Major Changes Included in the May Revision

Transportation

The Governor's May Revision proposes $11.5 billion over three years to begin implementation of the transportation element of the Proposition 1B bonds as part of the Strategic Growth Plan. Changes since January include an acceleration of funding for the Corridor Mobility and Highway 99 programs and additional funding for STIP projects and retrofitting school buses.

Public Safety

• $25 million in ongoing funding for the California Adult Probation Accountability and Rehabilitation Act (CAPARA) to provide all local probation departments with a dedicated funding source to increase the effectiveness of adult probation services in California. The CAPARA is designed to support statewide local probation department efforts to reduce crime through improved rehabilitative services and increased supervision of adult probationers ages 18 to 25.
• $7.8 million in one-time funding for 2007-08 to pay the outstanding current-year claims, along with $1.5 million to adequately fund the base to pay projected claims in 2007-08 for the costs associated with prosecuting crimes committed by state inmates and other county services related to state inmates.
• An additional $1.5 million to reimburse local entities for the costs of housing state inmates and supplying routine medical care at the revised rate. The May Revision also includes $6.1 million to reimburse the Los Angeles County Sheriff's Department for the delay in moving inmates out of the Pitchess Detention Center. Finally, the May Revision proposes statutory changes intended to ensure that local entities submit their claims to either the CDCR or the State Controller in a timely manner.
• $581,000 for CDCR's Office of Facilities Management to provide immediate staffing needs to support the prison construction projects authorized by AB 900 and $2 million for the Corrections Standards Authority to administer the local jail bed construction grants authorized by AB 900.
• A net decrease of $7.2 million General Fund as a result of adjusting the per capita cost for housing wards within the Department of Juvenile Justice to reflect 2007-08 costs, and revising the number of juvenile offenders that will be housed locally based on updated estimates of intake. The DJJ’s institution population is now projected to decrease by 931 juvenile offenders by June 30, 2008.

Health and Human Services

• A total of $4.7 million has already been allocated to local food banks and the California Emergency Foodlink, a private organization that stores and delivers food during emergencies; the May Revision proposes an additional $4.45 million.
• A net increase of $65.6 million for community mental health services relative to the Governor’s Budget. The major adjustments include an increase of $67.4 million for the Early and Periodic Screening, Diagnosis and Treatment Program and a decrease of $1.9 million for the Mental Health Managed Care Program.
• The County Health Initiative Matching Fund Program allows county or local public agency funds to be used to match unused federal State Children's Health Insurance Program funds to provide health care for uninsured children in families with incomes up to 300 percent of the federal poverty level. These county programs are frequently referred to as Healthy Kids Programs. The May Revision expects expenditures to decrease by $309,000 ($108,000 county funds and $201,000 federal funds) in 2006-07 and by $357,000 ($125,000 county funds and $232,000 federal funds) in 2007-08 due to updated county caseload and expenditure information.
• The average monthly Medi-Cal caseload is expected to decrease by 59,500 beneficiaries, to 6,534,600 eligibles, which is a decrease of 0.9 percent from the level projected in the Governor's Budget. The revised caseload is 0.6 percent lower than the 2005-06 caseload. The May Revision includes a net General Fund decrease from the Governor’s Budget level including a $21.7 million decrease in county and other administration costs due to lower caseload growth, the final reconciliation of county administrative costs for 2004-05, and a longer-than-expected lag in billing of county outreach costs.

General Government

• A decrease of $39.1 million associated with the elimination of Williamson Act subsidies. These subsidies partially backfill property tax revenue that local governments forfeit when they enter into contracts with landowners to not develop land in exchange for reduced property tax assessments. The Administration encourages local governments to continue their Williamson Act contracts, however, since property tax revenues have recently grown at a stronger rate than state General Fund revenues, these subsidies are no longer necessary to maintain the fiscal integrity of local governments.

Items Largely Unchanged from the Governor’s 2007 January Budget

Transportation

• $3.2 billion ($801 million from the General Fund, $158 million from the State Highway Account, $1.8 billion in federal funds, and $441 million from other special funds) in local assistance funding for transportation in 2007-08. This includes $645 million for local mass transportation projects.
• In November, voters approved Proposition 1B, providing $19.9 billion in bond funds for transportation projects, of which approximately $7.1 billion will go to local governments for their transportation infrastructure needs. In 2007-2008, the Governor's Budget proposes the following bond appropriations: $600 million for local streets and roads; $600 million for local transit; $200 million for state and local transportation partnerships; $65 million for grade separations; $10 million for seismic bridge upgrades.
• $30 million to create the Housing and Urban-Suburban and Rural Parks program to increase housing production by rewarding local governments with grant funds to create or improve well designed parks.

Public Safety

• $1.7 million in 2007-08 for the Department of Corrections to perform pre-activation functions necessary to implement a program for Female Rehabilitative Community Correctional Centers. These facilities will provide beds for 4,350 female offenders, and enhance treatment, vocational and educational services that target substance abuse and employability.
• An additional $1.3 million in 2007-08 for mandatory residential aftercare programs and funding for 5,500 residential aftercare beds for non-serious, non-violent offenders.
• The Budget includes $10.9 million (General Fund) to support 426 Drug Treatment Furlough beds that had previously been funded with voluntary aftercare dollars.

Health and Human Services

• $230.1 million due to revenue growth in the State-Local Realignment program.
• $2.0 million General Fund to provide additional local assistance funding to increase surveillance staff for HIV reporting activities and help California retain $50 million in critical federal funding.
• $3.6 billion ($2.2 billion General Fund), a net increase of $251.3 million ($46.5 million General Fund) from the revised 2006-07 budget, to support California’s 21 regional centers that purchase and coordinate services mandated under the Lanterman Act for persons with developmental disabilities.
• $3.4 billion ($762.9 million General Fund), an increase of $927.6 million ($47.4 million General Fund) compared to the revised 2006-07 budget, for community mental health services.
• $15 million, a $5 million increase, in Proposition 98 General Fund to augment the budget for the Early Mental Health Initiative (EMHI), which provides grants to local education agencies for supportive, non-clinical mental health intervention and prevention services to children (grades K-3) who have mild to moderate school adjustment difficulties.
• Revenues to the Mental Health Services Fund, which appropriates funds to the Department of Mental Health for county implementation of Proposition 63, are projected to increase over previous estimates by $495.7 million in 2007-08, for a total estimate of $1.8 billion.
• $194.9 million General Fund to fund local agency administrative costs of the Department of Child Support Services.
• $3.2 million ($2 million General Fund) for probation specific activities related to the implementation and completion of the county system improvement plans in the Child Welfare System.
• $4.8 billion, an increase of $231.4 million above the 2006-07 budget, for the State-Local Realignment program.
• Increased funding of $23 million General Fund to maintain the current funding level for local child support agencies.
• Savings of $16 million through a one-time reduction in the counties' single allocation funding for employment services, child care, and administration.
• $52 million to fully fund School Mental Health Services.