Concern from Advocates for Disabled, Seniors, and Others About More Cuts As California State Budget Bill Heads To Governor Schwarzenegger

State officials and advocates say the long budget delay - which left California as the only state in the nation with out a budget - caused enormous impact on tens of thousands of people with disabilities, seniors, mental health needs, children, their families, community organizations who provide services and support to them, their workers and other agencies. In many cases programs and services in communities across the State eiher closed or faced imminent closure or reduction in services due to delay in the budget that prohibited the State from paying money owed amounting to well over $2 billion since.

Many agencies and programs were forced to take out loans to pay workers and to keep programs running. The state does not reimburse for the cost of the interest on those loans - a point advocates and providers have said is unfair, given already low rates of reimbursement.

In response to the impact of the budget delay on community providers, State Controller John Chiang, the elected state official in charge of paying the state's bills, urged state agencies to prioritize what needs to be paid. The State Controller said he wanted to make sure that critical services - including skilled nursing facilities, intermediate care facilities, day care providers and others get paid as soon as the Governor signs the budget - expected within a few days.

The State Controller hopes to reduce the time it takes to process claims from 15 days to 7 to 10 days and 1 to 3 days for certain other payments.

CDCAN Vote Record Report

SB 77 (main budget bill)
Action - August 21, 2007: Passed (27 to 12)
AYE VOTES (27)
Democrats (25): Alquist, Ron Calderon, Cedillo, Corbett, Correa, Ducheny, Florez, Kehoe, Kuehl, Lowenthal, Machado, Migden, Negrete McLeod, Oropeza, Padilla, Perata (Senate President Pro Tem), Ridley-Thomas, Romero, Scott, Simitian, Steinberg, Torlakson, Vincent, Wiggins, and Yee
Republicans (2): Ackerman (Senate Republican Leader) and Maldonaldo
NO VOTES (12)
Democrats (0): -none-
Republicans (12): Aanestad, Ashburn, Battin, Cogdill, Cox, Denham, Harman, Hollingsworth, Margett, McClintock, Runner, Wyland
ABSTAIN, NOT VOTING OR ABSENT (1):
Republican: Dutton (absent - ill)

STATEMENTS FROM GOVERNOR AND SENATE LEGISLATIVE LEADERS

Senate President Pro Tem Don Perata (Democrat - Oakland): "This budget is far from perfect, but it’s the best we can do under difficult circumstances. It is unfortunate that [Senate] Republicans blocked passage of this spending plan for so long and created pain and hardship for many Californians, who saw payments for child care centers, nursing homes and community colleges cut off. But that is now behind us, and I look forward to preparing for next year’s budget as soon as possible."

Senate Republican Leader Dick Ackerman (Republican - Tustin): “With assurances by the governor to use his veto power, this budget spends over $2 billion less than the Democrats’ proposal. Additionally, Senate Republican’s were successful in gaining frivolous lawsuit protection for billions of dollars approved for transportation and levee projects. This budget fully funds education and law enforcement while paying down debt by more than $2.5 billion. This is a responsible budget but is not a perfect budget. Even with the governor’s promise to veto hundreds of millions of dollars, California is facing a multi-billion dollar deficit next year. We need to start addressing next year’s problem today. We must find solutions that will achieve a balanced budget without tax increases while protecting vital services like education, public safety and care for the elderly.”

Governor Arnold Schwarzenegger: “I am pleased that the legislature has passed a responsible budget that protects California's priorities and keeps our economy strong. It was a challenging process but in the end our legislative leaders came together to deliver a spending plan that does not raise taxes, creates the largest reserve in history, and reduces our operating deficit after the spending vetoes that I have promised. This budget also limits spending growth to less than one percent, pays down $2.5 billion in debt, fully funds education and public safety, and allows us to move forward with the infrastructure bond measures that voters approved last year. We now will move forward together on the issues we've been elected to address such as health care, a comprehensive water plan, and redistricting reform.”

MOST BUDGET TRAILER BILLS ALSO PASS WITHOUT CHANGES

As part of the budget agreement to end the stand-off in the State Senate, some changes were made to some of the budget related bills, called budget trailer bills - though most of those bills remained identical as passed July 20th by the Assembly. Copies of the budget bill and budget trailer bills are on the CDCAN website.

No Changes to SB 84 - Human Services Trailer Bill

No changes were made to SB 84, dealing with human services budget related issues, including controversial changes to the Adoption Assistance Program for families who have adopted children with developmental disabilities, and also changing how regional centers, county welfare or social service agencies, and two different state departments (Department of Social Services and Department of Developmental Services) implement the program.

SB 84 also contains provisions that authorize the five month suspension of cost of living increases due January 1, 2008 for the state portion (SSP) of the Supplemental Security Income/State Supplemental Payment or SSI/SSP grants and the one year suspension of the cost of living increases due January 1, 2008 for persons on the CalWORKS program.

SB 84 also requires the Department of Social Services to implement a direct deposit program for In-Home Supportive Services workers by June 30, 2008.

SB 84 previously passed the Assembly on July 20th, and passed the State Senate August 21, without changes, by vote of 27 to 11.

Health Trailer Bill is Now AB 203 Instead of SB 83

AB 203 (mistakenly reported yesterday as SB 203), replaced SB 83 as the budget health "trailer" bill, originally passed by the Assembly on July 20th. [A copy of this and other budget related bills are on the CDCAN website.] The Senate passed AB 203 by vote of 28 to 9, with the Assembly following that action yesterday by a vote of 54 to 24.

The bills are identical with two exceptions:

• Corrects a minor drafting error regarding the transfer of rate setting for County Organized Health Systems rate (section 85 in SB 83, which is now deleted in AB 203.

• Deletes sentence in Section 70 of SB 83 that deals with recovery of Medi-Cal liens from tort settlements. That language - now deleted in AB 203, would have prohibited the amount paid by Medi-Cal from being considered as evidence of past medical damages or for the purpose of redcuing a third party's liability.

AB 203 Deals With Developmental Services

AB 203, identical to SB 83 as passed July 20th by the Assembly, also deals with budget issues regarding the Department of Developmental Services:

AGNEWS DEVELOPMENTAL CENTER

• Requires the Secretary of the Calfornia Health and Human Services Agency to verify that the Department of Developmental Services and Department of Health Care Services have established protocols for the provision of services to people with developmental disabilities moving from Agnews Developmental Center, slated for closure by June 30, 2008.

• Requires the Department of Developmental Services to continue the operation of the Agnews Outpatient Clinic until the Department of Developmental Services is no longer responsible for the property.

• Require that a Medi-Cal reimbursement rate be created for persons transitioning from Agnews and enrolling into a Medi-Cal managed care health plan that is cost-based for medical services.

REGIONAL CENTERS FUNDED COMMUNITY BASED SERVICES

A new requirement in AB 203, which is identical to what was in SB 83 as passed July 20th by the Assembly, is raising concerns among some advocates, persons with disabilities, families, regional centers and others on the impact of a recommendations that the Department of Developmental Services is required to make to the Legislature by October 1, 2007 this year, on options to reduce regional center spending. Some advocates - noting the early date the recommendations are due - fear possible mid-year reductions and cuts that could be proposed in the 2008-2009 state budget the Governor will submit to the Legislature in January.

AB 203 (identical to what was in SB 83) requires the Department of Developmental Services to submit a report containing options for consideration by the Administration and Legislature to better control regional center costs of "operating and providing state-supported services", and that the report be submitted October 1, 2007 (this year) to the Joint Legislative Budget Committee and the Senate and Assembly Human Services Committees of the Legislature.

AB 203 (identical to what was in SB 83) also continues for another year at least the following "cost containment" provisions:

• Extends for an additional year, until June 30, 2008, the requirement that contracts between the Department of Developmental Services and regional centers for persons with developmental disabilities specify certain service coordinator-to-consumer ratios.

• Extends for an additional year, until July 1, 2008, the requirement for the assessment of certain individuals for whom benefits are provided by regional centers to be performed within 120 days, instead of within 60 days following initial intake.

• Extends a limit on the rate of payment a regional center may pay a provider for specified services to a rate that is in effect on or after July 1, 2007, and applies that limit to the 2007-08 state budget year, which began July 1.

• Extends the provision for the 2007-08 fiscal year that no regional center may approve any service level for a residential service provider if the approval would result in an increase to be paid to the provider that is greater than the rate in effect on June 30, 2007.

• Continues for the 2007-08 state budget year the prohibition on the Department of Developmental Services from establishing any permanent payment rate for a community-based day program or in-home respite care agency that has a temporary payment in effect on July 1, 2007 or making other specified changes or adjustments that would result in a rate increase.

• Continues for the 2007-2008 state budget year the prohibition on regional centers spending any purchase of service funds for the startup of any new program unless the funding is necessary to protect a person's with developmental disabilities health or safety or because of other extraordinary circumstances and the Department of Developmental Services has provided written authorization in advance.

Health Facilities Issues in AB 203

Provisions in AB 203 dealing with skilled nursing facilities and intermediate care facilities (ICF) are identical to what was in SB 83 as passed on July 20th by the Assembly.

Extends the repeal date from January 1, 2008 to January 1, 2010, for the Department of Developmental Services to conduct a pilot program to provide continuous skilled nursing care as a benefit under the Medi-Cal program when those services are provided as part of a federal Medicaid (Medi-Cal) waiver.

Extends the Quality Assurance fee for skilled nursing facilities and the current Medi-Cal rate methodology for skilled nursing facilities by one year. (Note: the Quality Assurance fee and the current cost-based, facility specific, rate methodology currently extend through 2007-08 and AB 203 extends it through 2008-2009. The Quality Assurance fee is levied on a daily per-bed basis equal to 6% of non-Medicare revenues and the Department of Health Care Services estimates will generate $274 million in the current 2007-2008 state budget year and $287 million in 2008-2009 state budget year. A portion of the revenue generated by the fee goes to the state general fund, but a major part of the revenues, along with federal Medicaid matching funds, pays for the cost of increased Medi-Cal payments (rates) for skilled nursing facilities. Extends the existing 5.5% cap on the annual growth in the overall Medi-Cal skilled nursing facilities reimbursement rates through the 2008-2009 state budget year.

NEXT STEPS

GOVERNOR: SB 77 (main budget bill) headed to Governor, along with other budget related bills. He will sign the main budget bill - which officially gives the State a operating budget - within the next few days - probably by the end of the week. The Governor will also issue at that time a list of the spending reductions using his "line item veto" power. The Governor promised Senate Republicans on August 1 that he would use that power to cut an additional $700 million in spending in the budget being sent to him - though he has not publicly released any information on where those cuts would come from.

LEGISLATURE: With less than 4 weeks left in the 2007 legislative session, the Legislature will now focus, along with the Governor, on major issues including health care reform. The Legislature scheduled to adjourn for the year on September 14. Senate Appropriations Committee, with its hearing Monday (August 20) to hear over 250 Assembly bills cancelled due to the budget stand off, is scheduled to hear those bills Wednesday morning (August 22). Both houses will announce which bills will move forward to the floors or which bills will be held in committee next week. (The exceptions are those bills heard in Appropriations Committee that either have little or no impact on state spending which can be reported out to the floor this week).
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STATE CONTROLLER: As soon as the Governor signs the main budget bill (SB 77), expected within the next few days, the State Controller hopes to reduce the time it takes to process claims from 15 days to 7 to 10 days and 1 to 3 days for certain other payments. He has already asked state agencies and departments to prioritize payments so that critical services - including nursing facilities, intermediate care facilities, day care providers and others are paid as soon as possible.

The California Disability Community Action Network, is 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 eventually federal), local public policy issues.