May 2015 Blog – Governor’s May Budget Revise – First Takes

Governor’s May Budget Revise – First Takes

Surprising lack of increase in Mental Health Services Act Revenues – No major changes in health and behavioral health programs. Earned Income Tax Credit for poor is major non education new program.

On May 14th, Governor Brown released his May Revise to his proposed state budget for the 2015-16 fiscal year. It has been widely reported that state revenues are running way above CCCMHA_63_logoprojections and that most of the new money would go to schools. The May Revise confirmed both of those forecasts but surprisingly there was no forecasted increase in revenues from the Mental Health Services Act.

We really have no explanation for this. We have asked the State Department of Finance how it can be true that overall income tax revenues are 5% above January forecasts for the current 14-15 year and up 3% for the 15-16 so called budget year, but the incomes of millionaires remain the same as forecast in January.

The only explanation we can think of is that somehow the governor made ambitious forecasts for the MHSA revenues in January that already accounted for the growth in incomes (since MHSA forecasts in January were substantially above previous estimates) but chose in January to be much more cautious for overall state revenues.

If and when we get a better explanation it will be provided.

Like most health and human service advocates we were disappointed that there were no major restorations of funding in specific programs- not even in the Mentally Ill Offender Crime Reduction Grants which we had believed would be a priority for the governor in expanding funds for health since it had proven its value in reducing recidivism. We expect legislators to propose increases in this and other programs not included in the governor’s May Revise.

The governor did acknowledge that there are some general fund revenues available; while not increasing programs that are part of the “safety net” he did propose a tax credit for the lowest income individuals and families with incomes under $13,000 that tops out at $2,300 for a family of three or more with income under $6,000 and will cost just under $400 million annually.

The budget includes funding for a cost of living increase for MediCal physical health managed care plans (which does not affect county behavioral health) and acknowledges that the broader responsibilities of health plans for mild/moderate mental health and autism and the expanded county alcohol and drug programs are expected to add $360 million in state costs in 2015-16.

There is also $61 million (from federal and foundation funds) to implement health homes which will include all adults with severe mental illnesses and provide coordination to support better physical health for these individuals. It will also provide better integration with alcohol and drug services and physical health for everyone through screening for behavioral health lead in primary care and coordinated “warm hand off” services for those who screen positive as this program is gradually implemented through the Section 1115 Waiver program expected to gain federal approval in October.

Consistent with his January budget the governor provides more debt relief including the final payment of all of the pre 2004 state mandate obligations to local government. This includes nearly $700 million dollars to counties with the AB 3632 program the largest of these mandates.   In most counties that money goes to the county general fund, but in a few counties the funding goes to mental health and there are also providers whose contracts withheld funds until the county was paid and who will benefit directly from this funding.

The May Revise presumes the courts will allow the federal government to proceed with implementing the President’s order on immigrants and includes $62 million to provide full-scope Medi-Cal coverage to immigrants granted deferred action and $5 million for the Department of Social Services to provide grants to non-profits to provide application assistance to undocumented immigrants eligible for deferred action.

In education the governor includes $10 million for the multi tiered mental health programs envisioned in CCCMHA sponsored AB 1025 (Thurmond) which can support pilot programs to replicate the successful Seneca model program to determine if the cost effectiveness achieved in that program in Oakland (and a similar program run by the Desert Mountain Special Education Local Plan Area (SELPA) in San Bernardino County) can be achieved in other localities through similar county and school partnerships. This funding should help the bill get enacted.

The budget also increase funding for affordable housing from $200 million annually to $400 million as part of the so called Cap and Trade program which is a fee on factories and gas and oil use that is mostly for energy and transportation.

These were the main budget changes we noticed in our initial review.

There are probably others of importance to community behavioral health and we will provide updates as we obtain more information.