CA Alliance Statement Regarding the May Budget Revision

Gov. Newsom Leaves Foster Youth Behind  - CA Alliance Statement Regarding the May Budget Revision

Sacramento, Calif —The following statement can be attributed to California Alliance of Child and Family Services CEO Christine Stoner-Mertz, in response to Gov. Gavin Newsom’s release today of his May Budget Revision for 2025-2026:

“The Governor's May Budget Revision released today leaves behind California’s foster youth, many of whom have experienced trauma, homelessness, and exploitation. 

In California, there are over 7,000 foster youth at risk of losing their supported family placement this year if the state does not take action to financially address the insurance crisis that may lead Foster Family Agencies (FFAs) to close their doors. FFAs are a crucial component of the child welfare system and are needed to meet the Governor's initiatives. FFAs support family reunification, and when that is not an option, they help to recruit, train and support foster parents. The California Alliance of Child and Family Services has requested $42.2 million in bridge funding to help FFAs pay for higher insurance premiums while the state and stakeholders negotiate a long-term solution. However, Gov. Newsom has not included those funds in his proposal.

The insurance crisis, coupled with unsustainable payment rates, puts at risk the entire network of community-based non-profits supporting family placements, trauma recovery, and mental health for our foster children and youth. Non-profit organizations, deeply rooted in California’s communities, are the backbone of California’s child welfare and behavioral health systems and are essential partners in delivering on the Administration’s goals to strengthen the network of resource families and address the youth mental health crisis. The insurance crisis is impacting many non-profits, including FFAs, and a statewide solution is needed to ensure service providers can continue supporting children and youth in California.

Further, the administration is proposing $13 million in ongoing cuts to the Family Urgent Response System (FURS). This is deeply disappointing. The FURS program is intended to prevent and reduce placement disruptions and keep children, youth, and non minor dependents in their current living situations, when it is safe to do so. Foster youth, advocates and lawmakers made clear in the last budget cycle that this program deserves California’s full support and we will continue to advocate loudly for this vital program.

Additionally, we are concerned that the budget links the permanent foster care rate structure  to a trigger, based on the availability of General Fund in spring 2027. If the state does not have the funds to implement the rate structure in 2027-28, it runs the risk of delaying the implementation of the new rates again. FFA rates are already insufficient to pay for the services that foster children and youth need, potentially impacting their well-being and stability. For providers, it means continued uncertainty and potential financial strain while they prepare for the new system.

As the budget process unfolds, CACFS will work closely with the Administration and legislature to ensure our most vulnerable  youth and families are protected to the fullest extent. With federal cuts to Medicaid likely, and the Governor’s cuts to Medi-Cal coverage for immigrants, California must stand by its commitment to the mental health and well being of children and youth.”