Senate Budget and Fiscal Review Subcommittee No. 3 on Health and Human Services

Senate Budget Sub-committee number three will now come to order. I want to start off by by thanking everyone who is here today. We will be discussing some very important issues within the Governor's May revision. As we tackle what we currently have is a $12 billion deficit.

Many people ask why is there so much focus on on this Sub-committee? Why are there so many cuts within the health and human services or proposed cuts within the health and human services realm?

And some may not realize that Health and Human Services is the second largest expenditure in the California budget next to education, which does have some assistance with Prop 98 funding. We have many new programs that we have created and established over the last few years to really align with California values.

And those values include the fact that we believe that health care is something that should be provided for everyone. It is essential, but access is even more critical at times than just having an insurance card. And so we have worked to increase access to providers, increased our support for our workers and building up our workforce.

We have established, not only through bills and not only have the California residents established through passage of Prop 1 a few years ago, but in our budget we have affirmed that we are a reproductive freedom state. Your budget does speak of your values.

And so our current issue and our current dilemma is to work within this new reality of our state budget deficit, understanding that we know that it will just grow within the next few months given what the Federal Government will do. So today will be a long hearing, a much longer hearing than usual.

We're going to start and go until 11:30 this morning. We will then take a extended recess because we will be dealing with some budget stuff within the Senate. And we will reconvene at 3:30 and go until whenever we finish.

We want to make sure that we give space for all of the departments to be able to speak today. We want to make sure that we give space for all of the Members of this Committee to ask their questions and get clarifying answers.

And we want to make sure that everyone who comes from the community, from our constituents up and down the state are able to not only hear but also have their voices heard. So this will be a very long hearing.

We will be hearing from four departments throughout today and also including the Juvenile justice, some issues within Juvenile Justice. And so we'll hear from the Department of Healthcare Access and Information, California Department of Public Health, Department of Healthcare Services and the Department of Social Services, particularly the in Home Supportive Services items. We heard the other items yesterday.

We will solicit public comment after completion of the presentation. Items within the Agenda which will be at the very end of the hearing and at which time the public may comment on any of the previous items. And so we will begin with the first item dealing with our juvenile trailer Bill.

There we go. Good morning Madam Chair and Members of the Sub-committee. My name is Anthony Franzoia away with the Department of Finance. I'll give a very brief overview of the Board of State and Community Corrections and then turn it over to my colleague Aaron Mcguire, the Executive Director of BSCC.

I'm happy to talk about any of the issues in BSCC's finance letter, but I think primarily we're here to talk about the trailer bell language for the suitability of juvenile confinement. So again, if there are any questions, happy to answer them.

But again, Executive Director Mcguire is a true subject matter expert here, so I'll turn it over to him for an overview of that tbo.

Thank you. Madam Chair, Good morning. Appreciate the opportunity to present on this item. I want to thank your staff for accommodating the schedule so that I could be here this morning. I'd like to do just a brief overview of the BSEC and then talk about the issues which bring this trailer bill forward.

The Board of State and Community Corrections. As you may or may not know, we don't visit the Sub-committee very often, so appreciate the time. We set the minimum standards for both adult and juvenile local detention facilities and we inspect for compliance with those regulations.

As you may be aware, the board has made engaged in ongoing inspections and reinspections of specifically the Los Angeles County facilities for several years. This has resulted in a finding of unsuitability of 2 of Los Angeles juvenile halls. This was Central Juvenile hall and the Barry J. Nydorf Juvenile Hall.

This had happened at several points with the most recent finding of unsuitability back in May 2023. Because those facilities were found by the board to be not suitable to house the youth.

The predisposition youth at both those facilities were moved to the Los Padrinos Juvenile hall where issues of non compliance with the Board's regulations have continued since that facility opened now two years ago.

More recently, in October of 2024, Los Padrinos was deemed unsuitable for the housing of youth which triggered a 60 day notice for the county to vacate Los Padrinos following a reinspection in December was still determined that the facility was out of compliance with our regulations and the county made it clear and the Department made it clear that it would continue to operate Los Padrinos as a juvenile hall in violation of the Welfare and Institutions Code.

Subsequent to that In April, the county filed a lawsuit against the Board of State and Community Corrections regarding our inspection process. And what we're seeking to do in this trailer Bill is we are seeking further authority and authorization to enforce the board's authority under the Welfare Institutions Code in terms of finding this facility not suitable.

The language specifically addresses a 2000 Attorney General opinion that held that the board lacks legal authority to initiate a civil suit against a county or to enforce the its findings. Inspection findings of unsuitability.

This language would specify also what the board can consider when determining whether a facility would be suitable and also make some technical changes specifying that the board can conduct more than one inspection every other year and then would explicitly authorize our staff to approve corrective action plans.

We believe that it's important to give the board additional authority at this time to enforce the board's minimum standards. Thank you for the opportunity to present and I'm happy to answer any questions.

Thank you. Anything from LAO?

Jason Constantouros, LAO, we haven't raised concerns with this proposal.

Thank you, Senator Menjivar.

I am so thankful for this trailer Bill Language. I think we've been asking in the Subcommitee. I know you haven't visited us, but we've been talking about this space for a long time and we always thought that there was no teeth behind bsec. And I think these are finally the teeth that are needed.

Especially as you mentioned, those two facilities are in the county that I represent. So I want to thank. I want to thank you all for bringing this and putting this together.

Thank you, Senator.

Also want to. I'm very appreciative of this trailer bill Language. Just one quick question. Is this the first time you've ever had an issue with a county not complying with the recommendation from bsec?

This. This is the first time where. Where. Well, yes, I'll just say, yes, it is the first time where. Where a county has refused to abide by the unsuitability findings.

Okay, well, thank you so much. Welcome to Subcommitee number three and thank you so much for your presentation.

Thank you, Senator.

We will now move to the Department of Healthcare Access and Information for issue number one.

Good morning, Madam Chair and Senator Menjivar. Elizabeth Landsberg with HCAI the Department of Healthcare Access and Information to present our budget change proposal proposals. And I believe my colleagues at the Department of Finance have an initial statement.

Good morning, Chair. Committee Members Joseph Dahlson, Department of Finance. We wanted to offer some opening remarks ahead of discussing the proposed budget proposals and solutions at the Governor's Budget. Both the Administration and Aleo noted that baseline, except expenditure growth, was outpacing revenues.

With the release of the 25-26 May revision, we are addressing the state's third consecutive deficit budget, which is 12 billion in the coming year. For context, the past two budgets addressed approximately 30 billion and $50 billion deficits, respectively.

These previous budgets, however, were solved largely by eliminating significant one time funds, special Fund transfers and loans, withdrawing from reserves and attempting to cut spending in our own departments. Now, amidst our third consecutive deficit, these solutions have largely been exhausted. We are now forced to look deeper and make more difficult decisions.

While we acknowledge these proposals may be met with concerns, the Administration would like to reiterate that the May revision is a starting point. To the extent Members of the Legislature have alternative solutions or approaches to addressing the budget deficit, we will continue to engage with the Legislature as we work towards a final budget agreement. Thank you.

Good morning. Libby Abbott, Deputy Director for Health Workforce Development and I'll speak to our BH Connect health workforce initiative bcp.

So as part of a combined BH Connect bcp, HCAI requests 57 positions and expenditure and reimbursement authority of up to 1.9 billion over five years to implement and administer the Behavioral Health Community based Organized Networks of Equitable Care and Treatment Workforce Initiative, as well as Senate Bill 326, Proposition 1.

HCI also requests public contract code exemption authority for these funds to implement the workforce programs within the required time frame. In addition, we propose statutory language authorizing the use of third party administrators to make sure that we are able to move quickly and administer these programs programs within the requested timelines.

Any comments from Lao?

Jason Concentras, Lao so we have not raised concerns with these proposals yet, although we are still reviewing many of the proposals and as your agenda notes, many of the sort of backup information, including the proposed trailer Bill legislation, hasn't released yet.

So as we get more information and review things as we identify any concerns, we'll be in touch with the Committee. Thank you.

Senator Mengvar. Jason, as you mentioned, because there's lack of information, just clarity on the shifting is it we're just shifting money around from one program to the other.

I would defer to DAF to explain the split between federal and state funds, but the up to 1.9 billion is actually predominantly federal funds leveraged with a state contribution.

But Senator Mendo, these are new dollars through the BHConnect waiver that will be used for five different work streams. I think we presented at your initial January 10th budget hearing about those five initiatives, but this is not moving from an existing program to another program.

Okay. We're just transferring from that Fund into the programs.

As always with Medicaid, we have to come up with a non federal share. So we are putting up Non Federal Dollars to draw down federal dollars for these workforce initiatives and other components of the B waiver.

Okay. And then the withdrawal, relocation, rent adjustment. Just want to confirm that move is no longer happening.

We were going to present additional BCPs and we're going to get to that one. We're happy to jump to it if you'd like or go through the other.

So under issue one.

So okay. Yes. Yeah, I think there are five BCPs under issue one. So we're happy to move if the Committee's ready. Yep, go ahead.

Great. Thank you, Madam Chair. Scott Christman, Chief Deputy Director for HCI. I'll take the next bcp, which is an adjustment May revision revises the Governor's Budget proposal for health Care payments database program from 22 million in 2025-26 and ongoing to 181,000,001 time in 202526.

The Administration will continue to evaluate the program's funding needs through the annual budget process. With that, the Administration is also withdrawing Governor's Budget tbl, allowing for the revenue transfer from the Managed Care Administrative Fines and penalties Fund in lieu of provisional language authorizing a one time transfer of those funds in 25-26. Great, thank you. Next item.

Long Term Care HCI requests $597,1 time in position authority for three positions to implement new healthcare data reporting requirements related to the federal CMS minimum staffing standards for long term care facilities and the Medicaid Institutional Payment Transparency Reporting final rule.

And then on the PBM.

I'm sorry, can you go back to the healthcare payments data program funding adjustment? Absolutely. You know, I mentioned this yesterday. One of the issues with none of this stuff being available is it is hard for us to really be able to engage in a meaningful discussion.

So the information that you're stating right now, none of us have up here. So if we can go through it again, that would be great.

Absolutely. Thank you, Madam Chair. So in the Governor's Budget original proposal for Jan.10, the HPD program had put in a BCP for $22 million in 25-26 and ongoing the revision in May revision actually brings that amount down to 18 million.

So we're revising down and we're going from ongoing to a single year 25-26 so that we can continue to evaluate the sort of sustaining cost for that program and Department of Finance. Anything to add? Nothing further to add.

So was it that you just looked and realized that the 22 million was an overestimate?

To address the projected budget shortfall and the General Fund implications of the Governor's Budget proposal, the Administration proposes to scale. Back the proposal to review the program. As part of the annual budget process.

Okay, go ahead. Did you want us to move to the pharmacy benefit manager proposal, Madam Chair? Yes. And I know you discussed. I know Department of Managed Healthcare presented this as well.

So, for our portion of this joint BCP, HCAI requests six positions and 6.2 million to support enhanced oversight of pharmacy benefit managers, or PBMs, to improve transparency and accountability in the prescription drug market. So this initiative will require PBMS to report data to gain a better understanding of costs and help improve affordability of drugs for Californians.

So again, we've developed this BCP with our colleagues at dmhc, who, as they noted, would be responsible for the PBM licensure portion of the proposal, and then HCAI would be responsible for the data reporting and cost transaction transparency requirements.

So we will build upon the successful implementation of the Health Care Payments Data Program, California's All Payer Claims database, to require PBMs to submit to the HPD. This builds on our extensive experience in collecting and reporting prescription drug data.

We're currently collecting claims data from health plans and insurers, but we aren't getting the granular data from the PBMs themselves to understand their cost structure. So in this proposal, DMHC would replace the current registration for PBMS with a licensure mandate. And that licensure mandate would include the requirement for PBMs to submit data to HCAI.

PBMs would provide HCAI information about pharmacy benefits they manage, including various aspects of drug pricing, including wholesale acquisition costs, average wholesale prices, and national average drug acquisition costs. Prescription counts and Member counts, the fees paid to PBMs by manufacturers, plans and pharmacies, discounts or rebates to and from PBMs.

And then we'd have that information grouped by NDC, by National Drug code, by therapeutic category, so that we could do analysis at that level. Also information grouped by pharmacies owned and not owned by the pharmacy benefit manager. There's concern about the vertical integration. We have health plans owning PBMs, owning pharmacies, and on and on.

And so really, really trying to look under the hood to better understand these PPM costs with this proposal.

Thank you. Keep going.

Okay, I'll take the last one against Scott Crispin. The HKI and Senator Menjevar, to your point. The Administration is withdrawing the budget request for rent adjustment for hci, and the previously planned move has been canceled.

That's our presentation for agenda item one. Thank you, Eliot.

Apologies, the microphone issue there. I forgot to mention that we do have a general recommendation. I think the Committee heard this yesterday about, you know, rejecting without prejudice some of the more policy driven proposals. Just given everything else you have going on in the budget. It's just you're already facing a lot of difficult trade offs.

So just maybe deferring some of those policy issues to a later time.

Thank you. All right, you can move to issue number two, Prop 35 Allocation.

Thank you, Madam Chair. So the May revision includes two Proposition 35 allocations to HCAI, one around MEDI Cal workforce and one around reproductive health support. So the May revision would allocate 90 million of Prop 35 funds in 2025, calendar year 2025 and 2026 to support access to reproductive health services.

These funds would be used emergent needs of the state in providing access to reproductive health services. Emergent needs could include investment in programs that support and expand the reproductive health workforce, prioritizing areas of the state with shortages of reproductive health providers and or facilities.

This could include loan repayment and scholarship programs to support providers working in underserved communities as well as education capacity expansion for midwives Midwives play a vital role in providing reproductive health services, family planning, and maternal health. But California faces a severe lack of midwifery education infrastructure compared to the demand for midwives.

Currently, California has only two certified nurse midwife programs and before March of 2025 had no licensed midwife education programs in the state. In March of this year, hcai, using the remainder of the HCI midwifery funding appropriated in 2022, funded the Creat 2 new licensed midwife programs.

Additional funds could support the expansion of both these midwife programs and we would partner with public and nonprofit institutions to ensure that these programs are located in communities with birth inequities and that are facing midwifery shortages.

Proposition the May revision also proposes well the Proposition 35 allocates $75 million in calendar years 25-26 to support MEDI Cal Workforce Development Program. In addition, there would be 75 million in federal matching funds.

So these funds would be used to support the establishment of LMCC's Labor Management Cooperation Committees focused on strengthening the healthcare workforce and improving access to and quality of care for Medi Cal patients.

So an LMCC is a partnership between employers and labor unions designed to improve relationships, foster collaboration, and address workforce challenges through a model of equal labor management Governance by design, LMCCs are responsive to labor markets, ensuring that upgrading opportunities reflect employer demand.

So example uses of LMCC grant funding include supporting workforce training programs that improve care quality and expand career opportunities, developing apprenticeship and pre apprenticeship programs, funding tuition reimbursement, peer mentorship, funding training organizations, and investing in initiatives that build workforce capacity. So HCAI will be responsible for administering the $75 million in Proposition 35.

Prop 35, as you know, establishes the stakeholder Advisory Committee that provides HCAI guidance on the LMCC program development and implementation in addition to other components of Prop 35 implementation. And those are our Prop 35 components. I'm sorry, LMCC stands for what again. Stands for Labor Management Cooperation Committees.

Anything from lao?

We haven't raised any concerns about the specific proposal. We are still learning, getting more information on the overall Proposition 35 expenditure plan. So that's part of that one.

One point I did want to raise that might be discussing more when we get into the sort of medi Cal budget is that much of the administration's proposed spending plan appears to be somewhat focused on more limited term activities.

And there's some benefit to that given that the Prop 35 rules change in 2027 and also given some of the fiscal uncertainties around the MCO tax focusing on limited term areas, it sort of helps manage some of that uncertainty. Thank you. Thank you, Senator Menjavar.

Director, have we gotten the guidance from the stakeholder on how the LMCC funding and program is going to be pushed out?

HCAI started to talk to some of the stakeholders, but the formal Advisory Committee will hear it, I believe in their July meeting.

Okay. And that's when we'll have more information. I know you'll be leading in the funding. You'll be pushing the funding out, but does it go to. Does it go to unions? Does it go to clinics or who does the funding go to?

So these LMCCs are again collaborations of union groups and employers working together. And so we will be funding those groups.

So it funds for the people to come and have those meetings or what does it.

There are existing initiatives to provide workforce support, mentorship, apprenticeship and other programs. You mentioned tuition.

Is it going to go into some of the programs that HCI already has for tuition, just feed into that or create new kind of tuition repayment programs?

It would Fund new programs based on this LMCC cooperative arrangement. Ms. Abbott, do you want to add anything?

Yeah, I would just add and we have more that we can share. We're also learning. LMCCs are new to us, but we would be funding the establishment of these new committees.

And the committees are comprised of both Employers and UN so while the types of programs might look like a program we already implement, like a loan repayment or a scholarship, they would only be available to Members of those unions and that Committee.

And so we'd be working to set up the infrastructure and some of the funds could be used to seed the activities such as the tuition payments and loaner payment. But the idea of an LMCC is that it's self sustaining by using Member dues as well as employer contributions. So we would be a part of the funding.

Thank you so much for the clarification on the first part of the 90 million. You know we're going to be later talking about Prop 56 and the 504 million cut there. These activities that are being funded for that, are those the same activities that fall under Prop 56? I know those are more provider rate driven.

No, we understand these are somewhat different. The Prop 56 areas are more are actual provider supplemental payments. And we understand these are sort of more workforce development focused. So they're similar kind of domain focused on women's health and family planning. But the this one's more workforce rather than Prop 56 more provider rate.

So this getting more people to work in this space. Yeah, I would defer to the Administration and kind of what they intend for the goals to be in terms of the.

And Director, if you can also answer in Prop 35, was the $90 million specific to this or was this flexible in what we can utilize?

My understanding of the 90 million for reproductive health in Prop 35 is it's flexible specifically to support access to reproductive healthcare services. And our assessment is that one of the important emergent needs is around a workforce, particularly in medically underserved areas.

Okay, so is a. The intent is to get more people into this. Into this space, Right?

Correct.

And for. I'm really happy on the midwifery. That's a topic that's been talked about in the women's Caucus a lot and I know you touched on it a little bit. Is this to help people have create more of those education programs across California?

Because there's only two, Correct? Yeah. So we don't have the educational capacity we need for midwives. So it's both to support the educational training programs as well as the individuals to go through the programs. Feel free to add if you want.

I would just add that we through external data reports and analyses we're seeing an increasing interest in utilizing midwives and we know it's an important solution as part of access to maternity care. So yes, we Would like to increase education capacity to make sure we're training enough midwives in California to meet that demand.

And the second piece of that is if we had funding for education capacity expansion, I think we'd work with our public institution partners, CSUs, et cetera, to try to locate the programs where there is the greatest need. Because there's also an important sort of labor market component.

The 90 million is that, does that funding end in 26?

Yeah, there's 90 million. Well, I'll defer to my Department of Finance colleagues.

So there's 90 million in calendars year 25 and 26. And then as part of Proposition 35, it changes to a formula base. So there'll be additional funding. But I'd have to defer to my DHCS colleagues for the specifics on that.

Yeah, and so there are new rules beginning in 2027, and so we understand that the Administration doesn't have a longer term plan beginning in 2027. That's because there are new rules and also because of the fiscal uncertainties around the MCO tax. But the rules in 2027 are a bit different and they're a little more specific.

So exactly how that would look is uncertain.

I just don't want to be in a situation where similar situations. A lot of programs are up and running for a year, two years, and then they get cut midway. I just don't want, you know, our investment into really great programs to then come back in two years.

Like will we have to cut people out of the program? We can't continue even though we invested in it. That's, that's what I want to think about.

So for the 75 million for the Medi Cal workforce development from Prop 35, that is specific to workforce development, correct? Yes, Madam Chair. And there's a federal match, you said, with that? Yes. 50. 50.

We'll have to get clarification on those numbers. I know, like we noted in the, in the agenda, that Department of Healthcare Services coming. Coming up later in the agenda that they'll have more details, but otherwise we can make sure we can clarify that. State funds.

So if we have Proposition 5 funding specifically for workforce development, which would include expansion of a midwifery program, why are we taking the reproductive health services funding and using it for that instead of actually providing it for reproductive health services for patients?

The proposal from the Administration is open ended as we have the conversation with the Legislature. Madam Chair. So as noted, it's $90 million for reproductive health for emergent needs. This is one emergent need. That the Administration has identified.

So as of right now, we are dealing with a situation at the Federal Government level where they are actively attacking the ability for people to have access to reproductive health services. And yet we have $90 million for emergencies.

And instead of using that to actually provide reproductive health services on the ground, the thought process is to take it to establish expansion for midwifery and scholarships, which this money is only good potentially for a year or two.

So I don't see how we would establish or expand midwifery programs with a year or two funding, however, especially since we have Medi Cal Workforce Development Fund.

So instead of actually dealing with an actual emergency that's happening and using it to ensure that patients will still be able to get reproductive health services, now we just decided not to do that. That's the thought process behind it. I'm completely confused.

Again, this is the administration's proposal and we appreciate having the conversation. Under Proposition 35, there are some limits on. There's a non supplementation clause that perhaps Louisiana or Department of Finance can address more specifically, but there are limits on using it, on using the Proposition 35 funds.

So are you saying, is anyone here saying that with this $90 million that is aided for reproductive health services, that this $90 million could not actually go back and help repay providers and clinics for providing reproductive health services?

Joseph Donaldson, Department of Finance as kind of noted earlier that with this 90 million, there's, there are restrictions to the things that can go through due to the limits of non supplication of the funds.

As we noted that the administration's proposal includes funding for programs such as expanding midwifery because these are new investments that the state hasn't done. So not only would we be considering these proposals, but as part of the stakeholder engagement process, we'd be reviewing other avenues we could also invest in. We just included.

This is an area we saw as an unmet need need. So as we kind of noted that this is an ongoing discussion that there's areas that the Legislature is interested in investing in, willing to collaborate and partner with, but in terms of various investments that directly related to provider rates that would violate certain restrictions of non supplementation.

I know our DHCS colleagues will be going to more in depth with that later on, but that is unfortunately just some of the parameters of this funding.

Okay, so I just want to be clear.

You're stating that this $90 million that was slated in Prop 35 for emergent reproductive health services cannot be used to help deal with the real emergency that people are Facing now in terms of their reproductive health services being slashed and clinics closing and providers not being reimbursed, that this 90 million cannot be used for that.

Based on kind of the structure of funding, the funding going to reimbursement rates that would violate the non supplementation rule. So that wouldn't be possible with this funding.

Okay, you were going to. Yeah. I just wanted to emphasize. And we might have an opportunity to dig into this more on the DHCS side to understand the administration's sort of thinking here. The rules in Proposition 35 in the first two years, they are somewhat broader.

And this does seem like a policy decision about how to spend the funds. Do you spend it on provider rates or workforce initiatives? I think a key sort of consideration here is the sort of uncertainty about the MCO tax in the future. And the workforce initiatives, if implemented in a certain way, can be somewhat more limited term.

You're sort of providing a limited set of scholarships and loan repayments that maybe could translate to sort of longer term gains if it improves sort of the workforce. That's uncertain. But that could be a sort of a goal of that.

If you put it in provider rates that are more ongoing and then the MCO tax is fundamentally different in the future, that could raise some challenges on the Medi Cal side. So those seem to be some of the core policy trade offs when we're thinking about this.

The Administration also is proposing reductions to some rates that are part of Proposition 56. We'll be talking about that more in the agenda later. And so that also could be where the Administration brought up the non supplanting issue. That could be where some of that is potentially triggered too. So I think that might be what they're saying.

Okay, Senator Grove. Thank you, Madam Chair. So I have the similar same questions, not so much on the allocation for Planned Parenthood, but I guess my question is that there's about $1.0 billion taken from the MCO tax. The money's being taken and it should have gone to provider rate increases.

That was the premise of the ballot measure, that we could provide a higher rate increase for providers, doctors, individuals that provide healthcare services to our communities, the State of California. And I want to question and get more clear on the $90 million that's going to.

These will be direct payments to like somebody who goes to an extended education program. You'll just pay them to do that. Is that what it is?

Be a little bit more clear on what it is. Sure. And we would propose, and this is not firm yet, you know, we would have to work with the Elden, you see, Stakeholder Advisory Committee and take input. But some of the ideas are scholarships and loan repayment which are direct to individual payments.

The other which Director Landsberg spoke about is the midwifery education capacity expansion. Those are payments that go to an institution. So for example, CSU Fullerton currently operates a certified nurse midwife program.

We would be offering them funding to expand the number of slots that they offer for that addition educational program so that as Jason from Lao described, we can have sort of the long term output of the expanded workforce.

Okay, so I guess my question is that who made the decision that it wouldn't go to provider rate increases? Because my understanding is that, you know, of course I don't support what Planned Parenthood does on the abortion side, but they're a provider of health care services and reproductive rights.

And so is the Medi Cal or the Doctor who receives Medi Cal payments from the state that provides for nosebleeds, cardiac care. Whatever it is, whatever it is, all of those rates across the board, a lot of them would have been increased with this 75 million and the 90 million.

Why are they not being increased across the board? And why are we focusing on just these two specific things for additional dollars when in the bulk overall dollars, they would get the same increases or increases as well. They wouldn't be excluded from the provider or would they? Would Planned Parenthood be excluded from the provider rate increases?

So Senator, I believe that later DHCS is going to go through the Prop 35 decisions about provider rate increases and the Prop 56 decisions about provider rate increases. The 75 million for workforce in Proposition 35 is set aside specifically as $75 million for MEDI Cal workforce. So it's not taking away from provider fees.

And then there's 90 million for reproductive health which because of the non supplementation can't go to provider increases, is my understanding.

Okay, so, but again, so then $90 million going back to the $90 million that's going to be loan repayments and scholarships versus direct provider payments.

The 90 million is for emergent needs. For reproductive health, including the possibility of supporting increased midwifery. Yes, as opposed to provider increases.

So is Planned Parenthood included in the rate increases that we'll hear later? I mean, you wouldn't know that, I guess. Okay, skip that question.

I'm just curious if they're going to double dip or why are we not treating everybody the same whether somebody's providing cardiac care, whether somebody's buying obgyn services or somebody's providing abortion and Reproductive Health Care Services. If we're going to do rate increases, let's make it equal. Like equal representation for taxation. Right.

The people of the State of California is to going spoke they wanted providers to get that. I'm sure they didn't say they wanted it all to go to Planned Parenthood, but they're a provider too. I get that in the State of California, but I just don't think that, you know, using this.

It doesn't make any sense to me. I guess I'm falling in line with the chair to try to understand why you give out somebody a certificate to go to a class, but you don't provide provider rates that are not available now for any position.

Yeah. HCAI is not in a position to address the provider rate increase issue. I believe that's on your agenda for dhcs.

Thank you. Sorry. No, that's fine. Before I go to Senator Mentobar, just one more thing. On the issue of supplementing. The reason why that's an issue is because we're taking away funds and. Well, there's a proposal to take away funds in Prop 56, correct?

That is correct.

So if we didn't do that, then we would be able to use this $90 million for actual patient care because we would not be supplementing any payments because we would not have taken away any payments. Correct.

I would have to get further clarity on that.

It seems like we caused the problem. I don't want to say we, but the May revision caused the problem by suggesting to remove Prop 56 funds. And therefore if you add any more than there is supplement, therefore you can't use the $90 million for actual patient and provider care on the ground. Senator Menshevar, thank you.

That was a good question, Madam Chair. So Department of Finance. Because Prop 35 had language in it that said $90 million cannot be used for supplementation. It can only use for new funds. The Administration came together and said these are the things that we've never done before.

It would qualify and not violate the clause that it was in Prop 35. So there is flexibility in negotiation to say we want to invest in something different that won't violate this clause. Is that correct so far?

That is correct, yes.

Okay. Is there an ability because we don't. We can't supplement. And the to the chair's point is, you know, we, the Administration put us in a situation that would cause us to violate and supplement because we are proposing cuts.

Is there a creative way that we can do grants or so forth that can be distributed to providers across California that are going to be cut and propose funding decreases. That doesn't violate the supplementation. But it's a brand new grant. We've never done this before. Can we distribute funds in that way? Hypothetically speaking, is that scenario allowed?

I believe in that hypothetical it could be plausible. I would note that we noted that with this funding it's going to be informed by the stakeholder process. When we've noted that possibility of midwifery, that's because like you noted, is a new investment. It doesn't have a violation.

So if there's other avenues or proposals that would come out of that stakeholder engagement that doesn't violate that non supplementation issue, that would be a viable option.

So the $90 million is also can only be determined by the stakeholder. The Legislature has no say in how the $90 million can be distributed.

I would just add that the stakeholder Advisory Committee includes Members appointed by the Legislature and they would help inform any spending of the Proposition.

The conversation can only happen there on these dollars is what you're saying. That's my understanding, yeah.

I mean the Advisory Committee is advisory and then DHCs, the Administration will take that input and decide how to use the funds.

The measure gives the Department of Healthcare Services broad authority to implement the measure, including determining how to structure the rates. They do have to get stakeholder consultation, but that is an Advisory Committee. The Department decide sort of how to structure the payments for the Legislature.

The core focus here is exactly what the Committee's doing, which is to provide oversight, dig in to understand the goals and there is some interaction. You know, some parts of Proposition 35 help offset General Fund spending and the Legislature determines how much General Fund amount to provide medi Cal. So there is some legislative role there as well.

I'd like to get. I'd love to see the possibility of utilizing being creative and bringing down $90 million directly to our providers to continue direct services. I recognize these are amazing programs and definitely we should invest in them, but at the cost of cutting other services, it's really hard to make that decision.

So if we can utilize $90 million and be creative to create a brand new program that supplements without supplementing the funds that we're cutting, that would help to solve a problem Nowhere near the 504 million that's being proposed for cut. But it does get us closer.

Or if we didn't cut, we wouldn't need. We wouldn't have this issue. Thank you so much. We will now move to the third issue. General Fund solution and technical adjustments.

Thank you, Madam Chair. I'll take that. The 202425 state budget included a one year deferral of $50 million which was initially appropriated to the CALRX program for a California based insulin manufacturing facility.

The May revision proposes to redirect 5 million of these funds to support Calrex initiatives for public health priority drugs that are at risk of market failure. And the remaining $45 million of the CalRx in state insulin manufacturing funding is proposed to be reverted as a solution to solve for the 25-26 budget deficit and then a technical adjustment.

Technical proposal represents minor adjustments to the requested amounts from hospital building Fund for Governor's Budget based on revised estimates for implementation costs. The three chapter bills, including AB 869, SB 1382 and SB 1447.

Anything from Lao similar to the other items. We haven't raised concerns with this proposal and some information is still forthcoming. We did want to note for the Committee that it's our understanding that there continues to be a discretionary proposal also in HCI's budget or the Diaper Action Initiative.

And that's also something the Committee could explore, sort of, given the evolving budget situation about where that falls on its budget priorities.

Anything from Department of Finance?

Nothing further to add.

Yes, Senator, could you share a little bit more about the program related to our Butyl that's going to go into. Sure.

I'll start and then turn it over to Ms. Estes. I mean, it's one of kind of a target list that we've been evaluating over the last year for public health priority drugs. So it certainly is something that we see as a great potential for California.

But I'll defer to MTHESTIS to share a little bit more about that process.

Yeah, absolutely. So this model would follow the same successful model as our Calorex Naloxone access initiative. So we would identify a target drug, Albuterol is one of our top priorities, and release a request for information to identify manufacturing partners capable of producing that drug at a single low transparent price as required under the CALORAC statute.

And just like the previous program, it would be then distributed to communities or how would it get down?

The Albuterol Initiative, specifically, we're looking at partnering with the California Department of Public Health for distribution to schools in partnership with their Office of School Health Team and their pending standing order for albuterol. But we are also going to include in that RFI a more broad question about General market access as well. Okay, thank you.

I Actually wanted to ask kind of like a follow up question about the diaper access program that was proposed in the Governor Governor's January budget. Do we have any more information around how that would work, where it would go?

Not a lot of additional information. Senator. We did present the proposal. We've had conversations with hospitals, we've had conversations with the diaper banks. We have released an RFI to start to get input from potential partners for that. Is there anything you want to add, Emily?

No, we're still looking at a bunch of different distribution models through the RFI process.

Okay, and how much is that funding again?

It was I believe, 7.5 million in 2526 and 12.5 in 26-27.

And was that ongoing after that or just.

It was limited term? Just for those two years. All right, so I'm. Sounds good.

Senator Minshewer, thank you for reminding us, ma' am. Chair, on this issue, it flagged. We talked about limiting it to income. And in a time where we're scraping dollars, we're going to give out free diapers to people who make $200,000, $250,000 annually. This doesn't make sense for us. What more?

I know you just added a little bit, but what more can you share on limiting the program? The Administration does not have a change in the May revision to change the original proposal, which is a universal program. At this point because we're in another.

I know, not under your program, under your Department. We're wiping out the diaper and wipe distribution that I know most low income communities utilize. It just seems it would make a little bit more sense to Fund those dollars into a program that already exists and is tailored towards low income communities.

Department of Finance versus starting a whole new one that has no income parameters. And basically someone who again makes a really well amount of money yearly is going to be eligible for diapers. Who doesn't need it without parameters there.

It's hard at least for me to vote for a program that I know is great at its core, but needs more guardrails to get it to the people that actually need it.

All right, thank you so much. We will now move to issue number four, trailer Bill Language proposal with CALRX and community health workers.

Thank you, Madam Chair. I'll continue. The May revision proposes to expand the authority of the CalRx program to purchase brand name drugs as well as generics. The change allows the state more flexibility to respond to supply chain disruptions, market manipulations or politically motivated restrictions that could threaten access to essential Medications, including abortion drugs.

Would you like us to move to community health workers? So, current statute requires HCAI to develop a statewide certificate program for community health workers, promotores and tribal representatives. We have proposed trailer Bill language which would remove the obligation for HCAI to develop a statewide certificate program.

The budget act of 2024 reduced nearly all of the original CHW P R workforce initiative budget allocation, eliminating the resources needed for implementing an ongoing statewide certificate program. HCAI conducted extensive stakeholder feedback over the past two years where stakeholders expressed mixed sentiments regarding a statewide certificate's value and potential impact with the stakeholder feedback.

Feedback and the reduction in available funding. Maintaining the current statute would imply a commitment to a certification focused model that can no longer be sustained.

So the revised statute would enable each CHI to administer its remaining one time funds in line with the extensive feedback we've received from stakeholders through our community engagement and in line with our goals of supporting and sustaining this workforce who provide critical services to underserved communities.

Thank you. Anything from Lao Senator Mengelar?

Director, I need just clarification. The certification. Are we. Are we removing a statewide certification?

Are we creating a statewide certification? So we're proposing to remove. So when the original CHW P R initiative, which was proposed a number of years ago, it was initially a 350 million proposal and it's just gotten whittled down to this 12 million. So.

So initially the vision was that it would make sense to have a statewide certificate program. And we've heard some stakeholders feel very strongly that we shouldn't be professionalizing the workforce, that it actually could be excluding to some. So there is a certificate required to get medi Cal reimbursement and DHCS has set up those requirements.

But the proposal would remove the requirement for a statewide certificate.

Okay. And because I know under BHConnect we have some funding for like repayment of CHW certification and so forth, I just want to make sure we have that. And we're not removing the certification. And what's the point of the funding?

So under BHConnect, we have a couple of sources that could be applied to CHW P rs. The biggest is what's called the Community Based Provider Training Program, which will provide funding on a per capita basis to the organizations that train and support employment of CHW P R.

So that will help kind of like develop and expand that workforce. CHW P RS are also technically, I think we talked about this at the last hearing, eligible for loan repayment and scholarship. Although a very small share of CHW P R is trained through formal education systems. So that's less likely.

That would be separate from what was proposed here in 22, which was to develop a statewide sort of professional certification system. And as Director Landsberg described, we did do pretty extensive stakeholder engagement over the last year and really heard mixed feelings about the potential value of that system.

Stakeholders feel that this workforce can continue to provide critical services and Bill Medi Cal and expand and develop and support our vulnerable communities without that certificate.

This is a 12.0 something million saving. No, 12.7 is what's remaining in investments for CHW p. RS and we're in the process of using those funds to support this work workforce. Got it.

Thank you, Senator Grove. Thank you. Thank you, Madam Chair. I just. I have a question. These are policy issues that you guys are addressing them and they're in a budget trailer Bill. There's a policy process in this building to go to Committee. Is there a reason why this policy.

Okay.

And I know it happens all the time, but I want you to explain it to me again this year why we're doing policy in a budget trailer Bill.

Yes.

Did you want to.

So on the CHW P R that was. It was initially put in trailer Bill Language because it was attached to dollars. And now that those dollars have been taken away, it's basically a cleanup of the CHW P R statute. But Department of Finance may have more to add.

Yes. So on both of the TBO proposals before you. So at the Calorax language, there is a budget nexus, because we heard in the previous proposal there is a proposed reduction of 45 million of existing funds. This language would be related within that budget nexus.

So in our view as an Administration, that is trailer Bill Language as compared to going through the policy route. As the Director noted, With CHWs, there is still existing funding within the budget for this for these workers. And as the Director noted, this is just clarifying the agreements that were made within budget agreements in the past.

So I understand what you're saying, but I mean, every policy Bill goes through appropriations. It's voted on by the Members of that Committee, and then it's brought to the floor. It goes through a process. There's some type of, you know, public input where they have the opportunity to comment on those bills when there's policy issues.

And it just doesn't make any sense to me why I would still go through a budget trailer Bill process. But thanks for your explanation.

All right, Seeing no further questions. Want to thank you so much for your presentation. We will now move to the California Department of Public Health, starting with the AIDS Drug Assistance Program. Estimate.

Yeah, I should.

Members of the Subcommitee, my name is Joseph Lagrama, branch chief of the ADAP branch and I'm glad to provide you an overview of the changes to the ADAP estimate for 2425. The Office of AIDS estimates the ADAP Budget Authority need will be $356.3 million due to lower medication and insurance Prem expenditures than previously estimated.

241.1 million from the ADAP Rebate Fund and 115.2 million from the Federal trust. Excuse me, from the Federal Trust Fund. For 25-26 the Office of AIDS estimates the ADAP budget authority need will be $411.7 million due to lower medication and insurance premium expenditures than previously estimated.

That is $301.4 million from the ADAP rebate Fund and $110.3 million from the federal Trust Fund. I'm happy to answer any questions.

Anything from lao.

Will Owens with the Legislative Analyst's Office. Nothing bad at this time, but available for questions. Senator Menjivar.

Department of Finance. Can you talk to me about, the January estimates were really way off. We went from an increase to a reduction approximately 50 million if I'm reading this correctly.

Hi, Christine Sherman Young, Department of Finance. So the estimate does fluctuate at GB and. Mr. And that typically reflects changes in caseload. There are changes in reimbursement rates. And then as you know, we also had the a number of additional programs that were approved in the last budget for adap.

So those are a number of factors that contributed to the fluctuations. And my colleagues at CDC can expand further on some of those factors.

But those programs were approved last year. Wouldn't we have had those estimates by January already?

So the initial estimates were updated. Again, you know, as I mentioned, those factors that I mentioned continue to fluctuate the pricing, the caseload estimates, and so those also impact those various programs.

So we've taken a total of 900 million so far in the loans. How much is left in the Fund.

Currently there is. So there's a projected ending Fund balance in current year of 293.9 million. Okay.

You probably have heard that across California, various local counties organizations are losing funding and particularly a lot of the HIV prevention funding is ending June 30th of this year because the Federal Government cut it off. We've submitted a modest request of emergency gap funding of $5 million from the Fund. Additionally $70 million for other investments.

So it seems like there should be enough in the Fund to meet the needs of these requests. Correct.

Are you referring to requests that came in after the estimate was finalized? Yes, yes.

I want to say less, maybe a couple weeks ago. The 5 million request specifically just because of the HIV prevention services that are going to be coming to an end.

Okay. Yeah. I'm not familiar with the. All of the details and the numbers of all the requests that came in from stakeholders after the estimate was completed, but we were concerned about being able. To. Include those in the estimate at this late time.

I think the total request is $75 million, and it looks like we have 293 million left over. And 5 million specifically. It's being championed by the LGBTQ Caucus just because it's literally just to address one month's worth of funding.

I'm sorry, it ends this May, I believe, at the end of this month, because the Federal Government cut all that funding and I think it's impacting 22 counties in the state, and they're going to stop providing that service. So it's very modest, small request for two out of the 293.

So I'd love, as we continue these conversations in the next compact three weeks, that should be a request that should go through as the Fund is utilized for that, not just to continue backfilling the General Fund. And then the payback language indicates that the Administration will pay back the money when there is no need for.

When there is a need for funding. Right. And since we're seeing these local cuts across California, would it indicate that there is a need for funding or would you say that there's enough funding in the Fund to continue investing into these other programs?

We would need to consult internally within the Administration to understand the program needs before determining whether we would tap into that provision of the Budget Act.

Okay. Just. I mean, that's the premise behind this Fund. To offset a lot of we're seeing these cuts. I think we should see a reinvestment into. Into our communities.

I would like to see a reinvestment into the community because just if the Administration thinks that this doesn't trigger a payback, that would mean that there's enough money in the Fund and then that we would be able to invest in that.

If the Administration does determine that there's a need for payback, then we would like to see a spend down or payback plan into the Fund.

Okay.

All right. Seeing no further questions, we will now move to issue number two, Genetic Disease Screening Program estimate.

And Senators, I'm Leslie Gaffney with the Center for Family Health presenting for Genetic Disease Screening Program. We have Minor changes for GDSP's estimate, most are attributed to changes in the projection of the number of live births. For current year, we are increasing the caseload number by just under 4,500 to 400,4023.

This increase in caseload leads to an increase of $966,000 in expenditures, bringing the total to 51.7 million. For budget year, we've decreased the caseload by just over 19 to 402,104.

The savings from the decrease in caseload is offset by continued increases in caseload, laboratory kits, consumables, supplies and increased fixed contract costs for our newborn screening laboratories and our follow up centers. So the May Revision has a 1.3% increase in expenditures for newborn screening of $687,000, bringing the total to 53.4 million.

For our prenatal screening program in the current year, we are projecting a decrease of just under 600 cases of CFDNA specimens, bringing the caseload to 200 to 473,000 with a corresponding decrease in expenditures of 183,000 for a total of 38.6 million.

And in budget year, we are projecting a decrease of just under 1,000 cases of CFDNA specimens for a caseload of 200,000. 911 has a corresponding decrease in expenses expenditures of 227,000 for a total of 38.3 million.

The slight decrease is attributed to adjustments based on the state projection of live births, as well as a continued small decline in state participation in our CFDNA program. Happy to take any questions.

Anything from Lao. So what is the current caseload of uptake for the prenatal screening program of those who are pregnant?

Zero, it's about 50%.

Okay, so the estimate of 50% for next year and the year after that is just in line with what.

Yeah, if the decline is like a 0.2 it's very small and it's much more affected by the fluctuate in the birth rate than the decline in participation. We continue to work to market our program because when we lost exclusivity, there's a very robust marketing effort by the private companies. So we continue to work on that.

So what is it that you think the private companies have that we don't? Is it more access to different clinics to actually get, I mean, labs to get the prenatal screening done?

It's access to Clinicians. Some of it is access to. To networks. A laboratory Network is the HMO's preferred laboratory. And so people just get directed there as more things are offered and are advertised to be. We can test for all of these other things that our program doesn't test for because they're not.

They don't have the positive protective value that we want, but they're bright and shiny and they're marketed as such. And people think, zero, more is better. And so they're getting steered in that direction, not really understanding the science behind it.

So would you say that the 50% of patients that are choosing the state's prenatal screening program don't have access to the other ones or.

No, because Medi Cal will pay for the other ones as well. I just think it's in certain pockets that certain HMOs or certain doctors are steering.

You know, I don't want to name laboratories out loud, but there are certain lab networks that are pulling people into their private screening because that's the lab I go to for a CBC or any other blood work. And so it's kind of getting directed in that direction, going in that direction.

And finance, what is the cost for our prenatal screening program for just the program as a whole? I don't have those dollars in front of me at the moment, but I can get back to you with that number.

Okay, thank you. All right, so we will move to the next issue. Women, Infant and Children Program estimate. Thank you so much.

Good morning. Fariha Choudhary, WIC Division Director. Can you guys hear me? zero, there we go. Good morning for EHO3. WIC Division Director. I'm here to provide an overview of WIC caseload and expenditure changes. Let's first start with expenditures.

There are no projected changes to administrative costs for local assistance or state operations, with the estimate remaining at around $71 million for state operations and around $342 million for local expenditures. The primary changes in Revision are with WIC's food expenditures, which is now an estimated $1.1 billion.

There is a decrease of $20.4 million, or a 1.9% change from what was projected in the January budget. This decrease is Estimated food expense is driven by estimated food expenditures is driven by a projected easing in inflation and a slower rate of participation growth.

Slower participation growth means fewer cans of Wiccan formula purchased per infant, which means less revenue going into our rebate Fund to pay for our overall food costs. And lastly, in terms of caseload, our May revision estimate assumes an average of 1,013,240 monthly WIC participants. This would be a decrease of 1.8% compared to the January budget.

However, These latest projections are still an increase from projected participation in state fiscal year 2425 and actual monthly average participation of about 988,000 in 23 and 24. So WIC participation continues to grow, however at a slower pace than initially projected last November. Thank you.

Any further comments from Lio Senator Mentavar.

But we're going to be seeing a decrease of WIC Participants in the 25-26.

A slower rate of increase. So it's slower than what we had projected in January. But from 23 and 24 it would still be an increase.

How do you get to these assumptions of how WIC participation will grow or decrease?

We project based on what's happening right now from the past six months. So it's actually been pretty stable right now. But based on what we project and see in the last six to 12 months is how we can project increases going forward. Thanks.

Okay. We can now move to the next issue item. Budget Change Proposals May Revision.

Madam Chair, Members, Brandon Nunes. I'm the Chief Deputy for Operations here at the Department with issue number four. There's roughly about 15 different May revision proposals that I've been asked to provide a high level for. If you like, I can run through those really quickly and then take any questions you might have.

So the first proposal is a BCP to implement Budget health or, sorry, Behavioral Health Services act preparation. So CDPH is requesting 7.4 million from the Behavioral Health Services Act Fund for fiscal year 25-26.

And this funding is going to support the planning and implementation of population level prevention funding and critical behavioral health initiatives under the Behavioral Health Services Act. And it will help us establish a foundational infrastructure and capacity for BHSA implementation and support long term progress in transforming behavioral health in California.

The second BCP that we have is related to our CALCIS reappropriation. We're requesting to reappropriate 2.5 million from the Opioid Settlement Fund from the 2022 Budget act into 25-26.

This will support the launch of the California Syndromic Surveillance Program to track early symptoms data on opioid overdoses and other public health threat in our Center for Health Care Quality. There's a few proposals there. The first one relates to acute psychiatric hospital investigations.

We're requesting five positions and $1 million from the State Department of Public Health Licensing and Certification Program Fund. This will be in 25-26 and ongoing and it will help support the investigation of complaints in acute psychiatric hospitals.

And it's going to help address the growing number of complaints that we're seeing in those facilities and enhance the capacity to perform relicensure workload and hold facilities account for deficiencies. Also in Center for Healthcare Quality we have an operational support budget change proposal.

We're requesting eight positions and one and a half million from that same special Fund for 25-26 and ongoing and this is going to help support CHCQ's operations. It'll help improve data reporting and visualization capacities or capabilities and enhance medical breach investigations and business operations support.

And finally in Center for Healthcare Quality we have a proposal related to generative Artificial intelligence, a contract request for $8 million from our internal departmental quality improvement account in 25-26 and this is going to support a minimum viable product for GENAI contracts. This will enhance the efficiency and accuracy of healthcare facility inspections.

It's going to help our health facility evaluator nurses streamline the survey process and reduce the administrative burden on our surveyors. And it's going to also improve the quality and consistency of inspection reports. Over in our Center for Environmental Health we have a proposal related to industrial hemp compliance.

We're requesting $758,000 in General Fund for fiscal year 25-26 to conduct compliance enforcement of the manufacturing and distribution of industrial hemp products. And this is mandated of course by Assembly Bill 45 and Emergency Regulations that were developed. In our lab Sciences center we have a wastewater surveillance expansion for infectious diseases.

We're requesting 3.2 million in General Fund for fiscal year 25-26 to secure a wastewater surveillance program in all regions of California. This program monitors infectious pathogens and provides early detection of disease outbreaks. It'll help expand water surveillance wastewater rather surveillance to cover 70% of the state population and enhance public health response to emerging infectious diseases.

For some of our IT systems that we've been discussing, we have a proposal in the May revision for maintenance and operations for the California Vaccine Management System. The May revision includes 31.5 million General Fund one time to support maintenance and operations for MyCalvax.

And as you know, MyCalvax is a comprehensive vaccine management system that includes functionalities for vaccine ordering, inventory management and data reporting. We have a reappropriation of funds in our Office of Health Equity in the next proposal, the Transgender Wellness and Equity reappropriation.

And we're requesting to reappropriate a total of $7.2 million into 25-26 and this funding will support existing gender health equity programs, grant agreements and contracts related to Trans Inclusive Health Care for individuals who identify as transgender, gender, non conforming or intersex.

And then finally, in our Center for Health Statistics and Informatics, we have a request for vital records staffing resources.

We're requesting 2.4 million from a special Fund in that program, the Health Statistics Special Fund for 25-26 through 27-28, and this will help reduce processing times for vital records requests from seven to nine weeks to approximately two and improve customer service and efficiency in handling vital records.

And then the last proposals we have are five different proposals related to legislation that passed SB 1511 related to anti fraud data files.

We're requesting 492 again from that Health Statistics Special Fund in fiscal years 25-26 and 67 to implement and operate the provisions of Senate Bill 1511, which expands the list of entities eligible to receive death data indices and files for fraud prevention. AB 1859 we have our proposal for that.

We're requesting one position and $288,000 in 25-26 and 200,000 ongoing for General Fund to support posting information to the California Overdose Surveillance Dashboard as required by AB 1859 and just a few more. SB957.

Rather, we have a proposal for that to request three positions and 538,000 from the General Fund in 2520 and ongoing to implement SB 957, which requires us to collect voluntary self identification information pertaining to sexual orientation, gender identity and various variations in sex Characteristics. Intersex status.

SB 1076 we have a proposal for that requesting eight positions and one and a half million from the State Department of Public Health Licensing and certification Fund for 25-26 and ongoing. And the $1.5 million will be used to improve data reporting and visualization capabilities and enhance medical breach investigations and business operations support.

And then finally, sorry for issue number 15, the last issue, AB3161. We're requesting 1.1 million in 25-26 to support the implementation of AB3161, and it requires specific healthcare facilities to update their reporting systems for patient safety events, to include a process for anonymous reporting and address racism and discrimination.

And those are the proposals that we have in front of you for May revision.

Thank you. Any comments from lao?

Yes, Will Owens with the Legislative Analyst Office. So as your agenda notes and as my colleague mentioned earlier, a number of these proposals, we're still waiting for additional information to be released by the Administration.

And at that time we'll review and reach out to the Committee with any questions or concerns that we may raise at that time One of the proposals in particular just wanted to flag for the Genai contract under cdph. So this is one of a number of Gen AI programs proposed by the Administration.

While not specific to this project in particular, our office has recently released a report on the IT product development life cycle and kind of the new proposal kind of moving forward with these Gen AI projects.

And consistent with the recommendations in that proposal, we would just note that more legislative oversight is needed in the state's just Gen AI project approach overall. And we're available to work with the Committee and the Legislature more broadly in kind of developing some of those mechanisms for oversight.

Thank you.

Thank you. Anything from the Department of Finance?

Riley Thompson, Department of Finance. Nothing to add at this time, Senator Manjivar.

Chief Deputy. A couple of programs you went through, so bear with me. I know. Absolutely. Yep. Starting with the reappropriation of the 2.5 million from the opioid settlement Fund. It was re. It was appropriate in 2022. Maybe it should start with Department of Finance. What was the 2.5 million appropriated for?

Sorry, we were swapping seats. Could you repeat what proposal this is related to? Thank you.

So for the California syndromic surveillance reappropriation, it was from 2022 of 2.5 million. In 2022, what was the $2.5 million appropriate for that? Went unspent.

So the reappropriation is to help launch the syndromic surveillance program as well as.

I know what it's being used for. It's being re appropriated from an appropriation in 2022. So where is it come. What is it being pulled out of? It's coming from the overdose public. Let me rephrase. I know it's coming out of the Fund, but in 2022 it was appropriated for what was it always for this program.

Okay, thank you. That's what I want to know. Since it's reappropriate, I just want to know if it was coming from a different program to come into this.

No, it was always for the calcist program.

Okay. And then Chief Deputy, do you have any more information on the emergency regulations for the psych hospitals? What's going to be in those regulations?

There's no trailer bill Language. We can send you that information. We have a list of what is on the docket for that.

Can you share a little bit more about it, please, please?

I can ask our. Yeah, we'll ask our Center for healthcare Quality Deputy to come up and provide a little info on that. Mandy or Chelsea, you want to come up?

Just go ahead right there.

I'm sorry, could you repeat the question? Could you share a little bit more of what's going. What's going into the emergency regulations for the psych hospitals?

The primary focus of the regulations is to establish the minimum nurse to patient ratios that are needed for acute psychiatric hospitals.

Is that the entire regulation?

That is the primary focus because that's something that has been lacking. We are doing stakeholder engagement meetings to talk about additional items that may need to be addressed as well as part of the emergency package. And. And so once we gather additional information, we'll have more.

What's in the trailer Bill Language of what we're going to be voting on.

Just authority. Yeah, it's just nothing in there. Just the authority to create it.

The authority for. Yes, to create the emergency regulations.

When do we anticipate them to be completed?

It depends on how the development goes. We are hoping to have regulations in place by. Within. Probably, I'll say around January. Okay.

Yeah.

Thank you for that. On the, regarding additional funding for AB45 for the hemp. I know we needed additional funding because there's insufficient revenue to cover the program activities. So do we anticipate ongoing insufficient revenue in this Fund?

That is a challenge that we recognize in both cannabis and hemp that enforcement activities are not generating enough revenue. So that is a longer term issue that we're looking into.

Okay.

Can you share, Chief Deputy, a little bit more on the sustaining wastewater surveillance for infectious disease? This wasn't in the original January budget. What happened in between that time that notified us that we need to invest in this area.

Zero, go ahead. Yeah.

So I think it's to continue the wastewater surveillance. We had some private entities that were covering some of the sites and they are no longer covering the sites. So that in order to make sure we have wastewater surveillance throughout the state, this will allow us to cover those sites.

It will also allow us to look at specific items in the wastewater that we want to do in California that might be beyond what the Federal Government will allow with the rest of the funding.

Thank you. And Department of Finance on the transgender Wellness and equity reappropriation. The 7.2 million, was that previously allocated? Is this a clawback or money that was never distributed?

So this is a reappropriation from funding that was previously allocated in the 2022 bud. So it was previously allocated. Now it is being re appropriated. It was unspent funding. Unspent.

Were any of those dollars earmarked for any existing gender equity programs?

The Department can let me know if they have additional comments. But my understanding is that we are continuing to support existing programs and contracts and grants. So this is to support existing programs that were previously supported with the original dollars.

So, Chief Deputy, this is funding that.

Never went out where contracts are in place and have been developed, but they're into the 2526 fiscal year. So we need the reappropriation item in order to fulfill. That's what you mean. Okay, thank you.

Just continuing that. Correct. And then I'm looking at it. Thank you. Senator Grove.

Thank you, Madam Chair. I just want to address just one issue and say thank you for.

Because I have one of these hospitals in my district, the psych hospitals, and I just want to thank you for maintaining that funding or increasing it a little because we do have some serious issues and I'm hoping that this money will be used to address the issues.

So, I mean, I've heard horror stories, you know, dummies slip and slide, you know, where they soap up the hallways and throw people down the hallways. These things are completely unacceptable. And so if this money is going to go to address staff oversight, and that quote was from somebody giving me the call of the name.

I do not think anybody in that capacity is in, you know, should be regarded by that. But I just wanted to make sure that you understand that you, that I let you know that I appreciate the increase in funding to make sure that we can make sure those facilities and that abuse stops.

Thank you. So I wanted to get a little bit more information on what's going on with AB45. The initial expectation was that the licensure fees would become self sustaining. But now you're coming back asking for more funds from the General Fund. Can you explain what is going on there?

Why the licensure fees are not covering what is needed for enforcement? Is it that people aren't becoming licensed? Is it that it's not enough money? What's going on?

There haven't been as many licenses as projected for license applications. And so that's the majority of the issue at the moment. And with pending legislation changes, we. Are. Not certain if the number of licensed providers may actually decrease as well moving forward.

Can you elaborate when you say with pending legislation changes?

There is proposed. There is pending legislation or excuse me, not legislation, but regulations. So my colleague mentioned the emergency regulations that were passed last fall and CDPH is currently in the process of enacting or promulgating those regulations permanently.

And that will result in stricter standards for industrial hemp in terms of the percentage of THC allowed and which will likely take. Decrease the number of providers or retailers.

The number of providers that will actually come and get licensed. Correct. Okay. And so you're having a limited number that are actually being licensed, but an increase in the number of issues requiring more money for enforcement.

The need for funding is that there without those license applications coming in, there's not enough revenue coming in. So even with, even with less activity, there is still funding needed for the activity that is happening. So that's the dilemma.

So to Senator Mengavar's question, this will most likely, if we choose, become an ongoing expense from the General Fund and not necessarily something that over time would be self sustaining, which is what we thought in 2021.

It's something as I mentioned before, that we recognize as a longer term issue that needs to be addressed. We don't have kind of that longer term solution right now, but it is something that we recognize and there was a need in budget year to maintain enforcement.

Okay, did you want to. Just hear to answer questions? Okay, thank you. All right, well that is the end of my questions on that. We can move to issue number five, General Fund solutions and then may review.

Thank you, Madam Chair. Issue number five is related to $31 million, approximately 31 million in reversions in General Fund and expenditure authority.

As finance mentioned in the last group, the reversion, this reversion is going to eliminate unspent funding for various public health programs and they're related to helping address the $12 billion shortfall that the state is currently facing. A vast majority of the. I'll just kind of run through the list that you have there.

But the vast majority of the reductions fall into California Reducing disparities project. Approximately 15.8 million that was appropriated from the 21 budget act is, that was still available through 26 will revert a year early. So there's 15.8 million that's, that's coming out there from California reducing disparities.

Also in Office of Health Equity, there's 4 million that was appropriated to us in the 22 budget act related to increased capacity training and care for LGBTQ foster youth. And that will also be reverting in Office of Health Equity. Overall, there's roughly 9.2 million in workforce development dollars from various fiscal years that are proposed for reversion.

We have about 1.4 million coming from Public Health Workforce Development and engagement, about $840,000 from our public Health Pathways Training Corps microbiologist training funding that we had from the 23 Budget Act. 1.3 million of that will be reverted.

And then from the lab Aspire program, 1.7 million from our 23 and 22 budget acts also had workforce development funding, new dollars proposed in the 25-26 budget of 3.2 million that was in Governor's Budget that is now being removed in May revision as part of the overall workforce development reductions. And then finally some reductions in other areas.

In our Center for Infectious Diseases related to Sexually transmitted disease prevention, $1.0 million is being reverted from the 23 Budget Act, Hep C prevention and HEP C testing kits, about 1.3 million for those programs from the Hospice Fraud Task Force, $1.0 million from the 22 Budget Act.

And then from the Extreme heat action plan, 900,000 from the 22 budget act from that as well.

And then the last issue that you have on this in issue number five, we there was 15.5 million in General Fund expenditure authority that was originally provided to us in the 2019 Budget act that was set to expire at the end of this fiscal year.

That funding will, as is noted in the agenda, will expire at the end of the year. But as we also noted, 7.2 million from the TGI Fund that we were able to reappropriate is moving forward. But these issues are again going to address the $12 billion deficit that the state's facing. Happy to take any questions.

LAO Nothing that available for questions.

Anything else from the Department of Finance? Nothing further to add. Thank you.

Senator Manjar, Department of Finance of the California Reducing disparities project. The 15.8 million being cut, how many how much of that has been awarded to grantees? Deferred to the Department for that?

Yeah. So when we received the appropriation, we originally received 58 million in local assistance funding that was going to, as I mentioned, be able to be spent through the end of next fiscal year. We had 33 million that was being carried into this year. We spent half of that roughly.

So I would say we've spent about 43 of the 58 of the 15.8.

Million that's being pulled back. None of that has been awarded to grantees.

There are potentially contracts in place, but they weren't expected to be actually going out the door until next fiscal year.

Contracts have been in place, but the funding hasn't gone out to the vendors.

I believe that's correct. Yes. Yes.

Okay. So the individuals who have contracts, they're not in the midst of implementing the contract and providing services.

They are currently providing services. And it was the they would be going into the next fiscal Year to do the evaluation of the program. The final year of the contract.

Okay, so they have funding right now to finish the service part, but the funding that's being pulled back is for their ability to do an evaluation of.

The program, continue some of the services, as well as to evaluate. So the funding will halt services in place.

Correct. What kind of impact do we anticipate to these organizations that are providing these services? If there's an abrupt.

Well, it would be eliminating culturally linguistically appropriate mental health services. Zero boy. Communities.

Okay, so we don't want culturally linguistic. Department of Finance. Department of Finance. We don't want culturally linguistic behavioral health in California. What was our justification here? DOF?

So these were difficult decisions that we had to make in order to balance the budget. These funds did have multi year authority. And when looking at our proposals, we looked at what funding that was potentially discretionary.

In looking at these proposals to Department of Finance, you know, we're in this specific category. The CRDP was made for addressing mental health disparities across various minority groups. Right. Underserved population, so forth. Are there. Is the Department, by your standard of cutting this? If we cut this, is the Department meeting its equity goals?

Are there other programs the Department is moving forward that meets equity goals. As we cut these programs, its obligation to address inequity in California, Is it meeting its goal if we cut these programs?

That's a very difficult question to answer. I mean, we were just trying to solve a very difficult budget.

Sure, I hear that. So I hear that part. So you don't think if we cut this, the Department won't be able to meet its equity obligations? Chief Deputy, I know you want to answer, but I mean, Department of Finance, this is their budget. So I'd like to hear from Department of Finance.

If you made this decision, do we have. Are we meeting our equity obligations?

Senator Manjivar, thank you for the question. I would just note that the Department of Public Health, like has a number of programs that focus on equity. I would defer to the Department to speak to those specifically. As my colleague did note, however, we are facing a very difficult budget decision and we did have to make difficult decisions.

And this is one pathway forwards. And we'll continue to work with the Members as we plan for the final budget.

Since you're up here, I mean, we're looking at departments growing exponentially. Position requests here, position requests here, position requests here. Every Department is growing by tens and tens of tens new positions, but services are being cut. I'm just. If we're asking the rest of California to work on a bare bones structure and we're growing.

How is that justifying your proposal or your position that we had to make tough decisions? It seems very lopsided that only tough decisions were made in one area. Or like for services outwards versus inward.

We can certainly take that feedback back. I would speak only to the CDPH budget. I would note that a number of those new positions to your point are special funded and have a particular. Some are, yes. Yeah. Yes, that would be sort of my first comment on that.

I can't speak more broadly to all proposals across the Administration. And again, these are funds that were invested a number of years over several years that remain unspent and this was one of the pathways for that we opted for.

Is it unspent because they were given, hey, you have this amount of money, your contract lasts for three years. Obviously it's going to be unspent because you have to do the services for three years. Correct.

I can't speak to the specific contract nature. I can comment on the multi year authority of the dollars that is in place per previous budget acts.

I can't speak to contracts that the. Department has for the LBQ Women's Health equity funding expiration. This is an expenditure authority to continue the program or to pull it back.

Yes. So for a bit of clarification, as my colleague at the Department noted, that funding was set to expire as of June 30th of this year. So that funding is being allowed to expire. It's not that funding is being cut for budget year, it's just that it was already set to expire.

Are we leaving any dollars on the table once it expires?

So there is unspent funding. Is that the 15.5 million? Yes. So that is the 15.5 million of unspent funding. But again, that funding was set to expire as of June.

So CBOs who were awarded these dollars knew that the funding was going to stop the 30th.

So they were closing down anyways.

Correct? Yes.

I defer to the Department to speak to the activities of the organization. I believe that's correct.

Yeah. Yes, I believe that's correct. That we had planned that the funding was going to be set to expire at the end of the year. So unlike the previous reversion amount we discussed where we had kind of contracts going into subsequent years, this funding was set to expire this year.

Okay, thank you.

Senator Grove. Thank you, Madam Chair. I'm going to dig a little bit deeper on that, so stay Right there, when you said that the contracts, which you said you couldn't speak to the contracts, but somebody could. So the contracts are existing and they're providing services to individuals. And I'm talking about the California Reducing Disparities Project.

They are in the process. How many contracts have been issued and how many contracts are going to stop and what time frame are they going to stop in if it's just the renewal of the year?

And then my third question, all in the same category, is how much investment did these people put in place in order to get set up and ready to go and get the programs ready? And now they're not going to get funded for what in the business world we would call an ROI.

Like they put this investment forward and they have these contracts ready to go to serve these people and now we're stopping that. So what are they losing out of the setup process and their potential not ability to retain their ROI or the return on investment for the programs that they invested in? How many programs start there?

Sorry, there's 33 community grants and nine contracts. And nine contracts. Correct. And when did those community grants expire? Well, they are ending one year early. They were supposed to go through June 30th of 2026.

Okay. And when these 33 grant programs invested in, in the community to give people an opportunity to have, you know, equity in the system, did they calculate out their return on investment over that three years? And now we're ending it a year. Are you leaving them in the hole? That's the basic question they plan.

If you said Center Grove, you have this program, we're going to Fund you for three years. I could stretch that three year return on my investment. Rent a space, get furniture, whatever, hire doctors, hire, you know, community people to engage with different populations or population groups. And then my funding gets cut one year early.

How much on the hook am I in reference to these individuals? And are they going to even be made whole? Just curious.

Well, the belief was that when Prop 1 would be implemented in July 1st of 2026, that there would be, they would be potentially eligible for some of that funding. So this would be create, you know, a gap in terms of funding for this year. How big of a gap? 15 million.

And you're okay with that? You can say no or will you get in trouble? I don't think you're okay with that. In Department of Finance, you're like, there are very difficult positions. I mean, you said that this is a difficult budget year and we have to make difficult decisions.

You just allocated $90 million to Planned Parenthood to give them classes that their staff could go to. And you're not going to allocate $15 million to keep a program going that helps people with mental health services.

Sheriff Cooper's going to blow this place up because, you know, not blow it up, like physically, but on Twitter and Instagram because this diversion program for mental health isn't working. And they had to release somebody that committed murder and killed a human being. And so we have serious issues with mental health in the State of California.

And you're cutting, from my understanding, $15.8 million from an organization, Organizational Groups, with 33 grants that reach different populations, that may struggle in a different way. But you're giving $90 million for Planned Parenthood to individuals to take a class. What difficult decision is that?

As we've noted, we do have a $12 million General Fund deficit. The 90 million that you're referencing does come from a special Fund. And I certainly hear your concerns. And ultimately, what we had to do for purposes of the May revision is work on one approach to fulfilling that gap.

We'll take these comments back and consider a pathway forward. But this was a General Fund investment that we opted to, for the purposes of the May revision, to revert it back, given the deficit.

Okay, but I want to make it very clear that you're cutting funding to 33 grant programs or whatever the number is, that address mental health issues, mental health in communities that need some type of help, getting the same treatment, or at least a percentage of the treatment that is around the state is poor anyways, but at least getting their fair share of the treatment.

So you're cutting that, but you're going to send Planned Parenthood individuals to. And I'm not trying to pick on Planned Parenthood. I don't agree with what they do 90% of the time. But you're going to give them certificates to go to class for 90 minutes. $1.0 million.

Take the $15 million from that and give it to these people to continue the services on mental health that they're using. We're suffering from COVID Our kids are locked. We're locked up for two years. There's definitely a dysfunction that our children are facing that individuals are facing by losing their jobs. They weren't considered essential.

If you go back to the COVID era and then you go where we are two years later and we're still at a low. Public health and mental health services, mental health services are just drastically not providing the care that we need in the State of California.

And you're cutting $15.8 million from people that provide this service to different groups. But you're also on the other side. You're funding. It doesn't make any sense other than politically for these kind of decisions to be made.

And I realize that these people that are working with these small communities can't make political contributions and be in this building every single day because they're just barely being able to try to survive life. That's it. That's what they're doing. They're trying to survive life in the situation that they find themselves in.

And you're cutting their budget that they have been awarded and you have a gap for one year. The Department, I mean, they're not going to say it, but they're clearly not in favor of this. Are these programs working and are there tangible results?

Yes, there are, yes and yes. And they've been evaluated and they are effective in really looking at community find evidence based practices. Right. And so they are culturally appropriate and they're providing behavioral health services.

So they're working. But we're going to spend $90 million on Planned Parenthood, somebody to go get a certificate at college for a, I don't know, arts degree. Who knows? I'm being serious. I know you think I'm just jacking with you, but I'm not. I'm being serious. This is a serious issue. Who thought of that?

Like I said last year when they started cutting DDS funding, who was the person in that room that took the white or the yellow sticky note and put it up on the whiteboard that said cut this funding? It's a program that's working. It's reaching disparate communities of disparity. But let's cut that funding.

You know, they're, they don't need mental health. Who made that decision? You.

This, as you are aware, this is an Administration proposal. The one thing I would note, and. I don't, the Governor make the decision. It's the administration's proposal. Who? Who made the decision? It's the. It's our May revision proposal. It is the administration's proposal.

Well, somebody made it. That's why you're standing here trying to justify it. Who told you to be here to justify it?

What I can offer to you, Senator. Grove, is I'm asking you to answer my question. This is the administration's proposal.

Okay. I think it's absurd that we would take community funding on a merit based thing that worked. I'm all in for pulling back money for stuff that doesn't make sense and doesn't work. And you know, take homeless population, $25 billion and you know, one company got billions of dollars and houses 800 people.

We get bought them all $1.0 million homes. I'm well in favor of pulling back money from programs that work, but programs that do work and there's evidence based information out there that says they do work. Why do you target those programs? There's. I know it's a tough budget year. There's a lot of other places you could cut.

And so why pick up. Why pick programs where grants are already extended for at least another year? You have a one year gap. The program Director. The Director says that these programs are evidence based and they are working.

I think I'd also offer that the primary charge of the Department of Public Health is not mental health. We do have a number of other programs that I do not have that information in front of me that offer mental health services. We also have a comprehensive mental health care system.

We have the Department of Healthcare Services that offer, not directly offers, but Medi Cal offers mental health services. We have the Mental Health Services act that offers funding through a number of departments that also offer mental health services. And some of those investments do come into the community to provide linguistically appropriate, culturally appropriate care.

So I hear your concerns and I acknowledge that this is a cut that will be challenging. And I would also, I think it's fair to say that this is not the primary charge of the Department. There are another. There are other departments that. And investments and programs that provide mental health care.

And I just don't have that in front of me right now.

That's okay. I'd like you to look at the individual who was treated by mental health professionals in our state for I think he said eight years. And they kept getting out and getting out and getting out and getting out and committing more crimes. And then they did a diversion program through this other program in mental health services.

And that individual murdered somebody just last week in one of our citizens just last week. And so that program clearly is not working. If you have situations like this, but this program is working, why don't you look at that program where that individual came from and take the budget money from that program.

Instead of these people that are actually clearly working in the communities with these 33 contracts, if they're all 33 working, it should be merit based. Anyways. Thank you.

Senator Menjavar. Thank you so much. Not done with this topic. Department of Finance to your point, but even Prop 1 kind of made the Department of Public Health responsible for mental health as well. So it's not that they're so but they are going to be responsible for mental health. So I think that can be misleading.

Your comment going back to the LBQ women's health equity funding expiration. Further clarification, 15.5 million was allocated in 2019 and none of it was utilized.

So within the budget act of 2019 there was a total of 17.5 million that was available. Some of that funding was expended and the remaining funding that was unspent is what is being re approved is what.

Is being since 2019 only $2 million of the total 17.0 what you said was allocated. And six years later now we want to claw it back. Sorry, could you clarify your question? That's how I feel. I just can't scream here publicly.

So you mentioned in 201917.0 something $1.0 million was allocated for this program and of that in the past six years only 2 million has been utilized. Essentially the Legislature voted on an expenditure of 17.0 something $1.0 million for this specific program and the program did not get off the floor.

Chief Deputy, thank you for the question. Yeah, I won't defend that. That's the fact that it was allocated in 2019 and all but 15.4 or only 15.4 is now available to be saved.

I will note that in 1920 when we went back and took a look at this in 1920 when the funds were initially allocated, obviously during that year.

I hope not 100 years ago.

No, no. Did I say. Yeah. Wow. Yeah. Take this. In the past 201920.

It feels like that's how long.

It does feel that long. Yeah. Wow. But you know, during that fiscal year when we received the funding, we were ramping up the program obviously Covid hit and we started to redirect all staff to deal with the pandemic over the next several years.

So that obviously caused a delay in ramping up and then but as we looked at things, you know, obviously we had some staffing shortages, we had some contracting delays as a result of getting staff on board in this particular unit to then develop the contracts.

We did ultimately put the, you know, we were able to develop some contracts in place. But we need to go back and take a look at kind of why we were why this money is now.

On the table to be both this program and the California Reducing Disparities Program. A lot of it is unspent due to a lot of Department led or government led us, I'll put it on us led delays to no fault to the Vendors that we chose to contract with because it was imposed by us.

It just seems like it's a double punishment. Like, hey, we delayed our contracts implementation to you now because we delayed it and you didn't get it off the ground so fast because we delayed it. You have unspent dollars. So now we're going to claw that back because it was unspent.

Yet we constantly hear, I mean, yesterday we heard a 36% increase in funding because of contracts estimates were incorrect. And we need to continue this contract in this vendor.

You see, the disparities exist that we cut Department of Finance current contracts for services, but we never touch our own current contracts with vendors because the excuse I get from DOF is, well, that's a current contract. It's already midway. The program is midway implementation. These programs are midway implementation as well.

And we don't get answers as to why that's justified to continue. And this isn't justified to continue when it's our fault that the contracts were so late in being implemented.

One of the programs under the California Reducing Disparities Project, or even the increased capacity training for LGBTQ foster youth, we were talking about how earlier this year, how the contracts hadn't been. The two year contracts hadn't even started yet. So I'm just. It's not our, it's not their fault that they have unspent dollars.

It just seems cruel that because we created a delay, it's available for cuts. And then also it's going back on a vote that we did in 2019, we said, you're going to do this. And because it wasn't implemented, you're able to claw it back. The relationship like, we don't have that. We don't never get to do that.

I mean, we've seen so many things that are delayed and create savings, yet we continue to fill into the, into those pots. So, Department of Finance, each year we ask, like, can you come back with a better understanding of your formula here? A formula that is used every single time for these cuts?

Because it just doesn't make any sense.

Thank you. So, you know, with the California Reducing Disparities Project, that is 11 of the areas that I heard a significant amount of uproar from the community about, because we talk a lot about equity in the health space. We talk a lot about our challenges and our behavioral health needs.

We talk about delivering culturally appropriate health care. And this project is doing that. And so to have people out in the community doing what we continue to claim that we uphold as a pillar in our health care delivery here in California. And they're doing it.

And then to have the rug just kind of like snatched out under them. Understand it. It is a very difficult budget season.

But again, when the data shows that things are working, those should be the last things up for consideration for removal and not necessarily the first thing that we see here in the May revision question for the Department are our rates of like, you know, STIs and Hep C now so low that we don't need to worry about them?

No. In fact, they're going up.

So I just. When I look at this and I see that we had like a million authorized in 2023, which was after Covid and for STI prevention and you know, another million for Hep C Prevention in 2023. And those funds were unspent. They were not. We did nothing with them, even though they were allocated.

Why did we not put those funds out to prevent the varying conditions and infections that you say are currently going up in our state?

Some of those dollars were allocated for things like test kits. And they're based on usage. And so they're available to CBOs and to LHJs. And so it's based on how much they were able to use.

So for the STI prevention, you're taking a million from a million that was originally authorized. So nobody needed any test kits.

I think there's. For the hep. Let me see if I get this right. So I think we took 328 from the million on the one side and then there was a larger appropriation. I may need Adrienne or someone to help here.

But what we are going to use the STI money for was to continue some of our permanent staff for a gap of a couple of months as we lose federal funding. And so we won't be able to do that without this funding. And the gap would have been from March to June of 2026.

So is there a $3.3 million amount in the area of reproductive, excuse me, health that is also being sweeped under the rug, 13.3 million.

So. There are reproductive health, excuse me, I'm sorry, reproductive health resources that were allocated in the budget act of 2022. The original allocation was 17.0 total. That was similarly available through June 302025 of the that the dollars that I have here are that there was a remaining 11.1 million total that was unspent.

And again, similar to the other proposals that expires naturally on June 30th of 2025.

Okay. Because that wasn't presented today.

Yeah. My understanding is that the. And we can clarify this, but I believe that the 15.5 million in totality is those reproductive health resources in addition to the LBQ women's health.

That's not what we were told earlier.

I don't. Sorry.

No. I think we may have to take that back and make sure we give you the right numbers on that.

So my understanding. And from what we were discussed. 15.5 million. That's what you're talking about. Right.

There's a. So there's. There's a total of 15.5 million. And in totality, that 15.5 million is what is expiring as of June 302025.

That's correct. And that was the issue that I. Yeah, that's good.

So that was the LBQ Women's Health Equity funding that you're talking about. I'm asking if there is a separate. Around 13 million specifically for reproductive health that is now being brought back.

I believe what you're referencing, as my colleague noted, was the Reproductive Health Dollars of 17 million that were appropriated in the 2022 Budget act, of which about 11.2 million is left. As they noted, those funds are set on June 302025 and the May revision does not reflect a reappropriation of those dollars.

But without that, they would expire on the natural. Given their authority was through June 302025.

Okay, so they would expire just like the LBQ expires, except that was discussed today, but the reproductive woman's health was not. Correct. Okay, so can someone please explain to me why we have 11.1 million that was unspent in the areas of reproductive health?

I believe it's the same concept that. Yeah, again, it's due to the impact of having delays in hiring staff and getting those contracts out. The same concept.

I'm sorry. This was originally appropriate at 17. In what year?

It was the Budget act of 2022. Okay.

And so there are no organizations, CBOs or whatever that would. That could use those funds for reproductive health.

I would just reiterate that similarly to the LBQ Women's Health Equity funding, this was funding that was set to expire as of this year. Therefore, the organizations were aware of the length of the funding. But I would defer to the Department in terms of.

Well, there's a difference between, like, knowing that it's going to end at a certain period of time, but then you have funds that you can get out before that end date to actually give to those organizations.

So, I mean, it's a different situation if it's ending and we've got $0 versus it's ending and, zero, we didn't spend 11 million of it. So, again, is there any particular, like, are there no organizations that could use that money?

Just trying to understand why we are not utilizing, you know, over 11 million in the area of reproductive health that was allocated back in 2022.

I think it's. I mean, I think it's similar to again, the 15.8 or 15.5 million issue. It's just given the budget circumstances and trying to solve for the budget deficit, this funding was able to be expired. Not that it couldn't be used. You could have that, we could have that conversation on a lot of different areas.

But in this particular case, it was decided to let this funding expire.

So in the area of reproductive health that the voters have been, you know, very vocal about protecting that we as a state have, you know, traditionally stood behind. We are proposing to slash funding through Prop 56, which we'll talk about later, and Prop 35. Because we're potentially slashing funding in Prop 56,

We can't give Prop 35 funding in that area which the voters voted for. And we also have 11 plus million specifically for reproductive health that never went out and is now expiring. Okay, so we can now move to issue number six, technical adjustments in the May revision.