Governor Brown Releases 2018-19 Budget Proposal

Last week the Governor released his 2018-19 budget blueprint. The budget projects continued robust revenue for 2018-19 and directs revenue increases into the Rainy Day Fund (the budget reserve) to ameliorate the Governor’s prediction for an upcoming recession. The budget notes that poverty continues to be a problem for many Californians and that the lack of affordable housing is a major cause for poverty.  Below is a summary of Governor Brown’s proposed 2018-19 budget and the potential impacts specifically to people with IDD.  This is the first round of the budget, to be followed up by a May Revise and several legislative committee hearings.

Regional Center Services

The proposed budget estimates regional center caseload growth from 317,837 clients to 333,024 clients.  The budget proposes $330 million increases in regional center purchase of services; of that amount $178.5 million is due to increases in the state minimum wage.

The Governor proposes to reinstate the 14 day uniform holiday schedule for all regional center providers, to take effect July 1, for a savings of $5.6 million.  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.

Developmental Centers

The number of residents in the remaining developmental centers is projected to decrease to 537 by July 2018, and 361 by June 30, 2019.  Sonoma Developmental Center is scheduled to close December, 2018.  Overall funding for the developmental centers is proposed to decrease from $495 million to $376 million; however, there is a $28.8 million increase due to 42 people not transitioning within the previously projected timeframe, bargaining unit agreements for staff, and one-time costs for security of the properties once they close.

SSI/SSP

The Governor proposes to pass through the 2.6% federal increase to SSI, but does not propose any new funding to the state grant, SSP.  The budget actually reduces state spending by $34 million due to decreases in caseload projections. Cuts to state funding dating to 2011 have never been restored and have been a contributing reason to California’s high poverty rate.

The Budget includes $2.8 billion General Fund for the SSI/SSP program. This represents a 1.2-percent decrease ($34.9 million) from the revised 2017-18 budget. 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 disabled persons, 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.

IHSS

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.

Healthcare

Home Health Rate Increase – The Budget includes $64.5 million ($31.6 million Proposition 56 funds) 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.

Restoration of Medi-Cal Dental Benefit – The Budget includes $212.2 million ($79.5 million General Fund) in 2018-19 to restore full dental services for adult beneficiaries in the Medi-Cal program, effective January 1, 2018.

Children’s Health Insurance Program (CHIP) Reauthorization – Effective October 1, 2015 through September 30, 2019, the Affordable Care Act (ACA) increased the program’s federal share of cost from the historical rate of 65 percent to 88 percent. The Budget includes costs of $640.2 million in 2017-18 and $961.9 in 2018-19 reflecting an 88-percent federal share through December 31, 2017, and 65 percent as of January 1, 2018. The Budget assumes the program continues at a 65-percent federal share effective January 1, 2018 as a prudent placeholder if the 88-percent enhanced funding is

not reauthorized. Congress passed legislation to temporarily fund CHIP. The May Revision will reflect the temporary federal funding authorized after the Governor’s Budget was finalized.

Special Education

$10 million

technical assistance for local education agencies (aka school districts) to improve student outcomes as part of a statewide system of supports

$100 million to increase and retain special ed teachers

$50 million – residency grant program (1 year intensive training program)

$50 Million – competitive grant to LEAs to develop or implement new, or expand existing locally identified solutions to address local need for recruiting and retaining special ed teachers

Education Expansion Program, providing $125 million one-time Proposition 98 General Fund and $42.2 million one-time federal TANF through a competitive grant program to increase the availability of inclusive early education and care for children aged 0 to 5 years old, especially in low-income areas and in areas with relatively low access to care. Grant recipients will commit that all children benefiting from grant funds, especially those with disabilities, have access to appropriate settings that support their educational and developmental growth.

Housing

The Governor provided significant additional resources to the Department of Housing and Community Development to implement the bills in the 2017 Housing Package. The success of the package will rest on robust implementation efforts at both the state and local levels.

No additional funding is proposed for affordable housing.