Good afternoon and welcome to the personnel administration and legislation committee of the Alameda County Board of Supervisors for Monday, January the 12th, 2026.

May I have a roll call, please?

Supervisor Fortunatabas.

Supervisor Tim.

Present, thank you.

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Thank you.

Thank you very much.

Let's start with the legislative update from CJ Lake.

Good afternoon.

Um as well.

Quick update kind of on where things stand with the schedule.

I know we've been focused on appropriations uh in December, and then when the House and Senate came back last week.

You know, the current CR does uh run through Friday, January 30th.

Um both the House and Senate are in session this week and next week.

And then the House is supposed to be in recess the week of the 26th, so leading up to the expiration of their continuing resolution.

The Senate is expected to be in, but all that to say, you know, at this point, if they're going to try and wrap up these remaining bills, they've got two weeks to do it or end up passing some sort of continuing resolution for the bills that they aren't able to negotiate on um year uh year long spending or at this point, what eight months worth of spending.

Um so we we do have some kind of positive uh momentum, and I know we talked about that last week, um, in that the house passed or was putting together a bipartisan three bill spending package, um, which included commerce, justice, science, interior, environment, and energy and water.

Um, and that did pass with broad partisan support.

Um, and the Senate is expected to take up that package this week.

Um, and then at the end of last week, the house was trying to put together a third package that um was to include financial services, state foreign operations, and homeland security.

And they ended up pulling uh homeland security out of it uh for a number of reasons, but certainly uh with what happened in Minnesota last week um with ice and I think just uh it's it's so politically charged right now that they could not reach a deal uh between Republicans and Democrats on the homeland bill.

So the House is set to take up that two-bill package.

Um the thought that they could then uh send it to the Senate, uh, but that still leaves defense, labor HHS education, transportation HUD, and homeland security.

Um, so again, kind of given the scale and complexity of these accounts and just the politics of it.

Leadership has signaled that there could be um, you know, either a short-term CR or even full year CRs um as a potential possibility if an agreement can't be reached on those remaining bills.

Uh John, not sure if you have anything to add on approbes.

No, I think that covers it.

Okay.

And then, you know, we can switch gears to um health care.

I know you've been kind of taking the lead on that one.

John, if you want to jump in there.

Uh, sure thing.

So last week the house passed legislation that would extend the ACA's premium tax credits for three years by a vote of 230 to 196.

There were 17 House Republicans that joined all Democrats.

Um, this, of course, came after the successful discharge petition uh that was passed in the House before the end of last year.

The bill is unlikely to advance in its current form.

However, a group uh bipartisan senators uh are continuing negotiations around a narrower health care package that could include a shorter extension, likely two years of the credits with a retroactive provision allowing individuals that qualify for the credits to continue that.

Um of course the credits would not be a straight extension like we'd see now.

There would be policy changes such as eligibility gaps, minimum premium contributions and potential adjustments to health savings accounts, where is individuals could have the opportunity instead of receiving a premium subsidy, they could have that money diverted to uh NHSA.

This would likely take place in the second year of the uh extension.

There's no clear agreement on a path forward that can secure the necessary votes, however, uh if they do choose to move forward with this package, um they would likely use the House passed extension bill as a vehicle and then uh include a um a substitute amendment that would include this package.

Um, of course, the elephant in the room, um, as is all things when it comes down to health care is the future of the Hyde Amendment.

Um, this is an amendment that was included many years ago um into federal legislation that prohibits the use of federal funding to go towards abortion, the affordable care act, um, because it was passed um through the reconciliation process during the Obama administration, does not include Hyde language.

However, Republicans have been eyeing to include um hide language into the Affordable Care Act for many years, and this continues to be a priority for many members in both the Senate and House.

Um, this is of course a red line for many Democrats as they are opposed to the Hyde Amendment and would not want to see um the additional uh creep of Hyde into the Affordable Care Act subsidies.

So this is creating a bit of an issue uh on the future of the tax credits um as this conversation kind of happens in the House.

Um beyond the ACA subsidies, lawmakers in both chambers are expected to continue broader health care policy conversations this month, uh including efforts to contain rising health costs of potential reforms to insurance markets, as well as renewed attention to pharmacy benefit manager legislation.

The PBM bill has been something that's been kicking around uh Congress for a couple of years now, um, with fits and starts uh and varying degrees of success.

Um, and of course, with an eye to the election, Republican leadership is looking to rewrite the narrative on health care and pass legislation that can help their more more vulnerable members in November, as they see it as a potential weakness on broader affordability issues in the midterm elections.

And then just get over to you.

Yeah, go ahead.

Go ahead.

No, no, no, no, no.

Take it, take it.

Um just quickly, I know um supervisor Fortunato Bass, you know, you brought up uh the federal funding freeze last week on PAL when it wasn't even official yet.

Um, you know, as it relates to uh social services block grant, TANF and then um child care block grant um for you know the five blue states that we're tracking.

Um just want you to know, you know, we we are monitoring and have been in touch um with first five and it and I know I'm sure Amy will touch on this.

You know, California joined um a number of states uh in a lawsuit, and then uh, you know, the judge temporarily blocked the funding freeze on Friday.

So 14 days, um, you know, while arguments are made in court.

Um, but you know, one other note.

In addition to that freeze, the administration is also asking all states to provide more information to justify and support spending on child care.

Um, you know, a requirement that a number of state officials have said it just is onerous and could delay funding.

So just um wanted you know we have been in touch uh with folks at first five on that.

Um I think that's it.

Happy to answer any questions thank you very much for that update uh supervisor fortunate of ask questions comments uh yes uh thank you Emily and John for the update as well as for reaching out to first five last Monday really appreciate uh that communication and having made that connection um so we'll see how the legal strategy plays out um just one question I believe you mentioned that with the current CR expiring at the end of this month there might be a short term CR or a full year CR.

Does that mean uh those scenarios are likely and there won't be another government shutdown or is that is a government shutdown possible you know it it's always possible so you know I don't want to say that it's off the table but I don't get the sense that anyone wants to shut down the government um right now so um you know my sense is they will have passed what if it's all said and done I guess six bills at bat at best maybe eight um before uh we get to the 30th um I think we'll end up having at least a short term CR.

Um I don't think they'll do year long by the 30th but that could come um John I don't know what your thoughts are but it it doesn't feel like a shutdown right now.

No I I I echo that um I would be hard pressed to say that there's a likelihood of there being a shutdown you know there were the handful of democrats that cross the aisle in voting to reopen the government last year um all of those members are either very moderate come from purple states or retiring um about five of them and wanted to end the shutdown much earlier that than um the November elections they wanted to end the uh shutdown two weeks prior to that so they had already kind of exceeded their limit of where when they wanted to see the government shut down um I find it very unlikely that that group of uh moderate and purple state and retiring members would go along with another shutdown even if uh Mr.

Schumer indicated his support for that um just constitutionally they seem to be opposed to to doing that especially when there isn't an explicit reason policy reason to shut the government down of course the last time was over the ACA tax credit that negotiation is going on in the Senate right now um so if if we're if Democrats were to engage and sort of shut down politics they would lose the high ground and trying to negotiate in good faith uh on trying to get some sort of extension so as it stands right now Chris Murphy who is of course the ranking member in the Senate homeland committee um he's been the major sticking point in moving forward with the homeland security bill so you may see a continuing resolution on that however conversations um on the future of the homeland bill continue to move forward but um I just struggle to see a world in which Democrats go along um with with a shutdown um over the homeland bill thank you and last question do you have a sense of timeline for the senators negotiations on health care anyway I mean the Senate marches to the beat of its own drum and the Senate finishes its work when it chooses they were hoping to get uh some sort of text out at the beginning of this week they were working last week on trying to draw something together so I think that we could potentially see uh if not legislative text but a more solid framework um before they go into recess next week of course the Senate comes back the final week of January which pushes up against the January 30th um funding deadline but uh uh we may see some some language come out this week if not bill text Emily, I don't know if you have a.

Yeah, I think I think we talked about the timing of it um last week as well.

I just I don't know, but I think you're right.

I mean, we we were hoping to have already seen text and that hasn't happened yet.

So hopefully this week we'll see something.

And then I think, you know, we may see some movement.

But my sense is it'd be tough to get that done before the end of this month.

And then it has to go back to the House.

So thank you.

Thank you.

Uh those were along the lines of my questions as well.

So just to clarify, the version with the three-year extension on the ACA tax subsidy that you said has almost very little likelihood of uh passing in the Senate, and that Senator, the version that Senator Marino is trying to gain Republican support on, is that the version where you talked about um the HSA and maybe a shortened time frame on the extension, or is that trying to get what the House had passed in terms of getting Republican support?

Uh the Moreno Bill would be the uh income caps, the HSAs, the shorter extension time window, um, and of course the the Hyde Amendment language.

Um the Senate really already voted on a version of the House, the House's extension uh last year.

They held side by side votes, um, which both failed 51 to 49.

So Senator Thune can claim that the Senate has already spoken on a straight three-year extension that did and it did not pass.

Um, so any sort of legislation that would get brought up if Senator Thune chooses to bring up um a compromise bill would have to come organically from the Senate rather than something taken directly from the House.

Okay, thank you so much for that clarification.

Um are there any public comments on the federal legislation update?

There are no public comments.

Okay, uh let's move to the state legislative update from Full Moon Strategies.

Good afternoon, supervisors.

Uh Amy Costa here with Full Moon Strategies.

We had a busy week back in Sacramento with both the governor's state of the state as well as the presentation of the governor's budget last week.

Uh the Department of Finance unveiled the 26-27 governor's budget.

Uh it totaled 348.9 billion dollars all funds, including 248.3 billion in general fund expenditures and 23 billion proposed in total reserves.

Um, while the budget is technically balanced, it's important to note that they're also showing an operating budget deficit of 20.9 billion dollars in the budget year.

And that simply means that their expenditures are exceeding their revenues in the budget year without the use of carryover uh carrying imbalances and other reserves, which they've relied on in the last several years.

Uh and beyond that, there are uh projected operating deficits um throughout the multi-year forecast uh which extends through 2930.

Um, and so as a result, the budget doesn't have very many significant new uh spending proposals.

Uh as we reported, the budget was presented by uh Joe Steppenshaw, the director of the department of finance, and in that presentation, he acknowledged that there are many economic uncertainties and a complicated federal-state relationship, giving a lot of uncertainty um to this particular budget projections.

Um they did project um through mid-2027 that general friend revenues will be over 42 billion higher than their previous budget year estimates.

But even with these revenues, which the administration noted are highly concentrated in the technology sector, uh the governor still had to address a 2.9 billion dollar shortfill in the budget year.

Um I I would note that um the deficits grow in the out years with the administration projecting a $22 billion deficit in 27-28.

Um, as in previous years, as part of the presentation, the administration did note their intent to present a balanced budget across both the budget year and budget year plus one as they head towards the May revise.

I think most notably for counties, the state um, you know, administration officials talk a lot as we have here about the impact of HR one.

Um, and the state is estimating about 1.4 billion dollars in budget year and additional cost associated with HR one.

However, they include no additional increased share of cost for counties or any significant backfills from the state either.

A couple of structural things I would know in the budget that could depend on the outcome make the situation worse, is that the budget does assume that the state's MCO tax will be active for the calendar year versus the fiscal year.

That requires CMS approval, which we have not received.

So if we don't get that, that will create another hole.

We will need to plug at May revise.

I also think it's notable that the state has an operating deficit, even given the Rose year revenue projections.

It does mean that our expenditures are outpacing our revenues, even when revenues are sort of above what was projected.

Medi-Cal continues to be the largest program in the state and the state's biggest general fund expenditure.

The governor's proposed budget allocates 196.7 billion dollars in 2526 and 222 billion in 2627.

And this includes some of the reduced caseload projections related to the changes in HR1 and those that'll be rolling off of the program.

As we've talked about, there are several new requirements, including work and community engagement rules, six-month eligibility redeterminations for the exchange adult expansion population, restrictions on immigrant eligibility, FMAP adjustments for emergency services, and reduced retroactive Medi-Cal coverage beginning in 2027.

And the narrative, the administration notes that the cost to the state of covering these populations and noting that the state would not be able to afford fully backfilling those populations.

As I said, and it's notable, the proposed budget does not include any specific funding for counties to address these increased administrative costs on things like redetermination and work requirements.

They did know that they will be engaging in ongoing conversations with counties to better understand these costs.

So of course, we'll work with county staff to make sure administration officials are well aware of what we're projecting Alameda County's increased cost might be.

Also during the press conference, the director was asked specifically about indigent care and increased cost for counties.

The budget again contains no proposals.

He did note that the administration will continue to work with counties to better understand those costs.

And we're working within the county family to educate lawmakers on the indigent care program, because many lawmakers, you know, were not around when we had kind of the more traditional indigent care prior to ACA.

County officials obviously have expressed concern that uh implementation of the provisions of HR1 could place significant strain on local uh fiscal uh resources, particularly for indigent care programs and populations move to restricted scope Medica.

The governor's budget also proposes 233.6 million general fund reduction by removing the state share of IHSS growth per case, which would start in 27-28, shifting that cost to counties.

The Department of Social Services, the State Department notes that while functional indexes are unchanged, assessed hours have risen and counties can manage costs through local policies to help limit growth.

Lastly, we've talked a lot about CalFresh.

And again, significant federal policy changes under HR1 have changed the program, increasing the program's cost by nearly $300 million while reducing eligibility for some recipients.

The governor's proposed budget includes 38.2 million general fund increase to offset the federal reduction and the administrative cost sharing from 50 to 25%, with county costs rising by about 149 million starting in October of 2026.

As we've discussed, this is guided by the state's um payment error rates.

And in the last budget, the policymakers did provide 39.9 million to support various initiatives to help reduce the state's uh payment rate, which if successful would lower our share of cost.

So more to come over that.

And as always, over the coming weeks, we'll be reviewing all the budget details, including the budget change proposals, working with staff and providing updates as we learn more.

Um I won't belabor um the uh the uh federal judge uh temporarily blocking the administration's 10 billion dollar welfare fund freeze that Emily went over in her presentation.

I would just note as we've seen before that Attorney General Bonta has argued uh it's overstepping um the administration's overstepping their authority to retract funds.

Congress has already appropriated.

We've seen this in other lawsuits.

So it's an argument that we have used with some success previously, but of course, more to come.

Lastly, on the topic of attorney general bonta, he announced he will not be running for governor in 2026 and will instead seek re-election as attorney general.

Uh in recent days, folks were he had said that he was going to make an announcement, and I think folks were wondering if he's going to join an already crowded race for those seeking to be governor.

Um, and he noted that recent actions by the federal administration, including the freezing of welfare funds to California, um, and um given the recent events in Minnesota with the ice shooting, reinforce his belief that he can be most effective as the attorney general uh in helping Californians weather these um tough times.

Uh with that, I'm happy to answer any questions you may have.

Thank you, Emily.

And we, I'm sorry, Amy.

Um, we are going to have a joint meeting with the health committee and social service right after this in a few minutes so we can um take a deeper dive into um the issues around HR1 and the impacts.

Uh so at this time, are there any questions or comments from Supervisor Fortunato Bass?

Thank you, Amy.

I think I'll hold my comments and questions for the joint meeting.

Thank you.

Are there any public comments on the state legislative update?

There are no public comments.

Okay, so uh the next item is a request for a legislation position.

The first is an informational item, it's on SB 811.

Um, the county and PAL had already taken a position on SB 404 and this um new bill is basically a change in the number, and we are um continuing to take an opposed position.

Uh there is a request from Supervisor Miley to take a support position on AB 617 and ASB 434, AB 617 pertains to uh licensure and oversight on contracted organizations that provide personal care or personal assistance services to in-home respite services and also looking at uh potentially uh exemping for licensure uh non-medical facilities to increase the availability of services and so there's a request for support position on that and uh SB 434.

He's requesting a uh support position on a bill that basically requires a safe discharge plan.

If there's a notice of eviction from a residential care facility for the elderly, um, do we have a motion to support this or to move forward with the recommended positions?

And before that, are there any public comments on the proposed positions?

There are no public comments.

I'll make a motion to support the uh proposed positions and advance this to the full board.

Okay, so we have a motion to move to the full board of support position on AB 617 and SB 434 and an oppose on 811, which is really really an informational item.

Um, and I will second that motion and let's have a quick roll call.

Supervisor Fortunately Bass.

Aye.

Supervisor TAM.

Aye.

Motions passed.

Thank you.

Are there any public comments and items that are not on today's PAL agenda?

There are no public comments on non-agendized items.

Okay, thank you.

Normally I will um ask for a roll call on participation, but because we are going into our next joint meeting, I will refrain from doing that and adjourn today's PAL meeting.

Thank you.