Tag: California Budget

California Faces $68 Billon Dollar Deficit, while Californians with Developmental Disabilities and their Families Struggle

California’s budget deficit could hit a record $68 billion in the 2024-25 fiscal year, according to a report released last week from the non-partisan Legislative Analyst Office (LAO). The projected deficit is a result of a steep decline in tax revenue and comes after two years of record surpluses due to federal COVID-19 relief funding and large gains by California’s wealthiest.

As mentioned in the report, a major cause of the downturn is that the number of unemployed workers in California has risen nearly 200,000 since the summer of 2022. This has resulted in a jump in the state’s unemployment rate from 3.8 percent to 4.8 percent. This rise in unemployment has acutely impacted Californians with developmental disabilities and their families, who continue to struggle to find supports and services due to the lack of staff at service providers and regional centers. These state funded programs can only hire if the state provides adequate funding to do so, and an increase in reimbursement rates scheduled for July 2024 will help to employ more direct support staff – yet it will still require more rate increases to be truly competitive.

If the deficit projections are actualized, then the Legislature and Governor will have to use funds in the state’s rainy-day account, currently at $24 billion, and look at other options to balance the budget and jumpstart the economy. More employed Californians will be a key to turning around the state’s budget woes, and with investment into our developmental services system, service providers and regional centers will be ready to hire in a competitive employment market.

Developmental Services Spared From Cuts in Governor Newsom’s May Revise Budget

Friday, May 12, Governor Gavin Newsom released his May Revision proposal for the state budget, which includes proposals for spending on critical services such as regional centers, In Home Support Services (IHSS), Medi-Cal, and Education. After two years of unprecedented growth and a $100 billion surplus last year, the state faces a $32 billion shortfall this year due to state revenues dependency on capital gains, and advocates were concerned that the Governor may propose cuts or delays to investments in critical services and supports. The proposed budget, however, includes no cuts and a few new investments, including:

  • Service Provider Rate Reform: Independent Living Services—The May Revision includes $15 million ($8.5 million General Fund) beginning January 2024 to adjust Independent Living Services rate assumptions to align the types of services provided with more equivalent occupations, such as teachers, social and human service assistants, and rehabilitation counselors. Resources increase to an estimated ongoing $60 million ($34 million General Fund) beginning in 2024-25.
  • Coordinated Family Support Services—The May Revision includes $18 million ($10.8 million General Fund) to continue funding the Coordinated Family Support pilot program through June 2024, which is currently funded through the Home and Community-Based Services (HCBS) Spending Plan. The program is designed to assist adults living with their families in coordinating the receipt and delivery of multiple services, including generic services.
  • Cost-Sharing and Fee Programs—The May Revision continues suspension of the Annual Family Program Fee and the Family Cost Participation Program until December 31, 2023, to allow regional centers to restart assessments. Prior to the 2022 Budget Act, both programs had been suspended during the COVID-19 Pandemic through department directive. DDS conducted stakeholder discussions and will report on those conversations as part of the May Revision.

The May Revision summary and detailed version can be found here.

The May Revision highlights for the Department of Developmental Services (DDS) can be found here.

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