Tag: State Budget

California’s 2025-26 Budget: What It Means for People with Disabilities

Governor Gavin Newsom’s initial January budget proposal was a relatively status quo budget; however, his May Revise budget proposed drastic cuts to important programs for Californians with disabilities, including Medi-Cal and In-Home Supportive Services (IHSS). According to the Governor and the Legislature, this year, California faced a significant budget shortfall driven by three key factors:

    • First and foremost, the policies of the new federal Administration – in particular the tariff increase policies – have caused economic forecasts throughout the world to be significantly downgraded. The federal policies have greatly impacted California’s economic forecast as well, with the May Revision projecting slower growth and the Newsom Administration indicating that federal economic policy changes have reduced state General Fund revenues by $16 billion. The state budget condition may be further adjusted downward based on additional adverse federal policies in the coming weeks and months, such as major cuts to Medicaid.
    • Second, to a modest degree, the baseline costs of key programs – particularly Medi-Cal – have grown faster than projected.
    • And third, to a smaller degree, the devastating LA fires have had a negative economic impact and resulted in increased state spending.

In response to Governor Newsom’s proposed cuts, the Legislature successfully pushed back against most of the drastic reductions to health and human services programs. The final state budget signed by the Governor represents a negotiated compromise. In the end, the proposed 2025-26 California state budget plan includes $228 billion of spending from the state’s General Fund in 2025-26, an estimated $89 billion of special fund spending, and $4 billion of spending from bond accounts. In addition, as of the May Revision, $174 billion of federal funds spending was projected to flow through the state treasury, but that amount may change significantly based on actions by Congress and the White House.

The Arc & UCP California Collaborative has provided the following detailed summary of California’s enacted 2025-26 budget and its impact on people with intellectual and developmental disabilities and their families:

REGIONAL CENTER SERVICES

    • Service Provider Quality Incentive Payment: Approves the May Revision proposal regarding the Provider Mandates for Quality Incentive Payment Eligibility. Includes a reduction of $221.7 million General Fund in 2026-27 and ongoing associated with requiring compliance with Electronic Visit Verification, financial review/annual audits, and Home and Community-Based Services (HCBS) rules as a pre-condition for eligibility of the quality incentive component of the rate models.
    • Rate Model Implementation, Hold Harmless: Approves the May Revision proposal regarding the Service Provider Rate Reform Hold Harmless Provision. Approves a reduction of $75 million General Fund in 2025-26, and a decrease to reimbursements by $37,952,000, one-time to end service provider rate reform hold harmless policy as of February 28, 2026, instead of June 30, 2026.
    • Self-Determination Program: Approves a reduction of $22.5 million General Fund in 2025-26, and $45.5 million General Fund ongoing by making various changes to the Self-Determination Program, including, among others, establishing the participants’ individual budget generally based on the services authorized instead of being based on purchase of service expenditures, requiring a regional center to certify that participants’ spending plans satisfy certain criteria, and requiring the department to establish statewide standardized processes and procedures for the program, with community input, no later than March 1, 2027.
    • Tailored Day Services: Existing law requires the hourly rate for the tailored day service option to be calculated in a specified manner. The budget will end use of the above-described calculation methodologies on June 30, 2025, and, commencing on July 1, 2025, would require the hourly rate for the tailored day service option for vendored programs to be set by the department and posted on its internet website.
    • Direct Support Professional Training (aka DSP University): Rejects the Governor’s May Revision proposal to eliminate the Regional Centers Direct Service Professional Workforce Training and Development Program.
    • Repeal of Regional Center Monthly Parental Fee: The budget repeals the existing monthly parent fee, which currently requires the department to assess a monthly fee to parents of children under 18 years of age who are receiving 24-hour out-of-home care services through a regional center or who are residents of a state hospital when the family’s gross income is above 200% of the federal poverty level, as specified.
    • Supported Employment: Existing law sets the hourly rate for supported employment services provided to consumers receiving individualized services and for group services at $36.57 and requires job coaching hours for group services to be allocated on a prorated basis between a regional center and the Department of Rehabilitation when consumers are served in the same group. Existing law also requires that a new work activity program receive the statewide average rate, as determined by the department. The budget removes the hourly rate for both supported employment services and group services and would instead require the department to set a rate and post the rate to its internet website. The bill would also remove the requirements that job coaching hours for group services be allocated on a prorated basis and that a new work activity program receive the statewide average rate, and would instead require that the program receive the rate posted on the department’s internet website.
    • Health & Safety Waiver Assistance: Approves the May Revision proposal regarding Health and Safety Wavier Assistance. Approves a reduction of $3.0 million General Fund in 2025-26, with reimbursements to decrease by $1,412,000, and ongoing for resources related to providing consumers and families assistance in applying for health and safety waivers. Approves associated, corresponding trailer bill language.

MASTER PLAN ON DEVELOPMENTAL SERVICES

This bill would require the Master Plan for Developmental Services Committee to meet at least 2 times each year, as specified, and would set forth the information to be included in the initial report and recommendation updates, including, among other things, a narrative summary of the master plan committee meetings.

IN-HOME SUPPORTIVE SERVICES (IHSS):

    • Approves $3.3 million and adopts trailer bill language that would require the Department of Human Resources, in collaboration with the State Department of Social Services, to appoint a statewide bargaining advisory committee to review the full cost of care for IHSS provided through the IHSS program under a statewide collective bargaining model. Authorizes $3.3 million for funding one-time from the General Fund.
    • Rejects the May Revision proposal regarding In-Home Supportive Services (IHSS) Provider Overtime and Travel Hours.
    • Rejects the May Revision proposal regarding In-Home Supportive Services for Undocumented Adults.
    • Modifies the May Revision Proposal to require the asset test limit as it was in the prior interim step, which permitted assets up to $130,000 for individuals and $195,000 for couples, that was in effect from July 1, 2022 to December 31, 2023, starting January 1, 2026, consistent with the same change in Medi-Cal under the Department of Health Care Services. This results in savings for IHSS of $15.96 million in 2025-26, $220.3 million in 2026-27, and $317.2 million in 2027-28 (all General Fund) and ongoing. This change would apply to all IHSS consumers, as IHSS is a Medi-Cal benefit.

MEDI-CAL

    • Freezes enrollment in Medi-Cal for individuals with undocumented immigration status, ages 19 and older, beginning January 1, 2026. Includes a three-month grace & cure period allowing for re-enrollment. Individuals already enrolled in the program cannot “ageout.”
    • Implements a $30 per-month Medi-Cal premium, effective July 1, 2027, for individuals with Unsatisfactory Immigration Status, ages 19 to 59.
    • Eliminates full-scope, state-only dental coverage for Medi-Cal enrollees with Unsatisfactory Immigration Status, ages 19 and older no sooner than July 1, 2026.
    • Rejects the proposal to eliminate long-term care benefits for Medi-Cal enrollees with Unsatisfactory Immigration Status.

SUPPLEMANTAL SECURITY INCOME/STATE SUPPLEMENTAL PAYMENT (SSI/SSP) BASE GRANTS: Approves the May Revision estimates adjustments with no major changes for SSI/SSP.

HOUSING

Approves $44.6 million General Fund for 2025-26 on a one-time basis for the Housing and Disability Advocacy Program (above the $25 million base amount for this program already included in the Governor’s Budget), with budget bill language.

MISCELLANEOUS

Special Olympics: Appropriates $30 million, one-time Proposition 98 for the Special Olympics.

Click HERE to download detailed summary.

The Disability Community Prepares for Legislative Action

By Jordan Lindsey, Executive Director, The Arc of California / UCP California Collaborative

Californians with disabilities aren’t being supported to find jobs or participate in the community because there aren’t enough direct support professionals (DSP) in the workforce. Parents and family members are forced to quit their jobs as a result. Regional centers can’t hire enough service coordinators to help find additional services for the individuals they serve and their family. And the reimbursement rates that fund all of this are in desperate need of updates to ensure outcomes are aligned with incentives.

This is the backdrop for California’s developmental disability community as the 2024 state legislative season begins and Governor Gavin Newsom prepares to release his 2024-25 proposed state budget on January 10th. In response, The Lanterman Coalition, representing tens of thousands of stakeholders in California’s intellectual and developmental disabilities (IDD) community, has proposed three strategies to ensure a viable and sustainable I/DD support system. They are:

  1. Regional Center Capacity. Update and keep current regional center staff funding to bring California into compliance with federal commitments on caseload ratios.
  2. Workforce Capacity. Honor the commitment to fully implement the rate models on July 1, 2024. Update the rate models to 2024 costs (including consideration of new state wage floors for competing industries) prior to implementation. Standardize an annual adjustment so that individuals continue to have access to the direct care staff on whom they depend.
  3. Align Rate Structure with Desired Outcomes. Rate reform is underway and there are areas that need refinement to avoid unintended, potentially harmful repercussions to people with IDD. Solutions include: 1) Maintaining current billing units instead of transitioning to hourly units; 2) Developing sustainable transportation rates; 3) Incentivizing competitive individual employment; 4) Expanding affordable housing options; and, 5) Including innovative services, maintaining appropriate staff credentials, and fairly measuring outcomes.

As a member of The Lanterman Coalition, The Arc & UCP California Collaborative will closely review the proposals in the Governor’s budget and publish a summary of its impacts to Californians with disabilities and their families. Additionally, The Arc & UCP California Collaborative will work with our Coalition partners to develop an advocacy strategy that will include actions both locally and statewide.

Our voices will only be heard if there are thousands of disability advocates across the state raising their voices together. Sign up now to receive updates on this year’s actions, and be sure to share the sign-up form with your community.

Click HERE to view and download the 2024 Lanterman Coalition public policy priorities.

Legislative Analyst’s Office Releases California’s Fiscal Outlook for the 2023-24 State Budget – California Could Face a $25 Billion Deficit

By Teresa Anderson, Public Policy Director, The Arc/UCP California Collaboration

The Legislative Analyst’s Office (LAO) has provided fiscal and policy advice to the Legislature for 75 years. It is known for its fiscal and programmatic expertise and nonpartisan analyses of the state budget. Forecasting state revenues and expenditures is one of the many important functions of the LAO. Recently the LAO release the state budget forecast indicating that the state faces a $25 Billion dollar budget deficit, not adjusted for inflation, as well as ongoing deficits. Due to the fiscal uncertainty the LAO is recommending the Legislature identify recent budget augmentations that have not been distributed and consider pausing or delaying distribution. The report gives cause for concern in that the LAO points to provider rate adjustments and the effects of inflation stating, “In the Department of Developmental Services (DDS), although the Legislature recently enacted a plan to support rate models developed in a 2019 study (and updated to 2021-22 levels), under current law, providers would only receive rate adjustments based on future legislative decisions.”  The brief discusses the impact to state programs under both circumstances of whether the state automatically accounts for inflation or not and highlights the fact that there is significant variation in the mechanism used by the state to adjust for inflation such that some areas of the budget automatically adjust for inflation while others do not. The LAO Brief Considering Inflation’s Effects on State Programs can be read here: https://lao.ca.gov/reports/2022/4647/Inflation-Effects-on-State-Programs-111622.pdf

The full forecast can be read here: https://lao.ca.gov/reports/2022/4646/CA-Fiscal-Outlook-111622.pdf

 

A FUTURE IN PERIL Why California is at A Crossroads in 2019 for Supports for People with Intellectual & Developmental Disabilities

More than 350,000 Californians with intellectual and/or developmental disabilities live in California as our neighbors, classmates, coworkers, family, and friends; …

More than 350,000 Californians with intellectual and/or developmental disabilities live in California as our neighbors, classmates, coworkers, family, and friends; however, their support structure has been grossly underfunded and is failing. A state required Rate Study, due in March, 2019, may propose solutions that should be implemented; regardless,
immediate investment is needed this year.
This year alone, more than 15,000 new individuals with I/DD are expected to require services under the state’s famed Lanterman Act. At the same time, direct support staff are quitting the field or working multiple jobs due to poverty level wages; essential programs are closing throughout the state; and individuals are forced to live with inadequate supports or not supports at all.

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Instead, the state should invest to create job training opportunities, community integration programs, parent support, and a livable wage for the approximately 150,000 direct support professionals whose job is supporting Californians with I/DD.

Let us be clear—our system is in crisis and is falling apart rapidly, and there is a direct impact on people with I/DD, their families, and the workforce, which is predominantly non-white women.
“Our son, David, has autism and significant difficulties with language and needs 24-hour staff support. In the last 27 months David has had 10 different support staff. For obvious reasons, this is not an ideal situation, and recruiting for David can be challenging due to the difficulties of communicating with him. Given the low wage rate with little opportunity for advancement, finding a higher paying job is always a prime motivation for staff to move on. There is always uncertainty about when the situation will resolve, and uncertainty is difficult for David and the rest of our family. The reassurance that would come with improvements for our direct support staff and knowing that the system is stable is priceless.

– Betsy Katz, Mom and President of The Arc of California

Additionally, the federal government has set a deadline of 2022 for implementation of new guidelines that will call for more community integration of this population, further creation of job opportunities, and require more complex support from the people and programs that support people with I/DD. Not one element of this future will be cheaper than what we pay today.

This adds up to a crossroads this year: invest now or leave hundreds of thousands of Californians behind and risk losing hundreds of millions of federal dollars!

THEREFORE: We urge Governor Newsom and the Legislature to include an eight percent, across-the-board rate increase to our system as a down-payment toward the implementation of the rate study, to somewhat stabilize the system, and, if nothing else, to simply account for the rising cost of providing services over the last two years alone.

“I receive a pay check twice a month. I work 120 hours plus each pay period and I bring home only $1500 at the most, usually less than that after taxes. I can’t even afford my own place. I even started driving for lyft to make ends meet. I love my job I enjoy going to work every day but it’s not enough to survive.”
– Direct Support Professional, Solano County

Jordan Lindsey

Jordan Lindsey

Executive Director

The Arc of California

 

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