The 2023-24 California Spending Plan

Human Services

CSD

A department under the California Health and Human Services Agency, the Department of Community Services and Development (CSD) oversees the state’s federal funding allocations for the Low-Income Home Energy Assistance Program (LIHEAP), Community Services Block Grant, and Low-Income Household Water Assistance Program (LIHWAP)—the last of which is a limited-term program created in 2021-22. In addition, CSD oversees the state’s Low-Income Weatherization Program (LIWP). In overseeing these programs, CSD provides funding to private nonprofit and local government organizations that help low-income families achieve and maintain economic security, meet their home energy needs, and reduce their utility costs through energy efficiency upgrades and access to renewable energy.​ In 2021-22, CSD also began to administer the state’s limited-term California Arrearage Payment Program (CAPP), providing payments directly to energy utility providers to offset customer debts accrued during the COVID-19 pandemic.

This post details funding changes to three of CSD’s programs—CAPP, LIHWAP, and LIWP—included in the 2023-24 spending plan.

Reverts Unspent CAPP Funds to General Fund. The budget package transfers $549 million in unused 2022-23 CAPP funding back to the state General Fund; this reversion helped to address the state’s overall budget problem. These funds are the unspent portion of the $1.2 billion augmentation that had been provided for the program in 2022-23. The $1.2 billion augmentation was estimated to be the remaining amount of eligible residential customer arrearages, based on a survey that CSD conducted of energy utility providers in the spring of 2022. However, when CSD ultimately disbursed the funds in the fall of 2022, only $647 million was needed to pay off identified remaining eligible arrears. (The difference between the estimated remaining arrearages as of spring 2022 and the actual amount needed to address identified arrearages as of fall 2022 likely stems from a variety of factors; see our prior post for more analysis on this issue.) As per statute, in the coming months, CSD will provide a final report to the Legislature on 2022-23 CAPP results.

Shifts State LIHWAP Dollars Back to State Water Resources Control Board. The budget package reverts $200 million from LIHWAP to the California Emergency Relief Fund, and reallocates those funds back to the California Water and Wastewater Arrearage Payment Program (CWWAPP) administered by the State Water Resources Control Board. The funds initially had been allocated in 2021-22 to CWWAPP, but due to some eligibility rules and other limitations of the program, a significant portion of the funds were unspent. Some of these funds then had been transferred by the 2022-23 spending plan to provide a state funding supplement to the federally funded LIHWAP—a program with somewhat similar goals but that uses a different program model. At the end of the 2022-23 fiscal year, CSD had not yet begun spending the $200 million augmentation for LIHWAP because the department had first been spending down the allocated federal funds ($116 million in 2021-22), for which the performance period will end in March 2024. The reversion of the state dollars as part of the 2023-24 spending plan means LIHWAP will now end once the federal dollars expire rather than continuing as a state-funded program. We note that, in addition to transferring the $200 million back to CWWAPP, the 2023-24 budget also includes language that extends the program’s eligible arrearage period from June 2021 to December 2022, which will allow the program to pay down additional water and wastewater customer debt accrued during the pandemic period.

Funds LIWP With GGRF Dollars. As part of the state’s broader Energy Package funded by the 2021-22 budget, LIWP was allocated $25 million General Fund in 2022-23 and an additional $25 million in 2023-24. The 2023-24 spending plan changes the source for the 2023-24 expenditures, providing funds from the state’s Greenhouse Gas Reduction Fund (GGRF) rather than the General Fund. This shift helped to address the state’s overall budget problem.