The California Legislature has approved a $138.6 billion-dollar General Fund budget for fiscal year 2018-2019. Pundits expect Governor Jerry Brown to sign the budget act and make no line item vetoes.
The budget approved by lawmakers includes $673 million for local child support agencies (about $264 million state general fund and about $409 in Federal Financial Participation). Of the $673 million total appropriated, about $589 million is slated for administration and about $83 million for automation.
Included in the amounts above is a State General Fund appropriation of a $3 million increase above status quo with $6 million from Federal Financial Participation as additional funding for local child support programs. A coalition of 19 LCSAs led by San Joaquin county and working with the Child Support Directors Association had requested a $22.7 million general fund increase, and the Senate and Assembly Budget Committees and Budget Sub Committees initially approved this increase. Ultimately the budget deal that was worked out by the “Big Three” and then approved by the Budget Conference Committee reduced the increase to $3 million SGF and $6 million FFP.
The Budget Bill language directs the California Department of Child Support Services to “work with the Child Support Directors Association of California to determine an allocation schedule for these funds.” Your Association has already begun these discussions weighing the impacts of several options. The Association is expected to deliver a recommendation to the California Department of Child Support Services by early July.
Additionally, budget trailer bill language as included in Assembly Bill 1811 and Senate Bill 845 requires the Director of California Department of Child Support Services to work with the Child Support Directors Association President to identify refinements to the ongoing child support budgeting methodology and to identify programmatic operational efficiencies. The California Department of Child Support Services must submit a report to the Legislature with recommendations on those topics no later than July 1, 2019.
In addition, AB1811 and SB845 require the California Department of Child Support Services to submit an annual report on case-to-staff ratios, collections, recoupment, and number of families served. The first-year report, due to the legislature by March 1, 2019, is limited to only those counties that receive funding from the augmented $3 million.
The Legislature prioritized funding to address homelessness and affordable housing with $700 million in grants cities, plus $280 million to repay county debts related to repealed mandates, and $67 million for debris removal and property tax replacement in counties impacted by the recent wildfires and debris flows. The 2018-2019 budget also includes $1.3 billion to build ten new courthouses. The ten new courthouses are slated for: Glenn County (renovations and additions to the Willows courthouse), Imperial County (a new El Centro courthouse), Riverside County (a new Indio juvenile and family courthouse and a new Mid-County civil courthouse), Sacramento county (a new Sacramento courthouse), Shasta County (a new Redding courthouse), Siskiyou County (a new Yreka courthouse) Sonoma County (a new Santa Rosa Criminal Courthouse), Stanislaus County (a new Modesto courthouse), and Tuolumne County (a new Sonora courthouse).
The budget sets another $2 billion into the state’s uncommitted reserves leaving about $16 billion in that fund and puts $200 million into a new “safety net” reserve for social services.
The budget agreement met with some Republican opposition but given the legislative majority held by Democrats, the budget agreement was easily passed by both houses. Members of the Republican caucus warned that the budget does not address the state’s unfunded pension commitments. Democrats countered arguing that the state’s accumulated reserves will allow it to navigate the coming financial downturn. It is clear though that unfunded pension liabilities will certainly be an issue, which all county agencies will be struggling with soon.