Governor Brown Proposes Massive Cuts to Social Safety Net5 min read

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Governor Jerry Brown’s proposed State Budget for 2011-2012 calls for over $12.5 billion in permanent spending reductions, including $1.7 billion in cuts in State general spending for Medi-Cal that calls for imposing a permanent 10% reduction to Medi-Cal providers, limits or caps on spending of certain Medi-Cal services, elimination of Adult Day Health Care and Multipurpose Senior Services Programs and imposing co-payments or share of costs for certain Medi-Cal services, such as emergency room and doctor visits. 

California faces a budget shortfall of over $25 billion and projected on-going budget deficits through at least 2016 of over $20 billion unless permanent action is taken by the Governor and Legislature.

In addition to $12.5 in proposed spending cuts, the Governor today proposed a budget plan that calls for $12 billion in revenues, including a five year extension (requiring voter approval in a special election in June) of about $8 billion in temporary tax increases that are scheduled to expire this year.

The budget plan also calls for some one time solutions including $1.8 billion in borrowing from special funds, $1.7 billion in property tax shifts, $1.0 billion from shifting funds from the Proposition 10 Children and Families First reserve fund to pay for children’s health services, and $0.9 from the Proposition 63 Mental Health Services Act fund balance to pay for three mental health community-based programs including AB 3632 special education mental health services. 

Governor Assumes That Legislature Will Act To Pass Early Budget By March

The Governor’s proposed budget plan assumes it will be on a fast track, with the Legislature approving the entire budget package, including necessary budget related bills by March to allow enough time for certain proposals – including extension of tax increases – to be placed on the ballot for voter approval in a special election, likely to be held June 15th.

That means the Legislature would have to move quickly in the next several weeks as it did in 2009, when it approved mid-year reductions and the 2009-2010 State Budget in February 2009 – four months early. 

That means the normal budget process – where there are budget subcommittee hearing beginning in late February through early May – may not likely happen this year as it did in 2010 and previous to 2009, if the Governor has his way. There will likely be a budget revision proposal however in June – instead of May – after the special election, depending on what the voters do and also any new proposals advanced by the Governor. 

Healthy Families Program Cuts Proposed

The Democratic Governor is also proposing elimination of the vision benefit, increasing co-payments and monthly premiums for children and families in the Healthy Families program – the program matched by funding from the federal State Children’s Health Insurance Program (SCHIP) that serves over 900,000 children across the State who are not eligible for Medi-Cal but whose family incomes are at or below 250% of the federal poverty level ($44,100 per year for a family of four).

Proposes Shifting Proposition 63 Funding for Mental Health Programs

The Governor also proposes to use existing fund balance from the Proposition 63 Mental Health Services Act to fund 3 mental health programs: Early and Periodic Screening, Diagnosis and Treatment (EPSDT) program that services over 230,000 children and young adults who are Medi-Cal eligible; Medi-Cal mental health managed care and the mandated mental health services for special education students under AB 3632. The Governor proposes to replace the funding used from the fund balance of Proposition 63 with another source of revenue during the 2012-2013 State Budget year that begins July 1, 2012. 

Huge Cuts Proposed For In-Home Supportive Services

As reported in earlier CDCAN Reports today, the Governor’s proposed cuts to In-Home Supportive Services, including making permanent the across the board 3.6% in IHSS hours for all recipients, which goes into effect February 1, 2011 (that cut was approved as part of the 2010-2011 State Budget in October) and increasing that reduction by another 8.4% (or a total of 12%) effective July 1, 2011. 

The Governor also proposes elimination of domestic and related services for persons under age of 18 living at home, and also for adults residing in a “shared living” arrangement. 

More significantly, the Governor is proposing that all persons for applying for services under IHSS and all persons currently in the program would be required to have a certification from a physician that they are “at risk” of being institutionalized in order to be eligible for the program.  The Governor’s budget assumes that about 40,000 or more people would, for various reasons, no longer be eligible for IHSS due to this new requirement. 

$750 Million Reduction For Developmental Services

The Governor’s proposal for a $750 million reduction in state general fund spending for developmental services includes the 21 non-profit regional centers.

The bulk of that cut will most likely come from the 21 non-profit regional centers who coordinate community-based services and supports to over 240,000 children and adults with developmental disabilities. The regional centers contracted under the Department of Developmental Services (DDS) also coordinate the state’s early intervention program – called Early Start – that serves over 25,000 infants.

The proposed $750 million reduction does not include any lost federal matching funds which would like push the total reduction in spending in developmental services to close to $1 billion (all funds). This reduction is on top of 2009’s permanent and on-going $500 million reduction (including federal funds lost) in developmental services (the bulk of it impacting regional center funded services).

The $750 million reduction in State general fund spending proposed by the Governor would include the continuation for at least another year of the existing 4.25% reduction in payments to most regional center providers and to regional center operations which was scheduled to end as of June 30, 2011. That reduction would, under the Governor’s proposal, continue at least through June 30, 2012 – though the savings or reduction amount actually is permanent.

The reduction also would be achieved through several unspecified measures, including imposing new accountability and transparency measures; and implementation of a statewide purchase of services standards – first attempted in 2002 by Governor Gray Davis. 

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Marty Omoto is Executive Director of the California Disability Community Action Network, a non-partisan link to thousands of Californians with developmental and other disabilities, people with traumatic brain injuries, the blind, the deaf, their families, community organizations and providers, direct care, homecare and other workers, and other advocates to provide information on state and local public policy issues.

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