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