June 25, 2020

The budget agreement between the Governor Newsom and Legislature that will be voted on later this week provides $1 billion to counties for safety net services as a Realignment backfill in 2020-21. Of this total, $750 million is provided directly and $250 million is dependent upon the state receiving additional federal COVID-19 relief. The safety net funding is to be used for health and human services programs, entitlement programs, and programs that serve vulnerable populations. The final outcome represents an improvement over the May Revision, which did not include any backfill funding, and the Legislature’s version of the backfill, which also had $1 billion total, but made $600 million dependent upon federal funding.

The inclusion of this funding in the final agreement would not have been possible without the extraordinary and tireless advocacy of counties to communicate how critical this funding is to prevent devastating cuts to services for vulnerable individuals. Through member meetings, action alerts, testimony, and press events, counties have made a strong case on the need for this funding and successfully ensured inclusion in the final budget. On Tuesday, CSAC distributed this support letter in partnership with UCC and RCRC to urge final passage. 

The language in the Budget Act does not specify how the funding would be divided up among the various Realignment subaccounts or counties. Rather, the Department of Finance is required to consult with CSAC to develop the countywide allocation schedule for this funding. CSAC will immediately engage with the Department of Finance to ensure the initial $750 million in backfill funding can get out to counties as quickly as possible.

The remaining $250 million is dependent upon the federal trigger. By October 15, 2020, the Director of the Department of Finance must determine if the federal government will be providing an additional $14 billion in COVID-19 relief. If that occurs, counties will receive the additional $250 million and all of the other funding or cut reversals that are tied to the federal trigger will also occur. If an amount less than $14 billion, but greater than $2 billion, is provided, then each of the trigger items will be adjusted proportionally.

Finally, the Budget Act indicates that this funding is contingent upon compliance with the state’s stay-at-home order, Executive Orders, and Department of Public Health orders and guidance issued in response to the COVID-19 emergency. Local governments are required to certify compliance with the Department of Finance similar to the requirements described below for funding from the Coronavirus Relief Fund. CSAC will remain in close contact with the Legislature and Administration to gather additional details, move forward on the allocation schedule, and keep counties informed.