Governor Newsom’s 2019-20 January Budget Proposal
Thursday, January 10th, 2019,Governor Newsom released his 2019-20 budget blue-print. The budget projects continued robust revenue for 2019-20; however, the gover-nor’s budget hedges against a recession by proposing less than 20% of new spending be used for ongoing costs. Below is a summary of the governor’s proposed budget and its impact on Californians with intellectual and developmental disabilities and their families:
Regional Center Services
The proposed budget estimates regional center caseload growth from 333,094 clients to 349,606 clients.The Governor’s Budget proposes $7.4 billion ($4.5 billion GF) for the Regional Center system, an increase of $506.2 million ($362.3 million GF) as compared to the updated current year budget. The increase is mainly a result of caseload adjustments of $402.2 million ($302.5 million GF) in regional center operations (OPS) and purchase of services (POS) as follows: OPS increase of $31.3 million ($24.0 million GF); POS increase of $370.9 million ($278.5 million GF). Other budget proposals include:
- The Governor did NOT propose to eliminate the 14 day statewide uniform holiday schedule (also referred to as a mandatory furlough schedule), meaning that the furlough days would still be effective July 1, 2019. Note: The Arc California has sued the Department of Developmental Services on basis that this cut is a reduction in rates that has not been approved by the federal government. We are waiting on a decision from the courts.
- $76 million to reflect the estimated full-year cost of the January 1, 2019 California minimum wage increase from $11.00 to $12.00 per hour, and $83to reflect the estimated half-year cost of the January 1, 2020 California minimum wage increase from $12.00 to $13.00 per hour.
- Half-day billing is proposed to continue in 2019-20.
- $15 million for HCBS transition grants proposed to continue for 2019-20.
- DDS proposing to award a $3 million contract for assistance with on-site as-sessments of providers to assess HCBS compliance.
- $5.3 million to expand acute crisis and mobile crisis services in the community in recognition to the closure of the developmental centers and the increased need for these services.
- $8.1 million to support the reorganization of departmental headquarters.
- $5.4 million to reduce regional center caseworker caseload ratios for consumers with specialized medical and behavioral needs.
- $4.5 million one-time to expand the development of community crisis housing specifically for children.
- $3.8 million for the increased monitoring of Enhanced Behavioral Support Homes and Community Crisis Homes.
- The Governor briefly mentioned the regional center provider rate study saying that would be a future issue the State would be looking at in the coming months. The Governor’s budget summary does include a reference to the rate study as follows: “An additional focus on community services and associated reforms is expected given a statutorily required developmental services rate study that is due in March 2019. Discussions regarding rates must be done in conjunction with transparency and accountability reforms.”
The number of residents in the remaining developmental centers is projected to de-crease to 323 by July 2019, and 292 by June 30, 2020. Sonoma Developmental Center entered warm shutdown inDecember, 2018. Overall funding for the developmental centers is proposed to decrease from $394 million to $305 million. There is a one-time proposed cost of $5 million for deferred maintenance.
The budget includes no increase for the State Supplemental Payment (SSP), which was reduced in the Schwarzenegger Administration to the federal minimum of $156 a month. SSI benefits are determined by the Federal government.
The Governor proposes to make permanent the “hold harmless” programs created in the 2018-19 budget, which was previously only funded for two years. These programs were necessary when the state repealed state law that barred SSI recipients in Califor-nia from receiving federal SNAP benefits (known as CalFRESH in California). California was the only state that did not permit SSI recipients to receive SNAP. In ending the bar on SNAP, however, it is estimated that about 40,000 families would lose all or some of their current SNAP benefits when SSI income was included in determinations for their SNAP benefit amount. To prevent some low income households from becoming poorer, the Governor and the Legislature agreed to create two programs to backfill the loss of SNAP funds, but only provided two years of funding. With this budget, Governor Newsom has made that funding permanent. This was one of the highest priorities for SSI advocates in the budget in 2019.
The budget proposes to restore the 7-Percent Across-the-Board Service Hours Reduc-tion—Due to enactment of the managed care organization tax, the 7-percent across-the-board reduction in IHSS service hours was restored for the duration of the managed care organization tax. Under current law, the managed care organization tax will expire on July 1, 2019. While the Budget does not assume an extension of the tax, it does propose to restore the 7-percent reduction effective July 1, 2019. The cost to restore the 7-percent reduction is estimated to be $342.3 million General Fund in 2019-20. This will protect services for vulnerable individuals served by IHSS.
Electronic Visit Verification—Federal law requires states to implement an electronic visit verification system for personal care services by January 1, 2020, and for home health care services by January 1, 2023. Failure to comply with the electronic visit verification requirement would result in an escalating fiscal penalty in the form of a percentage point reduction in federal matching funds. To comply with federal law, the Budget includes $34.9 million ($5.3 million General Fund) to implement an electronic visit verification solution and enhancements to the Case Management, Information and Payrolling System for personal care services.
DEPARMTNET OF REHABILITATION
Includes $5 million for the Vocational Rehabilitation program at DOR, which will raise uniform fee-for-services rates for community rehabilitation program providers by 10 per-cent and adjust rates with a wage component to account for state minimum wage in-creases.
Traumatic Brain Injury Program—The Budget includes $1.2 million General Fund in 2019-20 for the Department of Rehabilitation’s Traumatic Brain Injury program, which provides specialized services and supports through local entities to individuals who have suffered a traumatic brain injury.
The Budget includes funding for universal preschool for all income-eligible four-year-old children in the state, phased in over a three-year period. This funding will allow state preschool providers to offer full-day/full-year care to better accommodate working parents. The Budget proposes the development of a plan to achieve universal preschool for all children in California, including new revenue options to support increased enrollment. This plan will also include a framework to implement a comprehensive, high-quality child care system in the state—including simplifying the system, increasing access, and reflecting the principle of shared responsibility among government, businesses, and parents. The Budget includes $500 million one-time General Fund to build child care infrastructure, including investing in the education of the child care workforce. The Budget proposes to reduce health disparities in early childhood. The Budget includes additional funding to improve the detection of adverse childhood experiences and increase developmental screenings provided to children in Medi-Cal. The Budget also includes funding to expand existing home visiting programs with innovative new approaches to reach low-income young mothers, and an augmentation to the Black Infant Health program.
ADVERSE CHILDHOOD EXPERIENCES (ACES) AND DEVELOPMENTAL SCREEN-INGS The Budget proposes $45 million ($22.5 million federal funds and $22.5 million Proposition 56 funds) to the Department of Health Care Services for ACEs screenings for children and adults in the Medi-Cal program. Beginning no sooner than January 1, 2020, this proposal provides ACEs screenings to children and adults under age 65 at least once every three years, and supports increased referrals to appropriate services depending upon screening results. The Department of Health Care Services will work with stakeholders to develop a screening tool for children and will utilize an existing assessment for adults. The Budget proposes $60 million ($30 million federal funds and $30 million Proposition 56 funds) for the Department of Health Care Services to in-crease developmental screenings for children. Developmental screenings assess a child’s educational, social, and emotional development and are recommended for children at nine months, 18 months, and 30 months of age.
Expands full-scope Medi-Cal to all income-eligible undocumented adults up to age 26. Two years ago, California expanded full-scope Medi-Cal to all income-eligible children up to age 19, regardless of immigration status. The Governor’s budget proposal pro-vides $260 million ($196.5 million General Fund) to extend Medi-Cal eligibility to all in-come-eligible undocumented adults up to age 26 beginning no sooner than July 2019, dependent on system changes and network readiness. This expansion is expected to provide full-scope coverage to approximately 138,000 undocumented adults in the first year.
Improves affordability assistance in Covered California for families with incomes be-tween 250-600% federal poverty line (FPL): The Governor proposes to increase the size of the subsidies for families with incomes between 250-400% FPL and make new subsidies available for families with incomes between 400 to 600% FPL. The affordability assistance excludes lower income families with incomes up to 250% FPL, many of whom struggle to pay current Covered California premiums, or go without coverage.
Institutes a state individual mandate: To pay for increased affordability assistance for families, the budget proposes to reinstate the individual mandate at the state level, which would negate the federal repeal of the individual mandate in California. The individual mandate would apply to many families not eligible for additional subsidies (incomes below 250%).
Carve-out pharmacy services as a fee-for-service benefit: The budget proposes to tran-sition all pharmacy services for Medi-Cal managed care to a fee-for-service benefit to provide the state with additional negotiating power. Annual savings are expected to be in the hundreds of millions, starting in fiscal year 2021-22.
Proposition 56 (tobacco tax) funding: The budget proposal continues to include supplemental payments and rate increases for physicians, dentists, women’s health services, intermediate care facilities for the developmentally disabled (ICF/DD), HIV/AIDS waiver services, home health agencies, private duty nursing, and pediatric day health care. The estimated total funding for these supplemental payment and rate increases for FY 2019-20 is $3.174 billion ($769.5 million Proposition 56 funds). New Proposition 56 funds include:
- Early developmental screening for children ages 0-21 ($60 million total, $30 mil-lion Proposition 56 funds).
- Additional $50 million in Proposition 56 funds for family planning services in the Medi-Cal program.
The budget proposes $576 million in Proposition 98 General Fund ($186 million is one-time) to support expanded special education services in school districts with a high concentration of special education students. The budget also includes $750 million one-time General Fund to address barriers to full-day kindergarten. About one quarter of students enrolled in kindergarten do not have access to a full-day kindergarten program.
Families & Workforce
Earned Income Tax Credit (EITC): The budget proposes to significantly increase eligibility and benefits for the state earned income tax credit program. The current program provides about $400 million in EITC
to two million households. Under the proposal released today, the size of the current program would roughly double. A new program for low-income Californians—the “Working Families Tax Credit”—includes an additional $500 credit for families with children under the age of six. The proposal also increases the maximum eligible earned income so that workers working up to full-time employment at the 2022 minimum wage of $15 per hour will be eligible for the credit.
CalWORKs: The budget proposes to end deep poverty for families in the CalWORKs program. The proposal would increase CalWORKs grants beginning this October from $785 a month to $888 a month for a family of three, at a full year cost of $455 million. This increase in the maximum grant amount by family size would bring the grant to 50 percent of the federal poverty level. Only New Hampshire provides a TANF (Temporary Assistance for Needy Families) grant that exceeds 50 percent of the federal poverty level, according to the Center on Budget and Policy Priorities.
California’s 2018-19 Approved Budget
June 27th, 2018 – California Governor Jerry Brown signed into law the 2018-19 State Budget. The intellectual and developmental disability community will benefit in two major areas: Investments made to SSI/SSP and special education. The Budget, however, lacks the needed investments into community services and supports. A summary of the impacts this budget will have on the community is below:
Regional Center Services
The budget estimates regional center caseload growth from 317,837 clients to 332,738 clients. The budget includes $330 million increases in regional center purchase of services; of that amount $178.5 million is due to increases in the state minimum wage. Total budget for regional centers is proposed to increase to $6.9 billion in 2018-19 from $6.35 billion in 2017-18. Specific items include:
- $25 million provider rate increase for only one year. Money will be used as a “bridge” to help fund services until a new rate study is released in 2019;
- No restoration of social recreation or camping services (these critical services were eliminated during the recession and advocates have fought hard to restore them and it was approved by both the Assembly and Senate, but it was eliminated in last minute negotiations with the Governor);
- Implementation of the 14-day mandatory furlough schedule will be delayed for one year;
- Half-day billing (essentially a cut to provider reimbursement rates) could be implemented for a loss of $1.4 million (this statute has existed since it was enacted in 2009; however, due to The Arc California’s lawsuit the state has not recently enforced it. The Governor’s budget did not suggest that they would begin to enforce it again but it could be possible that they would try);
- $200,000increase to provide supplemental payments to ICF-DDs consistent with a corresponding Medi-Cal rate increase;
- $300,000 increase to Kern regional center for management oversight and accountability;
- $1.5 million for Best Buddies program;
- Requires each regional center to include on its Internet Web site any procedures and assessment tools used by the regional center to determine the level of respite services needed by each consumer (this is in response to last year’s budget change which removed the cap on respite services that was enacted in 2009, and reports that some regional centers are not updating their respite policies as a result);
The number of residents in the remaining developmental centers is projected to decrease to 534 by July 2018, and 323 by June 30, 2019. Sonoma Developmental Center is scheduled to close December, 2018. Overall funding for the developmental centers decreases from $485 million to $385 million, including:
- $10 million for the Department to address deferred maintenance issues at the Porterville developmental center.
SSI/SSP recipients received a big win in this year’s Budget. The Budget includes $2.8 billion General Fund for the SSI/SSP program. The average monthly caseload in this program is estimated to be 1.3 million recipients in 2018-19, a slight decrease from the 2017-18 projection. The SSI/SSP caseload consists of 70 percent people with disabilities, 28.6 percent aged, and 1.4 percent blind.
- Effective January 2018, maximum SSI/SSP grant levels are $910 per month for individuals and $1,532 per month for couples. The federal cost of living adjustments based on the current Consumer Price Index growth factors are 2 percent for 2018 and a projected 2.6 percent for 2019. As a result, the maximum SSI/SSP monthly grant levels will increase by approximately $20 and $29 for individuals and couples, respectively, effective January 2019. CAPI benefits are equivalent to SSI/SSP benefits, less $10 per month for individuals and $20 per month for couples.
- SSI/SSP Cashout Repealed – The budget repeals state law that cashed out eligibility for federal SNAP (CalFresh) benefits in exchange for a $10 increase in the SSI/SSP grant amount. By ending cashout beginning in June, 2019, the state will permit SSI recipients to apply for CalFresh. It is estimated that as many as 375,000 SSI recipients may become eligible for CalFresh. Benefit levels will be based on a table developed by DDSS in consultation with stakeholders.
- Transitional Nutrition Benefit (TNB) Program – The budget establishes a second new program to “hold harmless” households that will lose all eligibility for CalFresh due to the end of cashout. CalFresh households which include one or more SSI recipients will now have the SSI income considered when calculating CalFresh eligibility and benefit amounts. It is estimated that over 7,000 households will lose all CalFresh due to the end of cashout. The TNB will provide a monthly supplement to the CalFresh amount so long as the family remains on CalFresh when cashout ends and the SSI recipient remains in the household.
- State Supplemental Payment Cost of Living Adjustment (COLA) – The budget restores the COLA for the state portion of the SSI/SSP grant beginning July 1, 2022 based on the California Necessities Index. The SSP COLA was suspended in 2009 during the recession and only one COLA has been provided since that time.
IHSS Provider Paid Sick Leave – The Budget includes $29.9 million General Fund to reflect implementation of eight paid sick leave hours for IHSS providers beginning July 1, 2018. Also, no later than February 1, 2019, would require the State Department of Social Services, in consultation with the Department of Finance and stakeholders, to reconvene the paid sick leave workgroup for in-home supportive services. The bill would require the workgroup to discuss how paid sick leave affects the provision of in-home supportive services and to consider the potential need for a process to cover an in-home supportive services recipient’s authorized hours when a provider should need to utilize his or her sick time. The bill would require the workgroup to finish its work by November 1, 2019.
Home Health Rate Increase – The Budget includes $64.5 million for a 50-percent rate increase and associated increases in utilization for home health providers that provide medically necessary in-home services to children and adults in the fee-for-service system or through home and community-based services waivers.
The restoration of full dental services for adult beneficiaries in the Medi-Cal program became effective January 1, 2018. This year’s budget includes other major investments that will specifically benefit the special needs community:
- Allowances for Additional Time for Individuals with Special Health Care Needs: Based on stakeholder feedback, dental providers will be reimbursed for additional time needed by individuals with special health care needs. The associated supplemental payment will be 60 percent of the Schedule of Maximum Allowances(SMA).
- Supplemental payment categories include restorative, endodontic, prosthodontic, oral and maxillofacial, adjunctive, and visits and diagnostic services. These payments will be maintained for 2018/19 at 40 percent increase of the SMA.
The budget includes several investments into special education funding in California, including funding to recruit and retain special education teachers and capacity building for early care. See The Arc California’s June 25th Monday Morning Memo for detailed information. Approved budget items are below:
- $167.2 million in Proposition 98 funding for the Inclusive Early Education Expansion program. Under this program grants will be provided to local educational agencies (LEAs) to increase access to subsidized early care and education programs for children from ages zero to five.
- $10 million in one-time funding to establish the Inclusive Early Care Pilot Program. Under this program, county offices of education may apply to receive grants to increase access to early care and education programs for children with exceptional needs, including severe disabilities, from ages zero to five.
- $50 million in one-time Proposition 98 funding for teacher residency programs for special education teachers and another $50 million in one-time funding to recruit and retain special education teachers.
$1.5 million tocreate a 3-year pilot program in the Counties of Sacramento and Los Angeles for the purposes of increasing long-term employment opportunities for young adults with autism and autism spectrum disorder. The “Breaking Barriers in Employment for Adults with Autism Pilot Program” requires the Workforce Investment Board to (a) Work with an experienced nonprofit organization on the outreach, selection, training, and compensation of young adults with autism to participate in the program.
(b) In collaboration with stakeholders, create a manual to train employers in building workplace capacity for the targeted population.(c) Once the manual is developed implement free employer trainings in Sacramento and Los Angeles counties based on the manual.
Eligible uses of pilot program funds include, but are not limited to, stakeholder outreach, student trainings, employer trainings, administrative resources, and stipends for participating young adults.