Budget Update

Budget Update

Overview

Proposed Budget for 2021-22

Governor Newsom Releases 2021-22 State Budget Proposal  

On January 8, Governor Newsom released his 2021-22 proposed state budget. This budget proposes $227 billion in spending.

An unexpected budget surplus and some limited Federal assistance to address costs associated with COVID-19 have lessened the need to implement threatened spending cuts. Given the improved revenue outlook, the Governor’s budget proposes to delay by one-year, a number of suspensions that were outlined in the 2020 Budget Act.

The Department of Developmental Services budget includes $10.5 billion ($6.5 billion General Fund) for the Department and estimates that approximately 386,753 individuals will receive developmental services by the end of 2021-22.

The budget also includes many provisions important to people with IDD including:

  • The establishment of a Senior Advisor on Aging, Disability, and Alzheimer’s.
  • Extension of the provider supplemental rates and the Uniform Holiday Schedule suspension through December 31, 2022.
  • Anticipated costs to address the unique needs of people with IDD during the COVID-19 pandemic.
  • Continuation of supplemental IDD payments through to January 1, 2023, in lieu of the previous sunset of July 1, 2021 at the same dollar amount.
  • The COVID-19 temporary 10 percent rate increase for some IDD service settings until the public health emergency declaration is declared over by the federal government.

The budget will now be reviewed and debated in the California legislature. We will make our advocates aware of issues and opportunities as the budget works its way through the legislative review and approval process. California must have an approved budget by July 1, 2021.

2020-21 Developmental Services Budget

These proposals from Governor Newsom will be reviewed and possibly modified by the legislature over the coming months, prior to passage of a budget in June.

The 2020-21 budget includes a net increase of 1 billion compared to 2019-20, which is largely due to the projected increase in population to be served by regional centers.

  • The estimated 2021 population is 368,622, reflecting an increase of 18,575, or 5.3%. including those receiving Early Start services (birth to 3 years) and active regional center clients with diagnosed developmental disabilities.
  • The budget proposes to provide $16.5 million to provide a lower caseload ratio for clients 3-4 years old. Unfortunately the budget for service coordinators is based on the salaries set in 30 years ago and will not actually cover the cost of staffing increases to achieve this caseload ratio.
  • The Purchase of Services budget will increase by $420.3 million or 6.49%) due to population and expenditure growth.
  • $206.2 Million increase to implement service provider supplemental rate increases which were approved last year (effective January 2020) and 18 Million to provide a rate increase for three additional services that were excluded in the prior year – early start specialized therapeutic services, independent living services, and infant developmental program (effective Jan. 2021).
  • 103.8 million to implement the 2020 minimum wage increase to 13.00/hr through December.
  • $120.3 million to implement the 2021 minimum wage increase to $14.00/hr as of Jan. 2021..

The 2020 Governor’s Budget also included the announcement that the Uniform Holiday Schedule for service providers will continue to be suspended, with the new projected sunset date of December 31, 2023.

For more information, view the DDS 2020 Governor’s Budget Highlights on the DDS website.

2019-20 Developmental Services Budget

January 2020: Updates to the 19-20 Developmental Services Budget

The 2019-20 Budget is increased $5.9 million to cover the cost of minimum wage increases from $12.00 to $13.00 per hour effective Jan. 1 2020. However the total Regional Center Budget received a net decrease of $63 M due to January 2019 minimum wage increases coming in lower than originally estimated.

June 2019: The Budget Conference Committee and Newsom Administration came to agreement on the final Budget deal for fiscal year 2019/20, which included the following compromise decisions for developmental services:

  • Provider Rates: an additional $125 million will be added in FY 19-20 and $150 million in 20-21 for “broad-based” provider increases that will begin 1/1/20 and sunset 12/31/21. See DDS chart of temporary rate increases. (DDS expects to implement a full rate reform package by December 2021).
  • In response to extensive advocacy efforts, some service providers will receive an increase of about 8.2%, while others will receive significantly less, and – we are very disappointed that some service provider categories, such as Infant Development Programs, will not receive any increase at all – on the basis of the recent Burns and Associates rate study.
  • Suspended Services: The committee did not follow the Senate and Assembly Budget Committee’s plan, and did not restore social recreation and camp services, nonmedical therapies, and certain educational services that were cut during the recession.
  • “Minimum Wage Quirk”: No action taken to provide rate adjustments to service providers in areas with local minimum wage that is higher than the state minimum wage.
  • Uniform Holiday Schedule: As proposed by the Governor, the Uniform Holiday Schedule, developed as a cost savings during the recession, will be suspended until 1/1/22, but not repealed.
  • Half-Day Billing: This provision from the recession was not repealed.
  • SSI/SSP: There will be no SSP (State Supplemental Payment) Cost of Living Increase

The Legislature previously voted to also approve the following items that had been proposed by the Administration.

  • Early Start Co-Payments: Regional centers will be able to pay for copayments, coinsurance, and deductibles for Early Start children regardless of family income.
  • Crisis Homes For Children: Three community crisis homes for children will be developed, which is a model that thus far has not been available to them.
  • HCBS Final Rule: $3 million was approved for DDS to hire a contractor to visit community settings to determine whether they comply with the HCBS Final Rule integration expectations.
  • Foster Youth Trauma-Informed Systems of Care: Funding for regional center Operations was approved to allow for greater coordination of care for multisystem children.
  • Specialized Caseload Ratios for Regional Centers: Approximately 50 service coordination positions will be created statewide for caseload ratios of 1:25 for those with the most intensive service coordination needs.
  • Family Home Agency Oversight: Funding was approved for regional center Operations to allow for greater monitoring of Family Home Agency services.
  • Specialized Home Monitors: Funding was approved for regional center Operations for nurses and behaviorists to monitor high-level residential facilities.

June 7, 2019
We are in the final week of budget deliberations by the Budget Conference Committee.
Read Gavin Newsome’s First Budget Deal is Near. Here’s What to Watch For

Read Governor, Help Our Most Vulnerable Citizens, by Assembly Member Chris Holden

“No, there have not been miracle cures for these disabilities. Rather, we have among us miracle workers in the form of local men and women who provide the structure, support, coaching and mentoring that empower the people they serve to achieve lives of meaning and purpose. These miracle workers are employed by local community- based organizations that receive their funding from the state. These groups have transformed California’s system of support for its most vulnerable residents, and we should be proud of this successful public policy. But we cannot feel proud of the way we have let support for these community organizations and the people they employ slip behind in the past 20 years.”

Developmental Services Budget decisions that differed between The Senate and the Assembly are now being reviewed by the Budget Conference Committee, to arrive at a compromise for the final budget that will be sent to both houses for approval by June 15th.

  • The Assembly’s budget rejected the Governor’s May Revise of targeting specific services for an average 18% increase, and instead use the same total amount of increase proposed in the Governor’s May Revise of approximately $170 Million ($104 Million General Fund – meaning the amount the state must pay which combines with Federal dollars to make the total amount) and make it an across-the-board increase of about 5.7% starting January 1, 2020.
  • This is in contrast to the Senate’s action which approved a motion to include a minimum of an 8% increase to all rates that otherwise would have less than an 8% increase as proposed in the Governor’s May Revise.
  • Click here to see a table summarizing the differences between the Assembly and Senate budget actions.
  • Both houses voted to restore recession era cuts, including restoration of Social Recreation and Camp funding ($14.8M GF), repeal of Half-Day Billing ($1.6 Mil GF) and the Uniform Holiday Schedule ($30.1 Mil GF)
  • Additionally, the Assembly passed $5 Million for safety net services for clients with mental health needs while the Senate did not include it in their budget.

May 23, 2019
This afternoon, the California State Senate unanimously approved SB 412 (Stone), a bill sponsored by ARCA to repeal two fees. Also called “disability taxes,” they act as artificial barriers to services for children and families.

Under current law, a program called the “Family Cost Participation Program” requires regional centers to pay for less than a child needs for respite, daycare, and camp (now suspended), based on family income. Families are expected to make up the difference. A separate, income-based fee program called the “Annual Family Program Fee” charges parents of children receiving other services.

The Family Cost Participation Program goes back to 2004. During the Great Recession, it was expanded to include Early Start, and the Annual Family Program Fee was also implemented. They were part of over $1 billion in cuts and funding reductions forced on the developmental disabilities services system. While California’s economy has rebounded, many cuts, including these, remain in place.

Since the fees were created to raise money for the state during the Recession, they are, essentially, taxes on disability. SB 412 by Senator Jeff Stone repeals these disability taxes. By doing so, it removes an artificial barrier to critical services for people with developmental disabilities and their families.

More information about this bill is available online

Thursday, May 16, 2019
In dramatic fashion the State Senate Budget Subcommittee #3 voted to approve an 8% spending increase for services and supports for Californians with intellectual and developmental disabilities (IDD), adopting a request pushed this year by people with disabilities, families, direct support professionals, service providers, and regional centers throughout the state.

In addition to the rate increases, the Committee also voted to adopt several proposals that advocates have highlighted are impacting the IDD community – many of them cuts that were made during the Great Recession. Those adopted proposals include:

  • Restoration of Social Recreation and Camp services;
  • Elimination of the 14 day mandatory holiday schedule, and removal of the sunset language proposed in the Governor’s May Revise
  • Elimination of half-day billing;
  • Correction for the minimum wage “quirk” which currently restricts service providers in ares with minimum wages that are higher than the state minimum wage to receive increases when the state minimum wage goes up;
  • Enable regional centers to make Early Start co-payments on behalf of privately insured families;
  • Require the Department of Developmental Services to submit a place for system-wide rate reform, considering the recommendations of the rate study and impending HCBS final rules, with stakeholder input, by January 01, 2020, with a planned beginning implementation date no later than January 21;
  • Rejection of the Governor’s proposal to sunset the rate increases on December 31, 2021.

The funding increases adopted on May 16th by the Senate represent a first step toward full funding. The State Assembly will next vote on the budget on Tuesday, May 21, and will have the chance to adopt the same budget as the Senate; however, if it is different in any way from the Senate’s version then it will move to the Conference Committee, where a final adopted budget will be negotiated and eventually sent to the Governor prior to the June 15th Constitutional deadline.

Thursday, May 9th, Governor Newsom released his “May Revise” budget, which is updated from his January budget based on actual tax revenue received by the state. The Governor’s January budget included no significant increases for services that support Californians with intellectual and developmental disabilities (IDD) (except for increases based on a growing caseload, which only maintains the status quo). The Governor’s reasoning for not including increases was that the state’s long-awaited rate study, which would bring to light the true investment needed to provide quality services and supports, was going to be released in March, and the Governor was going to wait until after that.

The rate study, which is still in draft form, concluded underfunding of $1.8 billion; however, on Thursday the Governor only proposed to increase services by $165 million next fiscal year and only $330 million the year after that. The Governor also proposed to “sunset” those increases, meaning that they would go away in two years unless re-appropriated. This modest investment doesn’t include any guarantee of additional investment over the next couple years to reach the full amount of $1.8 billion. While this budget would undoubtedly benefit a few people, without question the Governor’s proposed budget falls far short of what the community hopes and expects from the Legislature and administration this year.

One bright spot in the Governor’s budget is the suspension of the 14-day uniform holiday schedule, that was scheduled to begin on July 1. This would have forced individuals and families to go without certain services on 14 days during the year, but the suspension of its enforcement will allow regional centers to individualize the needs for people regardless of holidays. This proposal, however, also would sunset in two years and potentially causing the 14 days to be re-enforced.

2018 – 19 Developmental Services Budget

The legislature has approved the budget and it has been signed by the Governor.

click here to view the Budget Trailer Bill pertaining to developmental services with changes to the Welfare and Institutions Code notated.

Unfortunately, while this final agreement includes some good news, it also contains some disappointments for developmental services.

In January of this year, and then again with his May Revise, the Governor presented his Budget with some additional funding for developmental services to cover the cost of growth in new clients statewide. It did not however include funding for any of the elements for which the developmental disabilities community has been advocating for many months.

During final budget negotiations with the Governor, some enhancements to our system that had been approved by the Senate and Assembly Budget Committees were removed or modified.

  • $25 million in one-time bridge funding for service providers, requested by Assemblymember Chris Holden, was approved. However, this approval is contingent upon obtaining federal matching funds, which can be a lengthy process. This one-year funding is intended to provide some relief for service providers who are struggling due to frozen rates and increasing costs, while the state completes its rate study.
  • Although we advocated for restoration of funding, social recreation and camp services will not be restored (so regional centers are still prohibited from funding these services).
  • The Uniform Holiday Schedule (required unpaid closures for service providers, as recommended in the Governor’s Budget but opposed by regional centers and advocates) was approved, but suspended for one year.

Read joint statement from the Lanterman Coalition, “Outrage at State Budget Deal for California’s Developmental Disability Community.”

Respite Services Update

We want to remind our readers that, as part of the budget trailer bill process this year, the Legislature took action to lift the cap on respite services by repealing Welfare and Institutions Code Section 4686.5, effective January 1, 2018.

  • Prior to January, 2018, regional centers were limited to purchasing no more than 90 hours per quarter of in-home respite and 21 days of out-of-home respite for a family, unless an exemption is granted.
  • Effective January 1, 2018, these limits on the purchase of respite services will no longer apply.
  • HRC has been and will continue to make sure that families, service providers, and local community organizations are aware of the repeal of these restrictions on the purchase of respite, and we will be prepared to authorize respite as needed per each client’s IPP..

2017-18 Developmental Services Budget

  • Total expenditures for 2017/18 for developmental services are expected to exceed $7 Billion. The budget projects a total increase of 317,283 new clients to be served statewide.
  • Respite Services: Since budget reductions made during the great recession in 2009, respite services have been capped at 90 hours per quarter. In this budget the cap on respite services will be lifted, beginning January 1st, 2018. Services will continue to be determined according to individual/family need but will no longer have this legislatively established cap at 90 hours per quarter. This is something that our statewide regional center and Lanterman Coalition advocacy teams strongly advocated for in our visits with legislators.
  • Unfortunately the prohibition of funding of social recreation and camp services will continue. We advocated for restoration of these services, but this decision by the budget committee was influenced by the projected costs for restoring these services.
  • Allows Community Placement Plan funds to be used more flexibly as community resource development funds
  • Requires objectives to be included in regional center annual performance contracts that measure progress and report outcomes in implementing the state’s Employment First Policy
  • Authorizes an exemption to be granted for a client’s participation in a paid internship program or competitive integrated employment even though s/he is still eligible for school
  • Authorizes regional centers to provide funding for Early Start services when the service coordination team has determined the needed services are not available through a family’s insurance plan

2016-17 Developmental Services Budget

The Legislature passed a budget for the 2016-17 fiscal year which contains a substantial increase in spending for regional centers mostly because it incorporates the provisions of ABX-2 passed by the Legislature during the special legislative session. There have been no unexpected additions or deletions in the budget as enacted. The new fiscal year, and the new budget, were effective on July 1, 2016.

Budget Highlights

March 2016

Reason To Celebrate: Bipartisan Legislature Passes Developmental Services Funding Bill

On February 29, 2016, the Legislature passed a two-bill package, signed by the Governor on the following day, that will provide much needed funding relief for services for people with developmental disabilities and the people who serve and care for them. These votes come after a five-year campaign by our community.
The first of the two bills helped to secure continued inflow of federal funding, by restructuring the way that Managed Care Organizations are taxed. The continuation of federal funding made it possible for the second of these two bills to provide nearly $300 Million in state general funds for the developmental services system. And this will be matched by federal funds resulting in an estimated total of more than $400 Million. Support for the developmental services funding bill in the legislature was unanimous.

After over a decade of service cuts, funding reductions and frozen rates, the new funding has been targeted to specific areas, to begin to restore the service system. These include funds to retain service coordinators and service provider direct care staff, and rate increases for targeted service categories such as supported employment, supported and independent living, respite, and transportation services. Special initiatives for promoting integrated employment, and increasing cultural competency in service delivery were also included in the funding package. Finally, the package will fund a rate study plan to support the ongoing sustainability of our service system.
The new infusion of funds is to become effective July 1st of 2016. We expect that some fine tuning will occur during the coming months as the total budget for the 2016-17 fiscal year is finalized, and as implementation details are provided by the Department of Developmental Services.

What’s Next?

Many in the developmental services community, including system advocate Senator Jim Beall, have pointed to the severe need for housing resources for people with developmental disabilities. We are also continuing to advocate for resource development for all types of services, to begin to restore services which have been lost as underfunded programs have been forced to close, and to serve emerging needs in our community.
For now, the passage of new funding is an important first step in our ongoing efforts for the fundamental reform we will need, to see another 50 years of developmental services.

Read California Legislature approves bills on taxing health plans

Read Daily Breeze: Californians with Developmental Disabilities Get Desperately Needed Help

The approved MCO tax and developmental services funding package includes:

  • A 7.5% increase for salaries and benefits,for both POS&OPS
  • A 2.5% increase for administrative and other costs,for both POS&OPS
  • A restoration of the supported employment rates to 2006 levels
  • A 5% increase for supported and independent living services
  • A 5% increase for in-home and out-of-home respite services
  • A 5% increase for transportation services
  • An effective 5% increase for ICFs,done as a 3.75%increase,and the elimination of prior cuts,
  • A comprehensive increase for competitive integrated employment programs, in the form of paid internships and incentive payments for helping individuals obtain and retain employment
  • An increase in vendor audit thresholds
  • A rate study plan
  • 5 million for disparity issues for bilingual staff at regional centers, cultural competency training, and parent education efforts

The Administration has put the total value of this package at $300M General Fund, $418M Total Funds. The majority of that money will be provided via the MCO agreement, with the balance addressed in the Governor’s May Revise.

Thank You HRC Community for Contacting Your Legislators

“The real power behind this was the tireless work of advocates like you. This is an historic step for over 300,000 Californians with developmental disabilities, their families, and their service providers.” said Anne Struthers, President of ARCA. “This bipartisan support shows the Legislature and Governor Brown are committed to community-based care and the values expressed in the Lanterman Act, passed also with bipartisan support in 1969. Congratulations to the Legislature for taking this step.” \
Association of Regional Center Agencies

Read More

Thank you Legislators For Your Support!

“Today, after a decade of waiting, the developmental disability community in California finally got some help from Sacramento! I was proud to support this measure… This is a down payment on restoring years of cuts and cost-of-living adjustments that were never appropriated.”
Assembly Member David Hadley, Torrance

“The Legislature approves ABX2-1, injecting $500 million in permanent, on-going funding — $300 million in state funding that draws a $200 million federal match– into the beleaguered developmental disabilities services network. It’s a good first step to stabilize the system, but we still must come up with a long term solution.” Senator Jim Beall

Thank you to HRC area legislators:
Senators Ben Allen, Isadore Hall, Ricardo Lara, and Tony Mendoza
Assembly Members Ian Calderon, Cristina Garcia, Mike Gipson, David Hadley, Patrick O’Donnell, and Anthony Rendon.

These changes include:

  • a payment reduction for regional centers and service providers of 1.25% (as noted above, expected to end June 30, 2013)
  • assisting families to access private insurance coverage for behavioral health treatment and other medically necessary services instead of paying directly for these service using regional center funds
  • a standardized process for reviewing needed supported living services
  • strict limitations on admissions to the developmental centers for individuals with exceptionally challenging service needs.
  • In addition we continue to implement measures instituted in earlier years, such as continued assessment of annual family program fees, and development of transportation service plans designed to eliminate contract transportation for individual clients.

Despite these measures, regional centers are concerned that their concerted efforts will not be able to achieve the full $200million in savings, and with the possibility of ending the year in deficit. Together the regional centers are continuing to ensure that individual needs identified in individual/family service plans are met, while working closely together with the Department of Developmental Services to get through this year within funds available.

2011-12 Recap
Some of the most significant changes made in 2011-12 include, but are not limited to:

  • Continuation of temporary 4.25% payment reduction to regional center operations and service providers (purchase of services), and administrative reductions to regional centers and DDS (changed to 1.25% for 2012-13)
  • A new Annual Family Program Fee of $150-$200 for families of minor children who live at home, and have income of at least 400% or more of the federal poverty level. Some families will be exempt, eg. if the child receives Medi-Cal or does not receive services beyond eligibility determination, needs assessment and service coordination. (Continuing)
  • Elimination of the regional center Prevention Program. Effective July 1st, 2012, infants ‘at-risk’ of developmental disability will be referred to Family Resource Centers for information and referral, while regional centers will continue to provide services to infants and toddlers with developmental delays who meet Early Start criteria. (Continuing)
  • A new requirement for families to provide the regional center with a copy of any health benefit card at the time of assessment or at the individual service planning meeting, to promote access of any available benefits. (Continuing)
  • A requirement to access education-funded day services, rather than regional center-funded programs, for 18-22 year old adults.(Continuing)
  • Requirements for adult day services to offer flexible or half-day schedules. (Continuing)
  • Allowing lower payment levels for individual clients in licensed homes whose needs have decreased, without having to move to another home. (Continuing)
  • Providing shared supported living services for adults with shared tasks in the same supported living home, Conducting independent assessment of support needs. (Beginning in 2012-13 a new system is to be implemented for standardized assessment of all clients receiving supported living services, rather than independent assessment of only those clients receiving higher cost SLS services).
  • A new requirement for parents receiving behavior services to verify receipt of those services prior to payment. (Continuing)
Blog

Advocacy for Service Coordination Funding

For More Client/Family Contact and Support

California’s 21 regional centers, represented together as the Association of Regional Center Agencies (ARCA), are supporting a number of Budget proposals to help our community. Together, we’re pushing for sufficient funding to hire enough service coordinators to meet both your needs and the promises of the Lanterman Act.