CDCAN REPORT #114-2011: Senate Budget Subcommittee on Health & Human Services votes to reject Governor's proposed reduction to IHSS Public Authorities

Senate Budget Subcommittee on Health & Human Services Votes 2 to 1 To Reject Governor’s Additional $2.2 Million State General Fund Cut To IHSS Public Authorities – Restores Funding

Follows Identical Action By Assembly Budget Subcommittee on Health and Human Services On Tuesday

SACRAMENTO, CALIF  (CDCAN)  [Last Updated 05/25/2011  01:15 PM] -  The State Senate Budget Subcommittee #3 on Health and Human Services voted this afternoon to reject Governor Brown’s May budget revision proposal that would have reduced by another $2.2 million in State general funding ($7.7 million including lost federal and other funds) for In-Home Supportive Services Public Authorities during the 2011-2012 State Budget year that begins July 1st.

The vote was 2 to 1, with Senators Mark DeSaulnier (Democrat – Concord), the subcommittee chair and Sen. Elaine Alquist (Democrat – Santa Clara) supporting the action, with Sen. Bill Emmerson (Republican – Riverside) opposing it.  (the final vote was delayed until just after 1 PM until Sen. Alquist returned back to the hearing room).

The subcommittee also approved the subcommittee staff recommendation for the adoption of budget related legislative language (referred to as budget “trailer bill language”) that would direct the Department of Social Services, in consultation with stakeholders including at least the counties and the IHSS Public Authorities, to develop a new rate –setting methodology for public authorities administration costs beginning with the 2012-2013 State Budget year.

The action today by the Senate budget subcommittee mirrors the action taken yesterday by the Assembly Budget Subcommittee on Health and Human Services and came after public comments from many advocates, including the California Association of Public Authorities (CAPA) that warned that the Governor’s proposed reduction to public authorities – on top of previous cuts implemented in 2009 and 2010 would result in closure of many public authorities.

While final action still needs to be taken by both the full Assembly and State Senate on the main budget bill and new budget related (trailer) bills – the action today means that, at least for now, the funding for IHSS Public Authorities would be restored for the 2011-2012 State Budget year that begins July 1st, at the level proposed by the Governor in January – about $24.700 million all funds (county, federal and about $8.9 State general funds) instead of what the Governor proposed on May 16th - $17 million all funds of which $6.600 million would be State general funds)

As they did on Tuesday, the Brown Administration, represented by the Governor’s Department of  Finance, said before the vote and public comment that it was opposed to the action to restore the funding and to proposed budget related (trailer bill) language to revise the how Public Authorities receive their funding.

The Senate budget subcommittee adjourned its hearing close to 1:15 PM.

Assembly Budget Subcommittee Voted To Reject Governor’s Proposal Tuesday

As mentioned, the Assembly Budget subcommittee voted 3 to 0 (the two Republican members abstaining) to approve the staff recommendation as contained in a supplemental agenda to reject that reduction and maintain funding for the IHSS Public Authorities.  In the original agenda, that recommendation would maintain funding at the level included in SB 69 (the main budget bill that the Legislature passed in March but did not send to the Governor for approval) of about $24.7 million ($8.9 million in State general funds).

Both the Senate and Assembly budget subcommittee staff will work on proposed budget related language called budget trailer bill language to change how IHSS Public Authorities are allocated funding which currently is tied to caseload numbers that advocates say has resulted in unfair funding reductions.

IHSS Public Authorities Funding

Total State general funding for IHSS Public Authorities, due to budget reductions and a line item veto by Governor Schwarzenegger last year that was carried forward into this year’s State budget,  declined significantly since the 2008-2009 State Budget year:

July 1, 2008 – June 30, 2009 State Budget Year
$60.7 million all funds ($21.800 million of that amount State general funding)

July 1, 2009 – June 30, 2010 State Budget Year
$27.1 million all funds ($10 million of that amount State general funding)

July 1, 2010 – June 30, 2011 State Budget Year
$27.2 million all funds ($9.700 million of that amount State general funding)

July 1, 2011 – June 30, 2012 State Budget Year
As proposed in January and approved by the Legislature in March (the main budget bill however was never sent to the Governor):
$24.700 million all funds ($8.9 million of that amount State general funding)

On May 16th the Governor proposed a budget revision that would have had the impact of reducing the public authority funding further for the 2011-2012 State Budget year.  This is the proposal that the Assembly and State Senate budget subcommittees rejected.
$17 million all funds ($6.6 million of that amount State general funding) ***REJECTED***

What the Governor Proposed on May 16th

• The Governor proposed, as part of his budget revision released May 16th, to reduce the funding for IHSS Public Authorities by $7.7 million ($2.2 million in State general funds). This is the proposal that both the Assembly and State Senate budget subcommittees rejected.
• There are 52 public authorities in the state that cover 56 counties. Including the impact of the proposed reductions, the total statewide PA funding would include $17.0 million ($6.6 million in State general funds).
• Public authority rates are county-specific and are computed by multiplying case-months by the average hours per case by the administrative hourly rates for each public authority (established based on hourly wages, employer taxes, benefits, and administrative costs).
• Since 2009-10, the rates established by these formulas have, however, been reduced by 20%, as approved in the 2009-2010 State budget [in ABx4 1 (Chapter 1, Statutes of 2009, Fourth Extraordinary Session)].
• In addition, the rates have been reduced by $8.7 million in State general funds and corresponding other funds, as a result of Governor Schwarzenegger’s 2009-2010 veto of that amount for public authority funding.
• The impacts of that veto were continued in the 2010-2011 State Budget and are proposed to again be included in the 2011-2012 State Budget.
• According to the Brown Administration, the proposed reductions from March to the May Revision are tied to the impacts of decreased caseload estimates since the Governor’s January budget proposal.

Background of IHSS Public Authorities

• Under current State law, a county board of supervisors may decide to establish a public authority to provide for specific functions related to the delivery of IHSS in their county.
• Public authorities are separate entities from the county in which they operate.
• Public authorities are the employers of IHSS providers for the purposes of collective bargaining over wages, hours, and other terms of employment (referred to as the “employer of record”.
• IHSS recipients retain the right to hire, fire, and supervise the work of any IHSS worker providing services to them.
• Public authorities also provide at least the following functions: 1) assistance to recipients in finding IHSS providers through the establishment of a registry; 2) investigation of the qualifications and background of potential providers; and 3) training for IHSS workers (providers) and IHSS recipients.