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Budget and Policy Post
May 17, 2018

The 2018-19 Budget: The May Revision

Health and Human Services (HHS)-Related Funding to Address Homelessness

The Governor’s 2018‑19 May Revision proposes a package of actions and funding augmentations aimed at alleviating homelessness. Several of the major elements of the proposal are in the HHS area of the budget. Specifically, the proposals would: (1) create the Senior Home Safe program at the Department of Social Services (DSS), (2) augment the current California Work Opportunity and Responsibility to Kids (CalWORKs) Housing Support Program and CalWORKs Homeless Assistance Program at DSS, and (3) provide one-time funding to the Department of Health Care Services (DHCS) for county mental health services. Below, we describe these proposals and provide questions and comments that may assist the Legislature as it evaluates the Governor’s plan. As we noted, we are continuing to evaluate these proposals as more information becomes available, and information that addresses these questions may be available in the coming days.

Creation of the Senior Home Safe Pilot Program at DSS

One component of the Governor’s housing and homelessness package is a one-time General Fund allocation of $15 million—available to be spent over three years—to establish the Senior Home Safe pilot program at DSS. Under this pilot program, state funding will be awarded to counties or local organizations to provide housing-related supports to seniors experiencing homelessness or at risk of homelessness primarily due to elder or dependent abuse, neglect, self-neglect, or financial exploitation. Participating counties and local organizations are required to provide matching funds.

Initial LAO Comments and Suggested Questions. Upon our initial review of the Governor’s Senior Home Safe pilot program, we have no major concerns with the proposal to raise for the Legislature. However, prior to approving the proposal, we have identified several questions that the Legislature may wish to consider. We suggest asking the administration the following questions during the budget hearing process.

  • What Type of Housing-Related Services Will Be Provided and What Are the Associated Trade-Offs? There are different approaches to assisting homeless individuals and families, each with their own trade-offs. For example, the rapid rehousing model generally consists of short-term housing-related services—short-term rental assistance, moving cost assistance, or help with housing search—targeted to individuals experiencing a housing crisis and at risk of homelessness. In contrast, a more permanent, long-term approach generally involves providing housing-related services to recipients as long as they need it. The Legislature should ask which type of housing-related services the Home Safe program would provide and the associated trade-offs associated with the selected models.

  • How Will DSS Administer the Program? Currently, the Housing and Homelessness Bureau in DSS coordinates and manages various housing programs, such as the CalWORKs Housing Support Program and the Housing and Disability Advocacy Program. It is unclear if the Home Safe program will also be administered through the Housing and Homelessness Bureau or through Adult Protective Services. Additionally, it is unclear how DSS will prioritize and select which eligible applicants will receive state funds, and how the level of funding they receive will be determined. The Legislature could amend the trailer bill language to include certain selection criteria, if desired.

  • How Will DSS Manage and Oversee Different Types of Service Providers? Under the proposal, counties, tribes, and local organizations are eligible to receive Home Safe funds. The Legislature may want ask the administration for the rationale for including local organizations and if DSS has experience overseeing local organizations in other programs.

  • How Will the Program Be Structured so That a Comprehensive Evaluation May Be Completed? Participating counties and local organizations are required to collect data on recipients and track their long-term housing status, which will in part inform the proposed program evaluation conducted by an independent research agency. However, to the extent that counties and local organizations structure their programs differently and provide different services, the evaluation may not be able to determine specifically what type of intervention was successful in reducing incidences of homelessness. The Legislature may want to ask the administration how it will ensure program continuity and comparability across all participating counties and local organizations in order to conduct a comprehensive program evaluation.

  • What Are the Reporting Requirements? It is unclear if and how frequently the administration will be providing the Legislature with progress reports on the implementation and potential impacts of the Home Safe program over the next three years.

  • How Will the Home Safe Proposal Fit in With the Creation of a Homelessness State Plan? As a part of the housing and homelessness package, the administration proposes that the Homeless Coordinating and Financing Council (the Council) provide statewide guidance on homelessness issues. In addition, the Council would develop a statewide plan to coordinate the various housing and homelessness investments throughout the state. It is unclear if and how the Council would inform the implementation of the Home Safe program. For example, it is unclear if DSS would have to work with the Council to implement and evaluate Home Safe given the Council’s overall role in coordinating various housing and homelessness programs throughout the state.

Homelessness Package Includes Expansion of CalWORKs Housing Programs

As part of the Governor’s funding package to address homelessness, the May Revision includes an additional $24 million in 2018‑19 for the Housing Support Program and an additional $8 million in 2018‑19 for the Homeless Assistance Program. Below, we provide an overview of these programs and provide our initial thoughts.

Housing Support Program (HSP). Through funding provided for HSP, participating county human services agencies help CalWORKs families who are homeless or at-risk of becoming homeless find and move in to permanent housing. Each year, funding allocations are provided to 49 counties that currently participate in the program. In recent years, $47 million has been allocated to participating counties for these purposes. The Governor’s proposal would increase this amount by $24 million in 2018‑19 and by an additional $24 million in 2019‑20 ($95 million total) and ongoing.

Homeless Assistance Program (HAP). The HAP provides daily housing payments to homeless (or at risk of becoming homeless) CalWORKs families. (The program also provides payments to help families cover cost related to securing permanent housing—for instance, security deposits, first and last month’s rent, or back payments to avoid eviction.) Temporary housing assistance can be used for up to 16 days each year. This assistance is designed to serve as a temporary bridge for families as they search for permanent housing. The administration proposes to increase the daily maximum voucher amount from $65 to $85. No other changes to the Homeless Assistance Program are proposed. The daily rate was last increased, from $40 per day to $65 per day, in 2006.

Proposals Appear Reasonable. The administration’s homelessness proposals in the CalWORKs program represent an expansion of existing programs that assist homeless CalWORKs families and those at risk of homelessness.

Follow-Up Questions About the Proposal. Although the proposal is an expansion of existing programs and otherwise appears reasonable, the Legislature may wish to direct a few follow-up questions to the department:

  • Have counties indicated that there is outstanding demand for HSP services?

  • What obstacles have counties faced in operating HSP successfully?

  • Are there related policy changes that could make HSP more effective?

  • How often are counties able to secure permanent housing for CalWORKs families within 16 days?

  • Are there related policy changes that could make HAP more effective?

  • What would the relationship be between DSS and the statewide Homeless Coordinating and Financing Counsel?

Provide One-Time Funding to DHCS for County Mental Health Services

May Revision Proposes Augmentation for Homeless Mentally Ill Outreach and Treatment. The administration proposes a one-time allocation of $50 million General Fund support for DHCS to distribute grants to counties to fund multidisciplinary teams engaged in intensive outreach, treatment, and related services for homeless persons with mental illness. Proposed budget bill language provides that counties could not use funding from this appropriation to supplant other funds for these purposes, but would be encouraged to use the grant funds to leverage other fund sources, such as federal grants. According to the administration, the grants would be distributed to counties in accordance with principles used in a similar previous grant program enacted by Chapter 518 of 2000 (AB 2034, Steinberg) and Chapter 617 of 1999 (AB 34, Steinberg). These statutes established various criteria related to the award of grants, service standards, reporting, and program evaluation for county-administered pilot mental health programs for previously incarcerated or homeless mentally ill persons. The funds are proposed to be available for encumbrance through mid-2020. DHCS would be authorized to use up to $150,000 of the funds for administrative costs.

One-Time Nature of Funding Proposal Raises Questions. We agree with the administration that homelessness and mental health are significant and related issues in the state. We do have questions, however, as to how limited-term funding for services is intended to fund ongoing needs. In order for grant-receiving programs to have lasting effectiveness, it might be necessary to allocate additional sustaining funds. The administration has not currently indicated that it considers the programs that would receive grants as pilot programs that may receive ongoing or expanded funding in the future. It is also unclear how the administration determined the particular size of the proposed allocation.

Unclear How Proposal Interacts With the Governor’s Larger Mental Health and Homelessness Initiatives. Additionally, this program is proposed by the administration in conjunction with the No Place Like Home program, which also directs funding to counties for homeless persons with mental illness, but with an emphasis on financing the provision of housing for the target population as opposed to funding teams that provide mental health services. It is uncertain the extent to which the administration intends that these two programs will be coordinated or interact with each other.

Proposed Authorizing Language Grants Administration Significant Discretion and Lacks Detailed Reporting Requirements. Furthermore, while the administration has stated its intent to incorporate program design and lessons learned from the pilot grant programs established by AB 2034 and AB 34, the proposed budget bill language does not codify this intent and therefore lacks the same level of detailed prescriptions related to the award of grants, service standards, reporting, and program evaluation contained in those prior statutes.

Questions for the Legislature to Ask the Administration. During May Revision budget hearings, we recommend the Legislature obtain additional information from the administration regarding this proposed grant program, including:

  • Specific Objectives of the One-time Funding. Such information could include both short-term goals and how this program fits into a broader, long-term strategy for addressing homelessness and mental health. The Legislature might also want to consider to what extent the proposed program should be coordinated with the larger mental health and homelessness initiatives—including the No Place Like Home program—and what the administration’s rationale is for doing so or not. The administration should also disclose specific objectives of what this proposed funding is intended to achieve, such as, for example, the number of homeless persons with mental illness that will be served.

  • Administration’s Perspectives on Appropriateness and Trade-Offs of a One-Time Funding Allocation. The administration should address (1) the appropriateness and trade-offs of providing limited-term funding for services where there are ongoing needs and (2) its plans, if any, of structuring the proposed grant program as a pilot program.

  • Greater Detail on How the Program Will Be Structured. The administration should provide the Legislature with a more explicit description of which components of AB 2034 and AB 34, as well as the subsequent recommendations from studies of those programs, would be incorporated into this proposed program.