Governor’s Budget Proposal

The Governor released his 2016-17 budget proposal on January 7, and it appears we finally have some traction getting on his agenda. The Governor’s proposed budget includes $80 million for three “targeted investments” in the developmental services system, including:

  • $46 million for a new 4-bed Alternative Residential Model homes rate, which recognizes that regional centers have moved to a 4-bed model.
  • $17 million for regional center case managersto address the caseload ratio mandated by the federal government.
  • $15 million for rate increases to providers to transition services to comply with the Home and Community Based Services settings rule.

Additionally, the Governor’s proposal assumes a reconciliation of the Managed Care Organization (MCO) tax issue, with a commitment to using a portion of the funds generated by that tax to address shortfalls in the developmental system. At this point, the administration is not providing any idea of how much money will be available to stabilize the system, but insists that any rate increases will be targeted and not across the board.

CDSA, along with the Lanterman Coalition, continues to advocate for a 10% across-the-board rate increase to stabilize the collapsing system. In response to the Administration’s request for targeted proposals, the Coalition has identified wages and benefits as a targeted cost component, a roughly $325M GF investment that still benefits most programs. Comprehensive funding reform will remain critical to the system’s sustainability.

Current Issues

Community Developmental Services

  • The budget continues service deterioration from frozen rates since 2008.
  • The budget does not fully address unfunded mandates, in both Regional Center Operations and Purchase of Service.
  • The budget proposal invests insufficient funds to address transition to and compliance with the CMS “Settings Rule.”
  • An across-the-board restoration, championed by legislators of both parties and houses, is the ideal way to rebuild, since the whole system suffered across-the-board recession-era cuts, and decades of underfunding and political neglect.
  • There is no guidance or plan from the State regarding the HCBS Settings Rule, leaving providers to find their way to compliance without a road map for how to get there.

CDSA Budget Advocacy Messages 2016

  • The community caseload is up 4.1%, but state cost is up 6.2%.
  • Developmental Center caseload is down 18.5%, while state savings are only 8.5%.
  • Minimum Wage funding does not include impact on exempt staff (California requires double the minimum wage).
  • Federal labor regulation impact funded, but was it funded at the right amount?
  • The Lanterman coalition is asking for a 10% system wide increase to stabilize the system ((approximately a $390 million (GF) ask)).