. So that is an ongoing increase to the network. So we used 2122 because it was about midway. We used too close to today, and it negates any of the work that we've done with the formula, any of the feedback we've received from the network. But using 2122 does provide for some of that increase to be now built into their programmatic base funding levels.

The way the formula is proposed, 12 planning and service areas will see a reduction, 21 will see an increase. In terms of the guardrails, the process for every planning and service area is they do a local needs assessment. They develop a local area plan, and then they establish programs and services to meet the needs of their local community. That cycle repeats every four years. Over the history, 50 years plus, there have been years where AAAs have less money to work with, more money to work with. They always respond to their local area plan. And the AAAs are very innovative in terms of looking for ways to serve more people through contracts, through, you know, sometimes they bring services in-house, sometimes they contract out, they change the terms of their contracts. So it's really up to the AAAs how they use their allocation, whether it's an increase, flat funding, or a decrease, they get to choose in their local community. I can point to nutrition funding currently where we sit across our network of 33 AAAs. Some are spending every dollar and they want to exhaust their funding. Others are holding back funds and establishing wait lists. One, you know, a AAA may decide to provide one meal a week to a lot of people. Another might decide to provide three meals a day to a select group. That is their privilege to do that, and that's part of the local autonomy and local control. And so in terms of guardrails, it is no different from every other year when they look at their budget. Sometimes during COVID, it swelled by hundreds of millions of dollars. In 2008, in the recession, it reduced. So our AAAs are accustomed to fluctuations. Even with the current formula, we adjust every year with the current factors that we have, sometimes federal money, you know, there's small increases. And so they make those adjustments every year based on their local needs and their local plan.

And I would add it is hard for every AAA in our state to serve a growing aging and diverse population. There's huge unmet need. Nationwide, AAAs provide services to around 15% of the older adult population. In our state, they serve about one in nine older adults. And I have a lot of empathy for AAAs when the expectation is that you will meet the unmet needs of a large community, as large as Los Angeles County, or a small rural community, because the resources do not match the need.

How do we then meet that silver tsunami if we don't fund by the numbers? With the proposed factors, we do look at the numbers. That's one-fifth of the formula is the 60-plus population, so that is under consideration. Statewide Department of Finance demographic data will show every community is growing but some are growing much faster And our rural communities the Central Valley the Inland Empire they are experiencing the most rapid growth of the older adult population So if you look at the data, yes, L.A. County has a huge number and is experiencing growth, but proportionately, the percentages are increasing much more dramatically in more affordable areas of our state where people have relocated over the last three decades.

Yes.

Yes. Yes.

Yes.

plan for the year 2030. We want people to be prepared and we want them to make adjustments with their local advisory committees, with their boards of supervisors, with their stakeholders and vendors and contractors. And this is part of our effort to be transparent and allow everyone to plan for their future.

Our understanding is that regulations are not required because Senate Bill 1249 was very explicit about updating the interstate funding formula. So we do not plan to have a regulatory package. The public comment, as I mentioned, was to enrich the conversation. Our engagement to date has been very targeted, working exclusively with the AAAs and C4A. And by opening up public comment more broadly, we wanted to hear from more stakeholders. We've had very specific meetings with the AAAs because these are their programs, their agencies, and their services. So even though this won't go into effect in 2029, we won't be submitting this as part of our state plan in 2028, it was this department's interpretation of Senator Roth's bill that you had to bring a proposal by September 26th to be in line to meet the legislation. Yes, that is correct.

Part of the bill allows an opportunity for changes in the planning and service areas, and it is difficult for a nonprofit, a joint powers agreement, or a county to plan for any of those changes, expansions, consolidations, if they don't know what their funding will look like.

Hi, good afternoon, Chair and staff. I'm Daphne Hunt, Chief Deputy Director with the Department of Community Services and Development. In this issue, we have two items that are largely administrative in nature, really seeking to streamline our budgetary processes. Would you like me to go through both together? Sure.

Earned Income Tax Credit, or CALI-ITC, this is the Education and Outreach Grant Program for Outreaching Education Grant Program activities. CSD administers the CALI-ITC Grant Program under an interagency agreement with the Franchise Tax Board. The CALI-ITC program is authorized annually, but total funding can vary with the passage of each budget. So what this technical adjustment would do is reduce administrative requirements associated with adjusting the reimbursement authority after the budget and instead would create a broader standing authority for these reimbursements. Okay, and our second item details requests for an increase in our existing general fund loan authority for state operations from $3 million to $5 million and an increase in the general fund loan authority for reimbursement of the local agencies that provide services under our federal programs from $40 million to $305 million. Approval of this item will help ensure that CSD is able to efficiently cover salary and overhead costs and reimburse the local agencies, many of whom are nonprofits, for their expenditures in a timely manner when there is a delay in federal reimbursements. Happy to take any questions.

Thank you, Madam Chair.

Can you expand a little bit more what you mean on the need to authorize the amount?

Yeah. And I think we had a conversation, Department of Finance, but for the public, if you can elaborate on the assurance that this funding is going to be coming in for the federal government.

Deferred to Stephanie.

Not even like a range?

Okay. Thank you.

Good afternoon, Chair and staff. Kim Rutledge, Director of the Department of Rehabilitation. Today we are also asking for an increase in our general fund loan authority of up to 50% of our federal award in the event of a federal funding lapse. So for the Department of Rehabilitation specifically, our vocational rehabilitation program, which is our largest program that we oversee at DOR, is 80% funded by the federal government through the Department of Education. Recent federal shutdowns have led to lapses in federal funding, which have resulted in short-term delays in the department meeting our fiscal obligations. and it also results in delays to direct services to individuals with disabilities seeking the employment services that we provide through the VR program. Some of these delays will include tuition and books, payments to vendors and education partners. This loan authority increase would ensure our continuity of services during future federal budget shutdowns. It's technical, as you mentioned, and there's no other general fund impact to the state.

We're not currently waiting for anything. During the two federal shutdowns earlier this year, we experienced a significant delay in our funding. So even after the government opened back up, it took about six weeks for us to receive the money that we were already entitled from the federal government. So and at that point we had to delay payments to vendors delay tuition payments for individuals who are going to school for training to be able to go into employment So this is just going to give us the loan authority in case something like this were to happen again We would be able to take a loan of up to 50% of our federal award But right now we're good now. We've received the money that we need to receive. This is just in anticipation of future such situations

Thank you.

madam chair staff Peter Vinka director of the department not only did I bring notes but I I also provided right before the hearing follow-up from my miss at the last one. I have it in hard copy should you wish it today. I appreciate the opportunity to come present the May revision budget. The total May revision budget is proposed as outlined on page 9 of your agenda at $21.6 billion. This is $300 million more than proposed for our department at the governor's budget and a net increase of almost $3 billion year over year. Stating the obvious then, because that's an increase, there are no budget solutions proposed in the Governor's revised May revision budget. I do want to call out that net general fund is down almost $80 million, and federal fund claiming is anticipated to be half a billion higher. This is an opportunity to thank hardworking folks at the department and at regional centers who have been madly figuring out whether we're claiming all of the federal funding that we should be claiming, and also appreciation to the legislature. Last year, you approved a budget change proposal to provide positions dedicated to this work, so thank you for that. Caseload is slightly lower in the current year, almost 2,000 people below the prior projections that we had at Jan 10 budget, but we're still projecting to grow by 39,000 people in an average monthly caseload, reaching 527,000 individuals next year. Along with our $21.6 billion budget proposal, your agenda on pages 9 and 10 lists several proposals in our budget. I'm going to call out two that we consider particularly substantial, although of course they're all should be approved. Both proposals are responsive. I have to say that, you know that. Thanks for laughing with me. Both proposals are responsive to concerns we've heard from the community. They are policy proposals, but also fiscal proposals. More importantly, They are equity-focused and advance the right of individuals to live in the community. We will talk through both of those proposals in more detail as we go through the agenda. But very briefly, the first proposal would establish an equitable and consistent needs assessment process statewide across all regional centers. Access to services and assessment of needs should not depend upon where someone lives in California. This is a multi-year investment starting with $11.4 million in year one and declining over time to $2.8 million ongoing and includes statutory proposals to make it happen. The second proposal would limit in the future the duration of an individual's residency at both Porterville Developmental Center and at Canyon Springs Community Facility. These state-operated facilities never were envisioned as long-term living arrangements, yet our longest-term residents at each of those have been there for 27 years and 19 years respectively. California can and must do better for those for these people as well as similarly situated individuals at those facilities On both we appreciate the expressions of philosophical support from all sectors of the community We have heard requests and appreciated a conversation last night with legislative staff to increase the clarity in the proposals, periodically report progress, seek approval prior to implementation, and ensure adequate engagement and representation with the community as this work progresses. These are reasonable requests that we're prepared to accept, and we have promised already to provide updated language to address those concerns. I will also just add in closing, both proposals have multi-year time frames. This is a lot of time to engage and plan and direct resources and efforts before we affect the lives of individuals. There are complex things to work through, but we need to start moving in those directions. One of our other proposals, which I will talk about in a moment, is to merge the community placement program and the community resource development program. And that's really related to that residency time limit proposal in that it will allow a more streamlined and directed development of the necessary residential alternatives within the community. I appreciate the opportunity to provide an overview of the May revision proposal. Thank you. I will touch briefly. I mentioned the budget on page 9, the overview of each of them. I'm going to defer page 9, number 1, on the equitable and consistent needs assessment to my colleague Michi Gates as part of issue number 6, if that's okay with the chair. We can go into it in a lot more detail. The other investments in our budget, certain early intervention providers provide services within a center, within a building, rather than traveling into the home of a family. In our implementation of rate reform, it was identified that those facility-based early intervention providers need their own dedicated rate model. The budget includes $15 million to authorize, to implement that model. Also in the Jan 10 budget, number three, we proposed a new federal grievance process. The May revision does two things. One, it adds a position for each regional center to implement and manage the incoming workload that they will face, as well as move its implementation date from July of 26 to February of 27. We have an important health and safety project at Porterville Developmental Center, both for rehabilitation of some of the residential units, as well as, importantly, the fire sprinkler system. So there's a capital outlay proposal there for $7.9 million. And lastly, number five on page 11 is a routine update. Our budget has gone up a little bit, and we've routinely had General Fund Loan Authority equal to 20% of our federal funding due to potential lags in the claiming and receipt from the federal government of those reimbursements. I will stop there. I'm happy to answer any questions.

Thank you. I haven't figured out microphones yet. So on issue 6, I'll give the brief overview of each of the items and also answer the questions. I'll answer the questions on equitable and consistent as I give the brief overview. So for equitable and consistent needs assessment, what we're proposing to do is advance equitable access to the regional center system, so those who are applying for eligibility, and also increasing equity in the identification of needs for those already in the regional center system. So with regard to standardizing the eligibility assessment during the intake process, currently each regional center does Lanterman eligibility terminations differently. And so eligibility consists of two pieces, determining whether or not someone has one of the qualified developmental disabilities, as noted in statute in the Lanterman. And then secondly, whether that disability is substantially disabling. Both of those things are in statute currently, but what statute doesn't do is tell regional centers how they're going to determine whether somebody meets those two eligibility criteria. And so given that each regional center does it differently, and so there is a lot of confusion amongst those who apply for services. Amongst other community advocates as to why some people are eligible and some aren't and that it seems like it One regional center maybe somebody would be eligible and another one they would not so there is a lot of distrust and dissatisfaction In access to the regional center itself We have heard this clearly over and over again in the many stakeholder meetings we've held as we work to standardize the intake process per SB 138. It's also reflected in data such as diagnosis of autism in caseloads across the regional center with variability ranging from 33 to 63% as a percentage of autism caseload to total caseload. So clearly there is variability in how those diagnoses are reached. So that's the first part of this. The other part is modernizing a tool, providing a new tool for regional centers to use to assess individual needs. And so what that would do is currently regional centers don't have a good tool for doing that. And so this would provide an objective tool for planning teams to use, one that would be person-centered and like the current tool and provide the planning teams further insight into what needs a person has and thereby giving them the platform to say this is where services and supports would be helpful and so we're hoping that that would address and improve equity for individuals in the regional center system in terms of receiving the services and supports that that they need whether that through regional center funding or generic resources or other sources So both of these are very large tasks And so we are proposing statutes so that we maintain this as a transparent and accountable process that we have all stakeholders involved. Both processes would involve thorough engagement with stakeholders for input so that we would not be doing this in a vacuum. So that is the proposal. In terms of the question about how this might change intake for individuals and families entering the system, what it would do is it would standardize the process for determining eligibility. So it should improve understanding, transparency, consistency, so that people understand exactly why they were made eligible or not made eligible. And that that would be the same at every regional center. And so it wouldn't matter which regional center you apply to. It does not change the criteria for eligibility, so it should have no impact on caseload. And that's the answer to the second question, because it does not change what developmental disabilities qualify, it does not change what level substantial disability must be at, so it should not have any impact on caseload. Okay, moving on to the next item, merging the CPP community placement plan and the community resource development plan. So the CPP community placement plan has been in place for a long time. It has been a way for the department to provide funds to regional centers to develop resources. It was instituted to develop resources for individuals living in developmental centers. Developmental centers are now closed, except for secure treatment at Porterville. And so once that happened, then the CRDP Community Resource Development Plan was also put in place to address resource needs for those who are in the community. Given that regional developmental centers are closed, we see no need to continue the CPP. We'd like to simplify things, consolidate, and put all of the energy into the community resource development plan to support regional centers with developing resources for those who are in the community but in more restrictive settings, but also to support them with transitioning individuals who are Porterville Secure Treatment, Canyon Springs Secure Treatment into the community. So that would be the focus of the CRDP and connected with the next item, which is the state-operated transitional and rehabilitative services. The statute that we are proposing would also allow us to be more directive with regional centers about the priorities of the resources that need to be developed, dependent on the populations that they have in these more secure treatment settings. So the next one, item three, state-operated transitional and rehabilitative services would allow us to put Some time limits on how long individuals can be at Porterville Secure Treatment in Canyon Springs. We have individuals who have been in both settings for far longer than we believe they should be. 27 years is the longest at Porterville, 19 years at Canyon Springs. So with these two proposals combined, we would be directing regional centers, supporting regional centers to develop resources to get people out into the community, out of these secure treatment lock settings. and also the plan with the timelines is that we would be using then supporting regional centers to use those settings as the training rehabilitative settings that they should be, making them more therapeutic and part of transitioning people and readying them for community placement. We have put the timelines out for those time limits. So the proposed time limits are two years. Each Canyon Springs would be a two-year limit on stays. And then at PDC, individuals are admitted on 1370.1 to be trained, tested for competency. So they come through the court system on criminal charges that are found to not be competent to stand trial. They come to Porterville on 1370.1. There's already a two-year time limit on that for training to be restored or found not restorable. And then beyond that, individuals who have been there a long time are on 6500s, danger to self or others. This would put a two-year time limit on that 6,500 period of time. That would not go into effect. We're not proposing that to go into effect until July of 2031. The time limit on Canyon Springs would go into effect July 2027. So we are trying to give ourselves the regional centers ramp to develop resources, resources that the department would support regional centers with developing in the community so that we make sure we have the capacity for these individuals. So that was number three. Why am I losing number? Rate model update tailored. Oh, I need to turn the page over. Okay. Okay. Rate model update tailored day services. Tailored day services has been in existence for a while. It's not a new service. It was developed entirely to provide more tailored, as its title, tailorable services for individuals one-to-one as an alternative to regular day program services. This proposal just provides some additional flexibility for tailored day services and removes one of the limits on its use, which was that it could not be combined with employment services. So this will just make it possible to combine in the same day tailored day services along with employment services, which helps us to support our goal of increasing employment for individuals with developmental disabilities So it a very simple update just wanting to give more flexibility to the services provided and opportunities available to our individuals. Rate model update, family teaching model. Family teaching model is also a service that's been around for a while. However, it's always existed and been funded under the family home agency model. However, they are two very different services. Family home agency, individuals live with a family in their family home. Family teaching model is a very different model in which individuals have their own living area. and there is a support staff person who has their own very separate living area and it is not that support person's home. So it is set up very differently, it's developed very differently. So we're just simply proposing that it have its own service code and own rate and recognize that it is an entirely different service that serves a different purpose. And we would expect that the rate would be in line with FHA, similar to that rate structure. The next one, state-operated facility purchases, is a very simple one. We're just simply asking. So, for example, our STAR homes are acute crisis state-operated homes. But they are truly just like the homes we all live in. They're in neighborhoods, and they have individuals living there receiving acute crisis supports, and state-operated staff need to be able to go to the grocery store, buy food, other kinds of typical daily supplies. We're just simply asking that they be able to make those purchases in a simpler way as opposed to the very cumbersome process that is required right now. Because these are just small purchases to buy groceries and things like that. So that's that request. And then I think you're going to cover number seven. Number seven, very briefly, this is a request to delete obsolete statutory requirements. As my colleague, Chief Deputy Director Gates mentioned, developmental centers are closed. We have seven different reporting requirements associated with the closure of those, and we think it's appropriate for public transparency to repeal those requirements. There was another report on best practices that was completed over 15 years ago. There's a proposed repeal of a requirement to report on day program rates. And while important, in 2024, AB 2423 required the update of all rates every two years. So we don't need to just do the day program reporting. There's also a requirement in statute to report separately on the budgets for developmental centers. As we mentioned, they're closed. Porterville is our last one, and that budget display has already been displayed in the budget every year for many years. And then there are two really really older ones One is a 2001 study of purchase of service expenditures and the other is a 2008 report on cost containment that subsequently those measures were implemented and evaluated So we believe some cleanup and public transparency could be improved in terms of what people should actually expect from us in repealing those outdated proposals. Thanks, and we're happy, either of us, to answer any further questions you may have.

Good afternoon. Karina Hendren, LAO. For Issue 5, we just had a few comments, and we'll go in the order of the items in the agenda. For number 1, the budget change proposal on the equitable and consistent needs assessment. The department has noted that this proposal is related to SB 138, which was budget-related legislation enacted in 2023 that codified all of the standardization efforts across regional centers. The department is now proposing to build upon the requirements in SB 138. And to this end, we characterize the proposal as somewhat discretionary since it is kind of going a little above and beyond SB 138. 38 and we generally recommend as we've noted that the legislature apply a high bar for new discretionary spending proposals in light of the projected structural deficits For items two and three the center-based early start services and the HCBS federal access rule We consider these both to be non-discretionary the first number two because it implements a technical adjustment to rate reform and the second, number three, because it's implementing a federal requirement. And for those reasons, we have no concerns to raise at this time about either of those. And then for number four, the capital outlay at Porterville. Similarly, this one is supporting near-term activities to ensure health and safety, and so we don't have any concerns on that one. And then moving on to issue number six, which is the trailer bill proposals. We only had comments on one trailer bill proposal, which is the state-operated transitional and rehabilitative services. So over the weekend, we had initially sent a recommendation to the legislature that with the significant policy considerations raised by the proposal, We recommended that the legislature defer taking action at this time and instead direct the administration to reintroduce the proposal as part of the governor's budget next January. We recommended this because it would allow the legislature more time and capacity for sufficient considerations of the proposal's benefits, implications, and tradeoffs, as well as engagement with stakeholders. And our recommendation is without prejudice to the merits of the proposal. Since that time, we've been learning more about the proposal, engaging with our colleagues and stakeholders. And we wanted to note that if the proposal aligns with the legislature's policy goals, the legislature could modify the language as part of the 26-27 budget to codify legislative intent of the policy direction. And as the director noted in his statement, that conversation is already underway as we understand it on those potential modifications. The legislature could also add reporting requirements that provide for legislative oversight as the administration will be refining implementation details over the coming years And we just wanted to note that if the legislature wishes to proceed in this direction, that the LAO is available to help with some of those edits to the trailer bill. And no other comments on any of their trailer bill proposals.

Yes, that's something that a right that has been in place for since developmental centers existed. So what that is meant to do is provide kind of a safety net for those who have transitioned to community, but for whatever reason, that community placement turns out not to be a good fit, and the individual needs to be able to return to the secure setting until an alternative resource.

No. No. Provisional placement would not give them another two years.

I can check on that and make sure that that's covered.

It's cost-neutral?

So the difference is that we have the work that we've been doing on SB 138, standardizing the intake process, has been looking at the full intake process. So from the day that a referral or an application is received or a phone call is made saying I would like to get assessed to throughout the process of the timelines that are required to assess whether an individual either is not eligible or needs further assessment, etc. So we have been looking at every step in the intake process. So the intake process is not just determining eligibility. The intake process involves everything, like I said, from that first call to the end of the process where either the person is informed they are not eligible or they are eligible. So that has been the focus on the SB 138 standardizing intake. We have met with many, many stakeholder groups, including individuals and families who have gone through the intake process to advocacy organizations, providers, everyone. We have held many, many, and we have also met many times with a work group that we put together of regional center intake staff. Throughout that process, what we have heard very emphatically is that there is a lot of concern. And I mean, I can't stress enough the level of concern that people have about the actual diagnosis of eligibility. And so where I think we were kind of hoping we would address the process, the overall process, but leave that diagnostic piece alone throughout this process of doing that, we have just heard too many complaints and concerns. And as I said, it's also reflected in the data that there is this variability and determination of eligibility. And so that's where we have, through the work that we have done, come to the conclusion that we really are not going to be having the impact that we were meant to have through SB 138. if we do not address this very big, all-important piece of that intake process, which is how regional centers determine whether or not somebody actually meets the eligibility criteria. So that's where this is coming from. So SB138 asked that we standardize the intake process.

No, no, no. So I think we didn't recognize, so every step of the intake process needs to be standardized to ultimately. But we didn't recognize until we started all of the stakeholder engagement that we've had just how problematic the eligibility assessment itself is. So I think we thought that we could make sure for example that the first day of the intake process is the first day is determined the same way across all 21 centers Because I believe it or not, that sounds like it should be a simple thing, right? What's the first day of that 120, 45 day timeline for deciding whether or not someone's eligible? You would think that deciding which day is day one would be simple. It's not. It's done differently. That's part of the intake, standardized intake. Standardizing intake.

No. So I'm sorry that this is confusing. So what we have, this funding that we're currently requesting is to look to research and evaluate how regional centers are diagnosing eligibility. We have not done that. We have looked at the steps of the intake process overall. We have not looked at the many various ways that regional centers actually diagnose eligibility. So diagnosing eligibility can, you know, involve all kinds of different tests, different batteries of tests. Some regional centers doing interviews with the person who's applied for services. services, that's what we're asking for funding for is to take a look at, evaluate how are regional centers doing this diagnosis piece?

No, no, no, we have, I was agreeing.

The way that I think about it is this. So SB 138 had a number of requirements. We standardized our data collection. We standardized the vendorization process, the intake process. This is an example in this particular proposal of where in our effort to standardize, we've identified that it's vastly more complex and important to get it right than it was. So we are back asking for an investment in standardized intake, the same thing, but this is one piece of that entire process that we're needing to do a deep dive on. We're not the only state in the country that does this. We're not the only state in the country that does needs assessments. We think a lot of work needs to be done to make sure that people have equitable access to service and assessment of need for service. So this is an additional investment in the standardization of intake based on the learnings that we've had from the two years that we've spent working on this so far. So Director we won be able to standardize intake unless we give this additional resources That our proposal yes And there a couple of different positions for this proposal and some of them are limited and others are ongoing. If this is to help get it up and running and then it should be a smooth oil machine,

Yeah, absolutely. So you can imagine once we implement this, we're not done when we issue a directive and say thou shalt do it this way. There's ongoing monitoring. There's fidelity monitoring that needs to happen and those kinds of things. I can, as I sit here today, guarantee you that between now and then we will have additional learnings, and that may be adjusted. What we're really asking for is approval of the first year. The legislature appropriates the budget generally one year at a time. So we're asking for the first year, but telling you it's a multi-year investment. That's really what's being conveyed in the budget change proposal. I'm quite sure that that may fluctuate, and there are positions there, because we don't do it alone, for regional centers to collaborate with us in this work as well.

Generally national experts, literature review, consulting service.

We don't develop the specific work plan until we know that the resource is going to be there. I don't engage in community.

Yeah, so let me respond to that. So one, it's a small part of it, but two, the big part and the important part to get right is the eventual IT changes needed in the IT systems used by the case managers. And given our schedule for the procurement, development, and implementation of the lowest project, this means the San Diego information system, SANDIS, that is the central repository today, will need to be modified to help us with some of the implementation of whatever we end up implementing. They need to be along with us for the ride to inform where their system is today as well as where we want to go. they need to understand that for them eventually to program it. So there's a chunk of money in here for IT contracting too. But the IT contract $3 million of $11.4 is roughly 25%. It's not a big chunk of the overall work. I agree with you. I want this knowledge institutionalized at the department and regional centers, not some contractor that then walks away and takes what they've learned at our expense with them. Director, you are the expert in this area,

You are, I am grateful for the budget situation that my department finds itself in. I realize that if the committee wants a report back before we execute contracts we happy to entertain that conversation Okay And then can you you shared a little bit about regional centers being able to find more federal money to pay for things

I would categorize it as a combination of things. One, we have improved our ability to use existing Social Security numbers and obtain them from families. That allows us to match our federal claiming files so that we can claim on behalf of people we always should have been. The January 10 budget included a cleanup item that allowed us for the adult expansion population to claim a higher FFP rate than we historically have that we always should have been. We've identified improvements in our claiming for targeted case management, a small amount in EPSDP funding. We have, as part of that half a billion that I mentioned, we're projecting enhanced claiming in our 1915 I-State plan by almost $300 million next year. So we're looking at a number of things. We also have data matching pilots going to improve our match overall with the DHCS Medi-Cal claiming file so that we're sure that the people that we serve have Medi-Cal and we can claim on their behalf. We think there are more people than we could have been claiming for. We're also anticipating $89 million in self-determination program FFP waiver because we think about half the people, I'm sorry, of the people on the waiver, we think we can double the number of people in SDP on the SDP waiver and get additional federal funding for them. And we issued a directive to regional centers a couple of months ago to do that. So there's a variety of things. There's no one particular there. But what you're hearing is a lot of data improvements and data matching. We're also working with regional centers to make sure that what we are claiming is, I'm sorry, that we are claiming everything that we're able to claim. For example, the costs of intake and vendorization may not be completely captured, and we're continuing to explore that, but we didn't factor that one into the budget proposal yet. Okay, thank you.

Good evening, Madam Chair and staff. Jennifer Troia on behalf of the California Department of Social Services. Before we dive into the agenda, I just want to briefly share that the May revision for the department overall includes more than $67 billion in local assistance funding for fiscal year 2627, including federal, state, county, and reimbursement sources. The first item on your agenda highlights updated caseload estimates included in the May. revision for many of our programs. Of particular note, the CalFresh caseload for 2627 is projected to be approximately 3 million households. This reflects a decrease of 6.3% from the prior year. It's based on an additional six months of data, July through December 2025. It reflects more of a decrease than we had previously estimated at the time of the January budget. The California food assistance program caseload for 2627 is projected to be approximately 46,000 individuals. This reflects a decrease of 16.2% from the prior year. This is a smaller decrease than we previously projected in the governor's January budget. And the in-home supportive services program caseload for 2627 is projected to be approximately 875,000 individuals. This reflects an increase of 8.5% from the prior year, which is .02% lower than we estimated in the January budget. Later agenda items by topic ask us to address these caseload changes in greater detail. In the meantime, in general terms, I think it might be helpful to note that the caseload forecasts are developed using a combination of time series and regression models. We utilize the most recent five years of actual data. Generally, we select a model based on the lowest sampling error and strongest statistical significance. So we have actual data through December 2025 that is embedded into these estimates and incorporates an additional six months of actuals compared to the governor's budget, which is what really leads to the updates. Each program's caseload has different data sources, which are detailed on our website in a detailed document in a caseload packet. This item also asks us to summarize and answer some questions related to a proposal connected to our loan authority. And for that, I will turn it over to Deputy Director Younger.

Random question. Well, not random. We talked about this last time regarding the IHSS, one of the proposed cuts was the realignment was the once they lose Medi-Cal, they'll lose IHSS. And I brought up a random question about the loan, whatever.

Okay. Because we don't know if they're actually going to cure?

Right. I was just wondering if we don't serve them in that and we use the... I just wonder if there was a possibility. Yeah, I know that we can. Yeah. I'm just curious. Okay, thank you for that.

Again, Jen Troia on behalf of the Department of Social Services. Issue 8 relates to CalFresh and nutrition programs for the department. The May revision proposes $16 billion in total funding, $1.6 billion general fund in 26-27 for CalFresh and nutrition programs. This reflects a decrease of $1.3 billion, or $24.9 million general fund, from the Governor's budget. The decrease reflects the caseload adjustments we were just discussing for CalFresh and for the Child and Adult Care Food Program, or CACFP, using that more recent data and lower carry-in funding for nutrition education. The decrease is partially offset by an augmentation for administration of the APOD time limit and lower than previously projected savings related to the APOD time limit and CalFresh eligibility changes for newly excluded non-citizens. The CalFresh caseload, again, is projected to be approximately 3 million households, a decrease of 6.3 percent from the prior year. The CFAP caseload is projected to be approximately 46,000 individuals, which is a decrease of 16.2 percent from the prior year. In the May revision, CalFresh eligibility administration for activities with a county allocation is proposed to decrease by 145.5 million total funds, though there is an increase of over $250 million general fund due to the upcoming change in CalFresh cost-sharing ratios that was enacted under H.R. 1. That equates to a 5.4% reduction in the total admin funding. The decrease is consistent with the caseload decline that we've been describing. Adjusting administrative funding for caseload changes is consistent with our established methodology and assumes the workload is dependent on the number of individuals who are enrolled or going through the enrollment processes. The May revision also includes several proposals related to CalFresh and nutrition programs. We'll highlight three today and happy to answer questions about any others as well. Those three are a proposal to provide the one-time augmentation for county administration funding for the APOD workload, a proposal to provide a one-time augmentation for the CalFood program to support food banks, and a proposal for staffing and funding related to the department's federal response efforts. Before we talk more about those three major proposals, I will answer some of your questions related to the CalFresh and CFAP caseloads in greater detail. the changes to the cal fresh administrative funding included in the may revision are driven by the decline in the caseload between march and december 2025 for example the actual cal fresh caseload declined by 276 000 individuals or five percent from a base enrollment of 5 million that the first time since the pandemic that the CalFresh caseload has not been growing While some provisions under H.R. 1 had been implemented, the major changes related to non-citizen eligibility and to ABOD time limit requirements were not yet implemented in California at that time. Because the economic conditions have not improved, we are assuming that these recent decreases are likely driven by other factors which might include the chilling effect of federal actions and the federal climate. The department's working to explore the potential drivers of this decline further. As it relates to the ABOD administration, the May revision does not reflect changes from the governor's January budget to the methodology for the ABOD time limit administration. So for example, assumptions about the percentage of people who may be determined exempt or subject to the time limit after screening remained consistent. That said, the total number of anticipated ABODs has declined along with the declined caseload. As it relates to newly excluded non-citizens, the May revision reflects a reduction of the impacted individuals, both due to those overall caseload decreases, but also enhanced data inputs and a refined eligibility interpretation. In other words, we have identified that there are some individuals who will retain eligibility as we dug deeper into what their immigration status actually was. Turning back to those major proposals.

there are some individuals who are in the CFAP caseload who should have been in the CalFresh caseload. We now are estimating that a smaller number of those individuals are going to leave CFAP or CalFresh because we've identified their immigration status.

We're saying fewer people will fall off. Yes, because more people now are eligible to be on CalFresh.

Yes, correct. We still have to correct for them moving from CFAP to CalFresh in some instances, which we can do. But they are eligible under their immigration status.

So in addition to caseload-based funding, the May revision does include a proposed one-time augmentation of $62 million total funds. $30 million of that is general fund. In 26-27, for the county administrative activities that are intended to be responsive to the county concerns about workload and readiness for implementing the ABOD time limits as required under H.R. 1. The funding is meant to support county administration during the first year while we are implementing those time limits at scale. During the first year of implementation, we'll also have the opportunity to collect data to inform any possible longer-term methodology changes that can be considered as part of the reassessment of CalFresh administration, which we do triennially and is scheduled to begin in the fall of 2026 already. The administration's augmentation of $30 million general fund for ABOD administrative activities is proposed to be provided while this data is collected, and then that will inform that reassessment of the CalFresh administration methodology moving forward. The second major proposal is the CalFood augmentation. The CalFood program, as you probably recall, supports food banks for the purchase, storage, and transportation of food that's grown or produced in California. The May revision proposes 30 million total funds general fund one time in 26 to augment the baseline funding of million for a total of million in the budget year The food banks use this funding to purchase food with their share of the CalFood allocation as a part of their regular food distributions to supplement the mix of food that would otherwise be available by including fresh California-grown commodities. And with that, I will turn it over to Deputy Director Fernandez Garcia to talk about our proposal related to state staffing. Good evening, Alexis Fernandez Garcia with the Department

Thank you. Director, are you going back to the fourth one? I know we skipped that one. Sorry, the third one?

I think we have it under the...

Will you be going over all the rest or just wanted to go over just the main ones?

That's totally fine.

What's your name?

Don't know your face yet. Thank you

It is an interesting question. It was an unusual time in terms of the government shutdown and something that we can look at in terms of whether the trends seem to be temporary. We do use five years' worth of data, and then that includes those most recent six months. I will say that in terms of those other things that we are exploring, we are hoping that we can look further into data to try to identify, for example, is it that applications are going down? Is it that applications are being denied more frequently? Is it that people are leaving the existing caseload? So we know overall that there are significantly fewer people coming into the caseload, but the caseload is actually declining. But trying to figure out what metrics we have and what the counties can share from their experience as to, in a more detailed look, where are those people falling off?

Is it kids? We don't have that yet. I don't think we have that yet, but that's exactly when I said we're exploring further what might be the explanations for the decline. Those are the kinds of questions that we are also asking.

So that is the number of people that we anticipate would be at risk of losing benefits. And so in our methodology, we've already removed people that we know are exempt today or that we believe we can exempt based on some of the data we've seen coming up from other similar states in terms of policy. And then that also removes people who are already engaging in a work activity. So what remains in that 500,000 range is the people who will be at risk unless we're able to establish another

For some of these people we don't have complete information that we might receive either through the interview process or through some of our administrative match efforts right where we might find out for example they have a temporary disability or or they have been struggling with domestic violence or substance abuse And that is something that would not necessarily be known to us until that interview and screening can happen or we make that additional administrative data match.

or does the CalFresh amount still stay for the minor? So the ABOD time limit rules generally apply to individual adults. So there might be multiple adults in a particular household, and the rules are applied to each of those adult members. It gets quite complicated because there are certain exemptions that can be established per adult. For example, if you're responsible for the care of a child, we can establish an exemption for one of the adults in the household. If the adult is not able to be determined exempt or is not meeting the work requirement and faces a discontinuance, it is for the adult member of the household. So the children in that household would continue to receive benefits, but of course we know that households share benefits. It's not that clear, and so what you would see is a decline in the household's total benefit amount attributed to those adults who are not either exempt or complying with the requirements.

Not a dollar amount. We have shared the number of people that are in that circumstance. How many?

Now, again, that's an estimate, and some portion of those individuals may be determined exempt through administrative matches or additional screening.

Yes, it could be. That's a ceiling.

That's right. That is correct. So the only children in that household would have to all be within 14 and 17.

It depends on how you design the benefit. It also depends on the cost of automating the benefit, which is related to the complexity of the policy. So do you do a benefit that is a single amount for every individual, regardless of what they would have received given their household composition? or do you actually determine their benefits and give them what they truly would have gotten? How complicated is that to automate and to administer?

I know.

And because we don't yet have a proposal in front of us, we have to understand kind of the eligibility criteria, what folks are thinking in terms of the benefit amount. That pilot used some kind of clear eligibility criteria around age, and it linked it to another factor, which is whether they're eligible for the simplified application project, and then it provided a standard benefit amount. So that just gives you a sense of some of the more simplified eligibility criteria you could use, or if you added factors to that, it could get more complex.

So I don't have them on hand, but unfortunately under H.R. 1, there was a disproportionate impact to people in the upper age ranges because those households are less likely to have children in the home, less likely to be engaged in work just by the nature of their situations. And so we saw a disproportionate impact on the higher end of the age range.

The May revision updates all those estimates. So the total universe of adults ages 18 to 64 who received CalFresh under the May revision is 2.6 million. We estimate that about two-thirds of them, so 1.6 million, are already exempt based on existing data. We are also working with DHCS, DDS, and other data sources to potentially add a larger number who will be exempt based on data that we have. But prior to including that DHCS-DDS data match, that leaves roughly 806,000 adults whose exemption status we don't yet know. So that's the group of people we need to screen to identify whether they have a different exemption or whether they might be meeting the requirements. and if neither of those, if they were not exempt by any reason for the data and from the screening we don't find another exemption or they're not meeting the requirements, that's when they would potentially fall off of benefits.

However, the H.R.1 policy has not kicked in. Well, we haven't implemented yet.

We do continue to provide the CalFresh outreach through our contractors that we have always provided. We have, over recent years, greatly increased the number of eligible individuals who are actually receiving CalFresh. So prior to this, we were seeing pretty consistent caseload increases over a number of years, partly due to that outreach, which we will also continue to do. I think it's important to recognize, though, that the chilling effect may, at least our assumption of it, is that it may be related to H.R. 1, but it may also be related to immigration. The number of families who are in mixed status households who have a level of fear about interacting with the government or public charge, other things that is obviously quite extraordinary right now. And so it is possible that it's H.R. 1 related to immigration. It's also possible it's immigration and family household status related. There could be a variety of factors.

they can sell? Yeah. I think there are a couple of ways you could do this. You could look at providing a supplemental benefit basically on top of existing federally funded benefits like we do for the nutrition benefit pilot. There are questions, of course, about costs, timeline, and feasibility of that. You could consider alternatives such as gift cards or one-time kind of approaches that may not be as complex in the long run, I think there are, you know, different ways that you can think about achieving some of that or all of that goal.

Depends, again, how you automate. Got it. Okay. Okay. I think it's also worth pointing out that there is a conversation that between the legislature and the administration, we would need to have about prioritization of overall capacity both at the department and in the automation systems. So the number of requests that we have to, for example, automate those data matches to identify exemptions that are very complicated for the system and are already kind of pushing up against deadlines that may not be feasible, depending on the complexity of any other policies that we have.

That is when we begin implementing the timeline for countable months afterwards. So just to say, I think there is a conversation that will need to happen based on whatever is the overall package of the final budget as to how all of those things fit together in terms of overall capacity of the counties, the state, and the system.

Noelle Fakaji, Department of Finance. You're correct. We have a current year one-time funding of $80 million. And we are projected to. 30 million on top of the eight. Sorry, proposing for budget year 30 million. But of the current year funding, we are on track to fully expend that amount. I think the rationale for the 30 million is looking at the overall budget condition, and this is our proposal for reaching that final balanced baseline.

I think it reflects our shared priority area to sort of support the program, but balancing that against the overall budget question, and this is the amount that the administration is putting forward. If I can just clarify on the numbers. So the baseline funding for the program is $8 million. During the pandemic, there were some years where it went up to $120 million or $60 million, but in the current year that the million that the Department of Finance was referencing I the total in the current year in 25 is million And then in 26 we proposing million

So for the incoming budget year, it's a proposal of $38 million.

What I can tell you is what we are hearing in reaction from the counties, which is that they believe that this is a time, given the ABOD workload, that they need to be staffing up further, and that this year-over-year reduction would actually mean in many counties thinking about laying off staff instead. That is the concern we're hearing from them.

Yeah, I mean, I think they lose less than they would have lost under the caseload methodology by itself. So if they had not augmented it, they would have lost even more funding because of the degree of the caseload reduction. But we are augmenting for workload, and that removes some of that reduction.

That would be our recommendation, yes.

Madam Chair, I can just add to the conversation. I think we just note that this is an area, as in all of our other caseload-driven figures, where we update both in the January and the May revision. I think another part of this is that as part of the May revision, we are augmenting the current year amount by nearly $36 million. So it's sort of changing in sort of both directions as we get more information and caseload is higher than anticipated, then the associated county admin dollars would also increase in that case in the future.

There's provisional language in the budget that allows us to adjust for caseload-driven programs. They're entitlement-based, and therefore if the caseload comes in higher than expected, we can. They don't have to wait until the next budget.

I will also say, though, to your question earlier about the county impacts, that what we hear from the counties is that that is difficult to plan for.

So the disruption you're hearing is that it's not essentially, well, kind of maybe, on services because they're going to have to lay off people.

It's not strictly loan authority. It's general fund, but it is the case that it is for cash flow purposes, and when we receive the federal funds, it would reimburse.

So I think we're just trying to sort of work through this process where we're engaging with the federal government to sort of receive the funding. Sort of given sort of the timing and that there is no specific sort of timeline for hearing back. We want to make sure that we can sort of make counties and sort of the state whole through the administrative process.

So sorry.

If I could maybe add as well on a technical basis that proposals are different in the sense that when it's truly the loan authority that you're used to seeing or like where we're talking about a 20% loan authority, there's a set time frame in which that funding needs to be reimbursed because there's an expectation of how quickly we're going to eventually receive those federal funds. Whereas in this instance, there's a lot of uncertainty because we've never been over the target before, and we don't know how or when the federal government is going to respond. So this is not lumped into our overall loan authority and that same set of timelines, but as a separate augmentation, recognizing that there is a lot of uncertainty in the federal government.

For our loan authority where we were proposing the 20% increase, it is a different provision of the budget, and it does require that repayment on a quicker timeline.

Yes, we have heard some feedback. I think the concern from the counties is related to the non-federal share of the programs administration is split 70-30 by the state and the county.

And I think they are essentially asking to be held harmless for their portion of that share.

So this proposal does correlate to the January governor's budget proposal. But let me take a step back even a little bit further. In the previous budget between the normal action and the August action that was taken, we received a number of positions limited term. And so between the January proposal and the current May revision proposal, we're making 16 out of the 18 previously limited term positions permanent. And then we're making or requesting to make, excuse me, 11 new positions permanent. And part of what is happening is that it's a very volatile environment. We are learning of new requirements of us new expectations from the Fed drill administration new requirements on an ongoing basis And so we adjusted to bring that staffing request to all of the demands that are being made of us What happened to those two that aren made permanent So those were two attorney fours and we removed those

Right. We tried to kind of get down to what was essential.

I've been hearing that there's not all the kids that should be on the program are on the program.

Yeah, so a little bit of background. We are just entering the third summer of SunBucks operations. Cards started to be mailed this week. And so what has changed from the first iteration to where we are now is that the federal government has eliminated some flexibilities that were available to states. So early on, we were able to determine all children eligible automatically based on existing data available to the state. Since then, they've introduced an application requirement, and so the majority of children are still approved automatically, about 3.6 million estimated for this summer. And so that's based on existing data of CalFresh receipt, Medi-Cal enrollment, or a school meal application that was submitted prior. But there are a number of children who are going to have to apply to receive benefits. And so last year we did not see as many applications come in as had originally been projected by both the Department of Social Services and our education partners. We do think, given we're in this third year, it is now more common knowledge that an application is needed. We're doing more outreach. The schools are more engaged. that we will see increases in those numbers of applications received, but it will require kind of getting the word out in community now that the rules have changed.

So the application process is managed by local education agencies. I will just say that right now we have a paper form, and that can be accepted at all LEAs across the state.

Kara Younger.

Kara Younger with the Department of Social Services. I will be speaking to the May revision trailer bill, starting first with the reassessment timelines. There are three CDSS programs with statutory requirements to reassess administrative funding every three years. This is CalWORKs, CalFresh, and IHSS. Under current law, both the CalWORKs and CalFresh reassessments would be due in the budget year. In light of the significant resources required for the administration and the counties to engage in these reassessment processes, this proposal will shift the timing of the IHSS and CalWORKs reassessments so that only one program is reassessed each year. Under the proposed timeline, the next reassessment for each program would be CalFresh in budget year, CalWORKs in year 28-29, and IHSS in fiscal year 29-30. The outcomes of the reassessment will be reported to the legislature during the May 2027 revision, and then those changes, if adopted, could be included in the future budgets. Moving on to EBT theft administrative authority. The department currently has statutory authority to use county letters for guidance related to electronic food benefit theft until formal regulations are adopted. The current authority will expire on June 2026, and it only applies to electronic food theft. The department risks issuing and enforcing rules on electronic benefit thefts without following the Administrative Procedures Act. This trailer bill amends WIC to extend the expiration date to June 30, 2030, and it also expands the authority to apply to electronic cash benefit theft.

Issue 10, CalWORKs May revision budget. CalWORKs provides temporary cash assistance to eligible low-income families with children. It also provides education, employment and training programs, and supportive services aimed at giving families opportunities to build resilience and achieve critical economic mobility. The May revision includes $6.2 billion in FY25-26, which reflects a decrease of $124 million from the governor's budget. The decrease reflects slightly lower CalWORKs assistance expenditures due to faster caseload decline than previously projected. The May revision also proposes $6.3 billion in fiscal year 26-27, which reflects a net decrease of $184 million from governor's budget. This net decrease, again, reflects faster caseload decline than projected and slower growth in employment services caseload than previously projected.

The May revision includes four CalWORKs budget proposals.

So the May revision proposes $59.5 million in 2627 for an ongoing maximum aid payment increase of 1.8%. So effective October 1, 2026, the grants would increase. That's funded with revenues under realignment in the child poverty and family supplemental support subaccount. And that increase brings the non-exempt maximum aid payment level up to 53% of the 2026 federal poverty level. To your point about Issue 11, the trailer bill language under Issue 11 is what is necessary to implement this proposal to increase grants.

The May revision also proposes to shift $500,000 from the current year, 25-26 to 26-27, for training that is related to a new tool that was part of our Transforming CalWORKS package from the prior year. It also includes a proposal related to CalWORKs special needs notice of actions, or NOAAs. We don't currently have automation to standardize those NOAAs for special needs payments, and this would allow for that. And then finally, the May revision proposes to shift $500,000 from the current year to the budget year for training related to another of the new tools, which is the streamlined appraisal tool, also under the Transforming CalWORKs proposal.

of Social Services. As we have discussed in recent hearings, IHSS is the cornerstone of California's long-term supports and services system. It provides domestic personal care services to children and adults with disabilities and older adults to keep them safely in their homes and communities and avoid institutionalization. The May revise includes $33.7 billion, $12.8 billion of which is general fund in 26-27 for IHSS. reflects an increase of $303.9 million, $226.3 million general fund from the Governor's budget. The increase reflects growth in the projected cost per hour, partially offset by a slower than previously projected caseload growth, a number of hours per case for IHSS overall, and conforming the IHSS program with the reinstatement of the medical asset limit. The caseload for 2026-27 is projected to be approximately 875,000 recipients served by just over 800,000 providers. There are two proposals that you asked us to address related to conformity with the Medi-Cal proposals in the budget. The first is the IHSS impact of the implementation of H.R.1 for certain non-citizens. So H.R.1 amended on the Medi-Cal side the federal definition of a qualified non-citizen and removed several immigration statuses. Effective October 1, 2026, certain categories of lawfully present noncitizens are no longer eligible for federally funded full-scope Medi-Cal. DHCS is making policy assumptions in the May revision that we are conforming to that assume these individuals will remain eligible for IHSS, for us that's through the IHSS residual program, until June 30, 2027, as DHCS's proposal continues full-scope Medi-Cal coverage, which also therefore gives them IHSS eligibility until June 30, 2027. As a result costs that were previously supported with federal funding will shift to the state general fund during that time period when the individuals are receiving state funded Medi The second conforming to Medi-Cal proposal relates to the IHSS impacts of the Medi-Cal asset test. So the May revise proposes a reduction of $62.6 million general fund in the budget year at CDSS to conform eligibility for IHSS, which as we have discussed is a service of Medi-Cal, with the reinstatement of the Medi-Cal asset limit for seniors and adults with disabilities to $2,000 for an individual or $3,000 for a couple, effective no sooner than January 1, 2027. So the current asset limit under state Medi-Cal policy, as you know, is $130,000 for an individual and $195,000 for a couple. so our estimate is that seven thousand seven hundred and fifty five IHSS recipients will lose Medi-Cal in 26 27 as a result of the reinstitution of the two thousand three thousand dollar asset limit and then in 27 28 an additional eleven thousand one hundred and sixty six IHSS recipients will lose Medi-Cal and lose their IHSS in 27 28 with that I will turn it over to the chief deputy Director Ramsey to summarize the changes in estimates for the IHSS proposals from the governor's January budget which are carried into the May revision and updated and also to address the final major proposal under this item which is related to the Adult Protective Services Program.

LAO?

Further, we do have some additional concerns about the level of additional administrative complexity that may result from reinstating a more restrictive medical asset limit of $2,000 for individuals and $3,000 for couples. Moving on to number three on the IHSS impacts from delay to restricted scope Medi-Cal for qualified noncitizens. On this one we would just note that as you all continue to consider this proposal, you may want to ask the administration how it anticipates this increase in recipients entering the IHS residual program. We'll interact with the other governor's proposal to align IHS termination with the Medi-Cal termination. Termination. Moving on to number four. So this one kind of just is all about all the updated estimates from the IHS cuts proposed at Governor's Budget. I'll just start off with addressing both the proposal to eliminate the backup provider program and the proposal to align IHS termination with Medi termination Both of these proposals as the Administrator noted has updated savings estimates below what was estimated in January However again as the administration noted we see both of these updates as kind of technical in nature, reflecting and updating the number of IHS recipients anticipated to be impacted by these two proposals and not an update to how these proposals are anticipated to work in practice. And then lastly, moving on to the proposal to shift the costs related to the growth and assessed hours per case to counties. Again, as the administration noted, the estimated savings in the out years of this proposal have significantly reduced compared to January. Now, it's our understanding that this reduction in savings in the out years reflects an attempt by the administration to adjust average hours per case, the average hours per case baseline in future years to better incorporate the natural growth in average hours per case so that the state and the counties will instead share the growth in average hours per case going forward. So we're continuing to work with the administration on kind of better understanding that dynamic, but along with some of the concerns we had raised about the proposal previously in the past, we do have some additional questions around the updated methodology, namely around how the hours per case baseline was determined and how the level of natural growth in hours per case is estimated. Thank you.

I'll clarify. So 60,000 is the total number of 60 to 64-year-olds. We anticipate 20,000 of those are likely dependent adults who would continue to be eligible, and the other 40,000 are likely only meeting the eligibility criteria because they're older adults and therefore would no longer be eligible. And to clarify, the other number I provided was related to Home Safe was a smaller number. But currently people who are in the program right now will continue to be eligible. No one's getting kicked out. That's correct. It's only people coming in. That's how the TBL is drafted. For everything. That was referring to HomeSafe. The people who are currently being served in HomeSafe who are of that age would not lose their HomeSafe. In terms of the criteria here for the dependent adults versus older adults, there are different ways that you can qualify for APS services So one is based on your age and it can be age alone but another is based on your dependent status So for the 60 to 64 year olds what the chief deputy was referencing is that some of them are also dependent adults. So there's another criteria under which they qualify for APS. So the change in the age will not make them lose access to APS because they qualify under a different criteria. The 40,000 that she was referencing who are of that age and not dependent adults would no longer qualify for APS. I want to make sure because we were under the impression

They're what we're looking like future forward if the eligibility criteria changes. We'll be eligible on the expansion, but not anymore. Right, exactly.

Oh, it's a little higher? Yeah. It's a little higher.

Yeah. Or at this point.

Yeah.

James Shajire, I'm the program administrator of Adult Protective Services. The caseload projection for this year is well over 300,000. So it's, I think, in the range. We have a number, but I think it's in the 320,000, maybe a little bit higher. And 60,000 of those are currently 60 to 64. Correct.

Thomas Locke, Department of Finance. So as mentioned by my colleagues at the Department of Finance, the media revision falls through on the governor January commitment to balance the budget and the budget year and then the first out year And this proposal essentially is part of a set of proposals in order to achieve that goal We understand the legislature is concerned.

I talked to the Department of Finance. So I think the number that we were really looking at was the cost of the program, and we are learning of the additional impacts.

Yeah, I mean, I don't think we had all the details.

Once again, Lourdes Morales with the Department of Finance. Sort of understanding, as it was described originally, that the sort of intention is to reverse the expansion from 2021. So understanding that there was sort of an age component, which was a major component of that proposal, but there were other components. And so the scoring of this proposal does reflect the $70 million general fund, which we understand is age but also other components. So that was always sort of in alignment with our intent.

We understand it was sort of broader than that, sort of really aligning with the expansion from 2021. So the change proposed here is removing the wraparound services and APS services for 60-64 and removing the wraparound services for everyone above 64. The $70 million adopted as part of that original expansion included a number of components, and so the intention from the administration is to reverse that sort of expansion plan.

I believe we have a figure that we can sort of speak to on that. Right. But I would note the sort of prior comment around Home Safe and that the trailer bill is drafted to allow individuals that are currently participating in Home Safe to remain.

We have understood from counties that there may be, I don't know that we've heard specific that there would be layoffs, but that it will put pressure on their APS budget because right now the $70 million is rolled into their allocations and it's not a separate line item so that it will have pressure on the budget. That's what we're hearing.

Juwan Trotter, LAO. So it's not that we necessarily disagree with the estimate. It's more that when we were evaluating the proposal to repeal the asset test, We were informed by the departments that it was difficult to understand how many people were entering IHSS directly because the acid test was first increased and then later completely removed. And so we kind of anticipate that that same difficulty still exists when we trying to estimate people will lose IHSS because the asset test is being re or being reinstated And so I think our comments more relate to when you look at these estimates to kind of take that context into consideration. And there may be some shifting in our understanding of how many people are actually falling out of the program because of this proposal that may or may not be directly aligned with the estimates we have today. Okay.

So the general proposal to align IHSS terminations with the Medi-Cal terminations, with this proposal to delay the restricted scope Medi-Cal for qualified noncitizens, they will be entering the IHS residual program. And so I guess one question we would have is, would they be subject to kind of this, if they are redetermined, would they also be subject to automated termination of IHSS? if, say, they are in noncompliance with Medi-Cal or just because they're in the residual program for such a short period of time, are they kind of exempt from that? I think we just have questions kind of surrounding that.

Do we have any clarity on that since it's a six-month?

So these people are just going to be... the plan is to put in the residual for... It's putting them in the residual for this next year, and then they would go into restricted scope and no longer be IHSS eligible.

Yeah, right. Okay. Okay, and then going on to the updated numbers on IHSS. So I see that right now the department is proposing a 0.7% increase in hours growth, and I also see that in the revision for hours per case, that's the same amount of percent that we're seeing in year-to-year change. Is it a coincidence, or how did we get to 0.7?

The 0.7 is based on year-over-year growth between 24-25 and 25-26. But it's also going to be the proposed growth for the new methodology moving forward?

baseline, if that makes sense. I know the baseline hasn't been determined. That's correct. I'm We're talking about the growth that is not being incorporated, which is why we're seeing a less savings. Yeah, we're incorporating, it seems like, 0.7% growth in case hours.

I'm sorry. Yes, I understand your question. And it matches the same as the current past year. So I'm wondering if that's how we got to 0.7, or how did we get to 0.7 being the growth that the state will cover?

Okay. But am I asking in a way that is understandable?

Did you want to add anything to that?

Do we know how we got to that?

I'd like to hear how we got to that

And we still don't know the base. Okay. That's all the questions I have on these terrible proposals.

And I'm sorry, Chair, I do see in my notes that the 0.7 is correct. I just couldn't identify.

It is based on the annual growth that we've seen over.

I'll confirm the average, but it was based on actuals that we had seen, so I'll confirm that it's the average.

that we have not talked about. It's the collective bargaining. Claire Ramsey from the Department of Social Services. is the IHSS collective bargaining proposal would add enforcement provisions related to collective bargaining agreements for IHSS provider wages and benefits. Specifically, counties that have not reached an agreement by July 1, 2026 would be required to reach an agreement with the employee organization within 90 days. Failure to reach an agreement within that time frame would result in withholding a proportion of the 1991 realignment funding regardless of whether the county is operating under an expired collective bargaining agreement The current penalty is 10 The penalty language the 10 penalty language has been in place since 23 However, the language didn't account for counties that have never had a collective bargaining agreement. And so for counties that did not have one, they were able to bypass these intended penalties. This proposal has no cost to the state. Anything to add here?

Okay, both items are open. Move on to the next issue, issue number 14. The legislative soccer game starts in 40 minutes. yours truly is supposed to play. Issue number 14.

Good evening, Madam Chair. Angie Schwartz, Deputy Director of the Children and Family Services Division. The first proposal pertains to the Title IV-E stipend program and is requesting $18.4 million in one-time general fund in fiscal year 26-27 to ensure that there will be continuity for currently enrolled Bachelors of Social Work and Masters of Social Work students under the Title IV-E program, which provides professional education and monetary support to those students that are seeking those degrees in social work or intending to continue to pursue a career in the field of public child welfare. The students who complete the degrees are required to complete their service requirements of 24 months at a qualifying agency. The 4E stipend program is a significant support for building and sustaining the child welfare workforce. Guidance was released by the Administration for Children and Families in March of 2025, clarifying how we have to claim 4E funds for the stipend program and requiring us to make adjustments to our claiming methodology, which will also require universities to come up with an additional match. The $18.4 million will give us time to work with the universities to adjust those allocations while making sure that the students that are currently enrolled in the program can continue their studies. The funding will also provide a bridge for, I just said that. Let me go on to the next one. Sorry. It's late. The second proposal has to do with the Child Welfare Services California Automated Response and Engagement System, also known as CWS CARES, which is to replace the Child Welfare Services Case Management System, often referred to as CWS CMS, so that we come into compliance with having a comprehensive child welfare information system, keeping the needs of local child welfare practitioners at the forefront, and meeting the regulations and policies required under state and federal law. The state will Deliver the core CARES solution through two versions. Version 1 will provide the functionality required to decommission CWS CMS, support new policies and programs such as the Family First Prevention Services Act, the tiered rate structure, and lay the foundation for full CWIS compliance. We're scheduled to release version 1 in October 2026. version 2 will provide the additional capabilities to bring CWS CARES into full compliance with the CWIS requirements. That's anticipated in April 2028. The CARES budget for fiscal year 2627 is in alignment with the special project report published in May 2023. To address the agenda questions regarding cost components and resource delivery, In fiscal year 26-27, the CARES project will support a successful go-live of CWS CARES by providing implementation management, organizational change management, training development, and hybrid training based on organizing preferences to an estimated 30,000 end users. The project will also work directly with all the county child welfare and probation departments and tribes that have a 4-year agreement to ensure go-live readiness for version 1. This includes the allocations to support activities for readiness and includes our post-go-live over-the-shoulder support for organization and ongoing help desk support. Additional key deliverables include data conversion of millions of records from the legacy and from external systems. the implementation of the critical interfaces, such as with Cal-SARS, with the Child and Adolescent Needs Assessment, with the Structured Decision-Making Tool, with the data with the Department of Education, the Department of Developmental Services, with our licensing and family systems, with our county expense and claiming reporting system, as well as with our California Child Welfare Indicators Project, as well as safe measures. The budget will provide for the final development and remediation activities to address system change requests, ongoing system releases, post-go-live, and required system maintenance. And then the tiered rate structure development will be completed through the winter, and the readiness activities, including the training and the organization change management, will be provided to counties throughout the spring so that we are prepared to go live with the tiered rates in July of 2027. Happy to answer any questions.

On the first one, I don't know if anyone from Department of Finance does HKI as well. I don't think you do HKI. because there's a lot of workforce funding in HCI. I'm just wondering if you had conversations, Director with HCI to see for long covering of these programs this falls exactly under the workforce They do a lot of social work funding for workforce so I just wondering for long term if we can have those conversations I know this is a one thing I don believe we had those conversations yet

I almost got away with not having a BCP on this one. My question is going to be on the contract services. I think I'm just always skeptical of this continued contract funding. It's a black hole, I think. But is the contract, they seem to be always ongoing on them. They seem to be always ongoing, so I'm anticipating we're going to continue to see this.

Kelly Brooks on behalf of the urban counties of California, the rural county representatives of California, and the counties of Santa Clara, Riverside, Ventura, Santa Cruz, and Santa Barbara.

Yeah. We're concerned about the lack of investment in mitigating the impacts of HR1 on counties. The CalFresh eligibility funding is a net cut and will result in hundreds of less workers. We would align with CWDA's comments. We continue to oppose all of the IHSS cuts. Finally, on behalf of urban and rural counties, thank you for your comments on adult protective services, and we urge you to reject that cut.

Good afternoon, Chair Aniele Martin with the California Immigrant Policy Center. We thank the governor for maintaining the plan automation for the expansion of the California Food Assistance Program for older adults, which is set to begin October 2027. We continue to urge the legislature to invest in CFAP Plus to provide food benefits to immigrants who have lost access to CalFresh since April 1st. Making one investments to modernize CFAP today will allow us to address these exclusions in the long term Additionally we thank the governor for including a one increase of million for immigration legal services in the May revise We wanted to thank the Chair Menjivar and the Senate for including an increase of $50 million for immigration legal services in the Senate budget plan. As our immigrant communities continue to face unprecedented attacks from the Trump administration, we continue urging the legislature to increase funding for deportation defense services.

Chair, Kathy Mossberg, on behalf of C4A, again, back up here. I want to thank you for your time to speak to the interstate funding formula and look forward to working with you and your staff on that. I also want to say on behalf of C4A, we're opposed to the adult protective services cuts and those cuts to IHSS that we know will negatively impact those we serve. And then I want to associate myself with my colleague from CIPC on behalf of the administration for continuing automation on the 55-plus for CFAP and hope that they can do a little bit more and we can work with you and the administration to get some funding for those that have been impacted by HR1. Thank you.

Monica Madrid with the Coalition for Humane Immigrant Rights Chair. We thank the Senate for including a $50 million increase for immigration, legal services, and deportation defense in this year's Senate budget plan. California immigrant communities continue to face unprecedented attacks as the Trump administration expands of mass deportation policies and immigration enforcement operations nationwide. At a time when federal government is investing in billions into detention and deportation, California must continue leading by protecting due process and ensuring families have access to legal representation. We appreciate the governor's inclusion of a one-time $20 million increase in the May revise, but that need far exceeds the current funding levels. These services help keep families together and protect vulnerable community members during some of the most difficult times of their lives. And so we just respectfully urge the Senate to maintain the proposed $50 million increase. Thank you.

Yesenia Rubancho with End Child Poverty California. It's unthinkable to think about the cuts our children and families are facing as a result of the federal government, but California can't mirror those cuts, so we vehemently oppose those IHHS proposals. We're encouraged by the governor's proposal to close corporate tax loopholes and generate revenue for California. We urge any revenue and surplus funds be used to shield children and families from even more cuts, specifically expanding the CFAP+. To add on to the immigration piece, my brother literally called me yesterday while I was in line for public comment because one of his workers was taken by ICE. This happened literally yesterday in Los Angeles. Thankfully, I was able to connect him to rapid response thanks to Chirla's hotline. So just another very powerful story of why we need funding now for our immigrant legal services. Thank you.

Good evening. A.J. Johnson with John Burton Advocates for Youth. We're here to just echo the CFAP comments around CalFresh. As we all know, H.R.1 impacts our foster youth and our youth experiencing homelessness in California who are no longer qualified for an exemption. and we encourage anything that will keep food in their bellies and them on the right track. So thank you so much for your efforts.

Good evening. Good evening. Ronald Coleman Baeza here on behalf of the Coalition for Humane Immigrant Rights Chair. We are disappointed that the East Haven program under DSS's Refugee Program Bureau was not in the January budget proposal or the May revision. The East Haven program provides case management services for up to 90 days for asylees and other humanitarian immigrants who would otherwise not receive any other case management support This support goes a long way towards settling people making sure that they can find jobs access bank accounts credit find housing enroll their children in school and potentially health care navigation and also public benefits. We definitely need this program in place to continue these case management services because otherwise these families will not get the support that they need. We urge you to make a one-time allocation for $8 million in the budget to ensure that we can continue the e-saving program. Over 3,700 individuals have been helped by this program. About half of those individuals are human trafficking survivors. The other half are victims of violent crime as well, and we just urge the legislature to make this allocation. Thank you.

Thank you, Madam Chair. Andrew Mendoza, on behalf of the Alzheimer's Association, we are opposed to reinstating the Medi-Cal asset test limit, as we do believe that making individuals choose between spending down their benefits or their assets and maintaining coverage would cause them toxic stress and that has produced worse health outcomes. And then we are opposed to all of the cuts to the IHSS program and appreciate your leadership in that space. And then we do want to align our comments with you on the APS proposal as we are opposed and we couldn't have said it better than you did. So thank you so much.

Michael Henning, California Alliance of Child and Family Services. First, we look forward to continuing our work with CDSS on concerns regarding the residential rates proposed under the tiered rate structure. The proposed rates fall below current short-term residential treatment program funding levels, and many providers are already operating on extremely limited margins. Further reductions could lead to program closures and reduced capacity to serve youth with high acuity behavioral health and child welfare needs. Second, we appreciate the growing support behind the California Alliance-sponsored $30 million budget request to stabilize foster family agencies as they continue facing California's liability insurance crisis. Data collected in partnership with CDSS shows FFAs need significant support just to remain operational, and we respectfully ask for the legislature's support in advancing this proposal.

Good evening, Chair. Josh Wright with the California Association of Food Banks. We appreciate the Governor's proposed $38 million for CalFood in the May revise, but to meet the increased need from HR1 and the rising costs of living, we continue to request $60 million ongoing and $50 million one-time. We are grateful to you and the Senate as a whole for making CalFood a budget priority. We also want to urge funding for the California Association of Diaper Banks, which has a proven network that has provided over 200 million diapers since its inception. And then last, I just wanted to express our support for the creation of a translated online application for the SunBucks program.

Thanks.

Jaime Diazdan on behalf of Immigrant Defense Advocates, echoing the words of my colleague Jackie Gonzalez, expressing disappointment, a $20 million allocation by this administration in an amorphous pot is not a strategy when it comes to immigration legal services. Balancing the budget on the backs of unaccompanied immigrant children is not a strategy. Having to fight every year for CHIRP, for programs that have proven successful as pilots, is very disappointing. It's frustrating. It's not leadership. Thank you.

Good evening, Madam Chair. Christopher Sanchez with the Mesa Weather Group here on behalf of the Central American Resource Center, echoing all the comments of my colleagues on the immigration legal services and thanks to the Senate for their leadership on that item specifically.

Vetting cleanup Okay Amy Westling from ARCA want to acknowledge the administration for the thoughtful approach to the May revision for developmental services specifically The commitment of regional centers to partnering with the department to draw down those critical additional federal funds to keep our budget the way it's presented in May revise. And also want to express as you did Madam Chair, opposition to the asset limit change, which will impact individuals with developmental disabilities as will lots of other proposals in the May revision. And want to highlight that if people come to regional centers looking for replacement services, specifically for IHSS, those services will be provided to them at a higher cost because there won't be a federal match. And our services unit for unit are a higher cost overall. So it is a proposal that specific to our population fiscally doesn't make sense. Thank you.