Governor Brown signed California's budget on June 30, 2011, retaining many of the deep cuts to core social service programs. While the Legislature now has the authority to pass a budget on a majority vote, a two-thirds super-majority is still required to increase revenue, which led the Governor and Democrat majorities to produce a budget that is largely based on cuts and hopeful revenue assumptions. However, a "trigger" mechanism is included in the budget, meaning that should revenues fall short of projections, additional cuts would automatically go into effect. Trigger cuts would include additional cuts to Developmental Services, In Home Supportive Services, and Medi-Cal managed care health plan rates, among others.
 
Governor Brown made $23.8 million in accompanying "blue-pencil" line-item vetoes; see details below for poverty impacts. For more budget detail, follow these links: Line-Item Vetoes; Enacted Budget Summary; Enacted Budget Detail Pages.

Health
 
In total, $1.6 billion was eliminated from Medi-Cal and $30.5 million from Healthy Families. The final health budget included:
•    Mandatory co-payments for all beneficiaries. This includes $3-5 for prescriptions, $5 for doctor and clinic visits, $50 for emergency room visits, and $100-200 for one or more nights in the hospital. These co-pays require federal approval.
•    A cap of 7 doctor or clinic visits per year, unless the visit is deemed "medically necessary" by the provider. This requires federal approval.
•    Elimination of enteral nutrition products for non-tube fed beneficiaries.
•    A cap of $1,510 annually for hearing aids.
•    Elimination of Adult Day Health Care (ADHC), with some funds transferred to transition ADHC beneficiaries into alternative services.
•    Maintaining a 10% rate reduction for Medi-Cal providers.
•    Increasing Healthy Families monthly premiums for children above 133% of the Federal Poverty Level.
•    Increasing Healthy Families co-pays to reflect the same co-pays for Medi-Cal hospital and emergency room visits.
•    Reducing vision coverage in Healthy Families.
•    $448 million in unallocated General Fund reductions to Medi-Cal and Healthy Families.
•    A shift of $860 million from Prop. 63 mental health funding into the Early Periodic Screening Diagnosis and Treatment program, Medi-Cal Specialized Mental Health Managed Care, and mental health services to students in Special Education.
•    Expiration of taxes on Medi-Cal managed care rates and hospital fees that have been matched for federal Medicaid reimbursements.
In addition to the cuts, the final budget reflects the Governor's May Revise proposal to move all children in the Healthy Families Program to Medi-Cal.  While this was reflected in the state's spending plan, it is moving on a slower timeframe than originally anticipated.
 
The Trigger: Should the Governor's revenue projections fall short, a "Trigger" action would go into effect. Additional cuts would include across-the-board reductions to Developmental Services and In Home Supportive Services, and a 15% rate cut to some Medi-Cal managed care health plans.

Housing
 
The budget package includes a pair of bills that would dissolve all existing redevelopment agencies (ABX1 26), but exempt any agencies whose parent city or county agrees to contribute to a $1.7 billion school fund in 2011-12, reducing to $400 million per year starting in 2012-13 (ABX1 27). Agencies could divert tax revenue mandated to go to affordable housing to help make the payment in 2011-12. If all agencies opt in, this would result in a loss of approximately $700 million in housing funds statewide.
 
If an agency chooses to dissolve, its existing housing funds and to some extent its obligation would transfer in a complicated scheme to the parent city or county, or to the local Public Housing Authority, or to the state Department of Housing and Community Development (HCD). In any event, no further housing funds would be generated.
 
In addition to the redevelopment action, the Governor used his "blue pencil" line-item veto authority to delete funding for HCD's "housing element" review process. The review is essential to ensure that cities and counties plan for affordable housing for lower-income households in the housing element of their general plans. Although the funding was vetoed, HCD's responsibility to review the elements remains in place.

Public Benefits
 
The budget and trailer bills signed by the Governor this week reversed some cuts to CalWORKs enacted earlier this year and reinstate funding for State Three Child Care, but retained many of the deep cuts to benefits that directly impact clients such as grant cuts, time limits or other program changes in CalWORKs and SSI. Beginning July 1, 2011 budget cuts totalling more than $1 billion will be implemented through the following changes to human services programs:
•    CalWORKs Time-on-aid reductions for adults cut from 60 months to 48 months of eligibility.
•    An 8% across-the-board grant cut for all CalWORKs families.
•    CalWORKs earned income disregard will be cut by half.
•    Young child exemptions will continue but without CalWORKs time on aid relief.
•    Cal-Learn Program for pregnant and parenting teens is eliminated.
•    Elimination of Challenge Grants aimed at preventing teen pregnancy.
•    Cut in Supplemental Security Income payments to federal minimum.

The final budget agreement also resolves revenue shortfalls by further reducing county administrative dollars, which Western Center believes will result in increased wait times and reduced accuracy in benefit determinations. It also suspends two information technology projects: the Child Welfare Services Case Management System Web Project and the Los Angeles Eligibility, Automated Determination, Evaluation and Reporting (LEADER Replacement) System.