CDCAN REPORT #047-2011: Senate Budget Committee rolls back Governor's proposed $750 million cut to regional centers and developmental services by nearly $270 million

• SENATE BUDGET COMMITTEE ROLLS BACK GOVERNOR’S PROPOSED $750 MILLION CUT TO REGIONAL CENTERS & OTHER DEVELOPMENTAL SERVICES BY NEARLY $270 MILLION – APPROVES OTHER REGIONAL CENTER CUTS
• ACTION REDUCES UNSPECIFIED CUT OF $423.8 MILLION TO $150 MILLION

SACRAMENTO, CALIF  (CDCAN) [Updated 02/17/2011 – 11:18  AM  (Pacific Time)] –   The Senate Budget and Fiscal Review Committee, chaired by Sen. Mark Leno (Democrat – San Francisco, 3rd State Senate District) voted unanimously this morning to significantly reduce  Governor Brown’s $750 million cut in State general fund spending to regional centers and other developmental services by about $270 million State general funds.

The Senate Budget and Fiscal Review Committee approved specific reductions proposed by the Brown Administration that was part of the overall $750 million reduction in State general fund spending – including additional savings identified by Senate budget committee staff – but balked at the remaining size of the cut – $423.8 million in State general funds – that had no details yet on how the reduction would be achieved.

The size of the Governor’s proposed cut was the focus of intense opposition from people with developmental disabilities, their families, community organizations, facilities and workers who provide supports, services or other advocacy and work, including thousands who jammed the hearing rooms and hallways at the State Capitol when the Assembly and Senate budget subcommittees heard the issues and took public comment on February 3rd and 10th.

It was that remaining amount of $423.8 million the committee rejected without opposition and reduced it to a cut of $150 million in State general funds, with “placeholder” trailer bill language (meaning trailer bill language still to be developed or drafted by committee staff).  The Senate committee did not expressly approve or reject the Brown Administration’s proposal to develop statewide standards to limit regional center community based spending – called “Statewide Standards of Purchase of Services”.  The Brown Administration does not need approval from the Legislature to actually move forward in developing such a proposal however.

The size of the reduction - $150 million in State general funds – that still needs detail on how it will be achieved – is still enormous, because that cut would probably mean loss of federal matching funds, meaning the actual total reduction to the regional center system would be over $300 million – on top of other reductions approved by the Senate Budget and Fiscal Review Committee today and in addition to previous cuts imposed in 2010 and 2009 and in earlier years.

The Assembly Budget Committee will take up these budget items tomorrow (Friday – February 18th).  The actions by both budget committees still need final approval from the full State Senate and Assembly when the entire budget package is taken up in floor votes – likely the last week of February or first week of March.

Here is CDCAN summary of action (more detail to be reported later):

1. Additional Savings in Developmental Centers – Senate Budget Committee APPROVED without opposition
2. Developmental Center: Fairview Fire Alarm System Upgrade – Senate Budget Committee REJECTED without opposition
3. Developmental Center: Automatic Fire Sprinklers Installations at Three Developmental Centers Nursing Home Facilities and general acute care residents – Seante Budget Committee APPROVED without opposition
4. Developmental Center: Sonoma Developmental Center Medical Gases and Oxygen – Senate Budget Committee APPROVED without opposition.
5. Regional Centers: Budget Trailer Bill Language - 15% Administrative Costs Cap for Regional Centers and Providers – Senate Budget Committee APPROVED without opposition the targeted savings amount of this reduction ($39.5 million State general funds) with Democrats supporting “placeholder” trailer bill language (and Republicans abstaining.
6. Regional Centers: Budget Trailer Bill Language – Dispute Resolution and Third Party Liablity (reduction of about $10 million State general funds) - Senate Budget Committee APPROVED without opposition the targeted savings amount of this reduction ($39.5 million State general funds) with Democrats supporting “placeholder” trailer bill language (and Republicans abstaining.
7. Regional Centers: Budget Trailer Bill Language – Audits (require regional centers to change company that does their annual audits after on a regular basis and expand audit or review requirements to providers.  Would require providers who receive more than $250,000 (Sen. Alquist wanted that lowered to $150,000) from regional centers to be required to conduct a financial review; and require providers who receive more than $500,000 to have an annual audit completed to the regional centers.  State estimates this reduction would mean $21.5 million savings to the State general fund.  - Senate Budget Committee APPROVED without opposition the targeted savings amount of this reduction ($39.5 million State general funds) with Democrats supporting “placeholder” trailer bill language (and Republicans abstaining.
8. Regional Centers: Budget Trailer Bill Language - Conflict of Interest (requires regional center boards to establish conflict of interest policies). Brown Administration estimates this reduction would mean $11 million in savings to the State general fund.  Senate Budget Committee APPROVED without opposition the targeted savings amount of this reduction ($39.5 million State general funds) with Democrats supporting “placeholder” trailer bill language (and Republicans abstaining.
9. Regional Centers: Budget Trailer Bill Language -  Accountability and Transparency (would impose reviews of provider contracts of over $250,000; require extensive posting of documents including rates on regional center and department websites (or links) and require regional center providers to meet eligibility requirements identical to that for those enrolled as Medi-Cal providers).  Brown Administration estimates this reduction would mean $27.1 million savings in State general funds.  Senate Budget Committee APPROVED without opposition the targeted savings amount of this reduction ($39.5 million State general funds) with Democrats supporting “placeholder” trailer bill language (and Republicans abstaining).
10. Regional Centers - Additional Savings in Regional Centers  (identified by Senate budget committee staff by reducing Agnews Community Placement Staff. This technical issue would reduce by $1.5 million State general funds; Federal Fund Shifts for Regional Center Operations – a reduction of $8 million State general funds by shifting certain Regional Center project costs and Operations to federal funds ($3 million to Home and Community-Based Waiver, and $5 million to Money Follows the Person); and.with an adjustment for large community care facilities that would achieve a reduction of $1.7 million in State General funds by obtaining federal funds through the Home and Community-Based Waiver for consumers who are Medi-Cal eligible and residing in facilities with 16 or more beds).  Senate Budget Committee APPROVED without opposition.
11. Regional Centers  - Conforming Action: Adjust Regional Center Purchase of Services to Conform to Medi-Cal Programs Actions of Senate Budget Committee - Senate Budget Committee APPROVED with Republicans voting no.   
12. Regional Centers - Continuation of 4.5% Reduction to Regional Center Operations & Purchase of Services - Senate Budget Committee APPROVED without opposition.
13. Regional Centers - Budget Bill Language for Prevention Program (allows Department of Development flexibility to move Prevention Program funds into Purchase of Services if necessary) - Senate Budget Committee APPROVED with Republicans voting no.
14. Regional Centers - New Cost Containment & Statewide Purchase of Services Standards:  - Senate Budget Committee REJECTED without opposition the Governor’s unspecified portion ($423.8 million State general funds) of the $750 million State general fund reduction to developmental services and instead  APPROVED reducing that cut to $150 million State general funds with “placeholder” trailer bill language.  [the action reduces the $423.8 million unspecified cut to $150 million with budget trailer bill language on how to achieve it to be developed or drafted by Budget committee staff.  The action does not reject or approve specifically the Brown Administration’s proposal to develop statewide standards or limits for regional center community based spending.  As reported above, the Brown Administration technically does not need legislative approval to develop and to submit a proposal to the Legislature.