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The Impact of Gov. Brown’s Proposed Budget on Young Children and Families

The following is a brief overview of key elements of Gov. Brown’s proposed 2017-18 budget affecting young children and their families within First 5 LA’s priority outcome and legacy investment areas:

Early Care & Education – California funds subsidized child care and preschool through various programs including the California State Preschool Program (CSPP), vouchers, and child care associated with CalWORKs, the state’s Temporary Assistance for Needy Families (TANF) program. During the recession, early care and education (ECE) funding was cut by more than $1 billion. Despite funding increases in recent budgets, ECE funding remains 20 percent lower than pre-recession spending, and First 5 LA has worked to coordinate ECE budget advocacy in Sacramento to expand investment in early learning. 

In last year’s Budget Act, the governor and Legislature agreed to multi-year funding increases through 2020 to increase funding for ECE, raising provider reimbursement rates and expanding the number of subsidized ECE slots available to families statewide. This agreement was expected to add $527 million every year to state ECE funding by 2020.

In the proposed budget, however, the governor eliminates the expected funding increase for fiscal year 2017-18, a total reduction of $226.8 million. This funding would have provided nearly 3,000 additional state preschool slots, and increased reimbursement rates for providers to help cover the cost of changes to the minimum wage.

If the state’s fiscal outlook improves over the next year, the governor commits to putting this funding in the 2018-19 budget, but future funding is not guaranteed.

Health In his budget, Gov. Brown notes the uncertainty of federal changes to the Affordable Care Act (ACA), which has been proposed for repeal by Congress and the Trump administration and could significantly impact funding for critical health programs like Medi-Cal, the state’s Medicaid program for low-income Californians. For now, the governor’s proposed budget reflects existing state and federal policies and funding; any federal changes will be addressed in future budget revisions.

The budget does assume one federal change related to First 5 LA’s priorities, specifically the Children’s Health Insurance Program (CHIP), which is funded until September 2017.  Gov. Brown’s budget assumes that Congress will pass new legislation to extend CHIP, but at the historic non-ACA federal matching rate; as a result, California’s share of cost is assumed to increase. In anticipation of this, the budget proposal allocates $536.1 million in General Funds.

The governor’s budget proposal also maintains California’s commitment to providing full-scope Medi-Cal coverage to approximately 185,000 children regardless of immigration status, a recent state policy change supported by First 5 LA.

Family Support – The budget provides additional revenue to programs serving families in need. This includes increased funding for CalWORKs to repeal the Maximum Family Grant (MFG) rule, which prevented families from receiving additional CalWORKs benefits for children born while their parents received assistance. Repealing the Maximum Family Grant Rule increases supports for low-income families during the birth and first years of a new child, a critical time in any family's life. Gov. Brown repealed the rule last year in a state budget deal with lawmakers.

First 5 LA Legacy Investments – In prior years, First 5 LA invested in a number of oral health initiatives, such as virtual dental homes (VDHs) and medical-dental coordination, as well as programs that provided permanent supportive housing and related services for families that were homeless or at-risk of homelessness. Although the governor’s budget does not propose new funding for low-income housing, it does tap into Prop. 56 revenues to provide more than $37 million to support oral health education, prevention, and treatment of dental disease. 

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