CDCAN REPORT #192-2011: Brown Administration releases county instructions for 20% across-the-board cut in In-Home Supportive Services hours

BROWN ADMINISTRATION RELEASES INSTRUCTIONS TO COUNTIES TO IMPLEMENT 20% ACROSS THE BOARD CUT IN IHSS HOURS IF STATE BUDGET TRIGGER IS PULLED - PROVIDES FOR CERTAIN EXEMPTIONS

Governor's Department of Finance Will Determine By December 15th If State Budget Trigger Cut Will Be Pulled - Reduction Would Take Effect January 1, 2012 - Lawsuit To Block Cut Will Likely Be Filed If Cut Is Implemented

SACRAMENTO, CA (CDCAN)  [Last updated 11/292011 09:55 PM] -  Under the shadow of a projected $13 billion budget deficit the Department of Social Services under the Brown Administration released today official instructions to the counties - called an "All County Letter" or ACL regarding implementation of a 20% across the board reduction in service hours to all persons receiving In-Home Supportive Services, effective January 1, 2012 if the State Budget "trigger cut" is pulled.  (the state budget "trigger cuts" are different from the federal budget "trigger cuts").  [CDCAN Note - the 19 page document is attached to this CDCAN Report titled "20111129 - All County Letter (ACL) 11-81 - IHSS - 20 Percent Reduction.pdf"  The document was saved as a document pdf file, so persons who are blind or sight impaired should be able to view it using a screen reading device.]  There are major exemptions to the reduction (see below) which are detailed in the notice released today.

Though no decisions on the State Budget "trigger cuts" have yet been made - and will not be made until mid-December - the Department of Social Services, the state agency that oversees statewide the IHSS program,  is releasing the instructions to give counties and other local government agencies time to prepare if the reduction does go into effect.  The department earlier this month released draft versions of the All County Letter and other related draft documents for stakeholders to comment on (CDCAN released these draft versions when the department released them on November 1st.).

A lawsuit is certain to be filed by various advocacy groups that will seek to block the cuts if the reduction goes into effect.

The State budget "trigger cuts" will be pulled - triggering up to $2.5 billion in automatic spending cuts in specific budget areas - if the State's $88.5 billion in projected revenues do not come in at a certain level as budgeted.

• If State revenues are forecast in December 2011 to be lower by $1 billion to $2 billion, the first State budget "trigger" is pulled, triggering  $600 million in automatic spending cuts for specific programs, effective on or sometime after January 1, 2012.
• If State revenue numbers in December 2011 are forecast to be lower by more than $2 billion,  then the second State budget "trigger" is pulled, triggering spending cuts of up to $1.9 billion  - the bulk of that coming from K-12 education.

With the State's economy still not in full recovery from the impact of the Great Recession, there is growing concerns and fears among many advocates and policymakers that State revenues will fall below $1 billion less than what was budgeted and will likely mean that the first State budget trigger cut - largely health and human services and higher education will be pulled.  The second trigger is pulled if State revenues are projected in December to be $2 billion less than what was budgeted, implementing automatic massive cuts of at least $1.5 billion to K-12 education and more cuts to higher education. (see below for details on the State budget "trigger cuts".)

20% Across the Board Cut - If Implemented - Would Be In Addition To Existing 3.6% IHSS Reduction

The 20% reduction - which allows for exemptions for certain persons (see below) - would amount to at a reduction of at least $100 million in State general fund spending for IHSS in the remaining 6 months of the 2011-2012 State budget year that ends June 30, 2012. The 20% reduction - if the State budget trigger cut is pulled - would be in addition to the existing 3.6% reduction in most IHSS recipient authorized monthly service hours that took effect February 1, 2011.  The 3.6% reduction is currently set to continue until June 30, 2012. That means, if the State budget "trigger cut" is pulled, a person with disabilities, mental health needs, the blind or seniors in the IHSS program could face a total reduction in service hours of 23.6%., unless they were exempted from the reduction.

The Department of Developmental Services budget would also face a $100 million reduction in State general fund spending to be effective on or sometime after January 1, 2012, if the State budget "trigger cut" is pulled - though the cuts to that budget are not specified at this point.

Hundreds of Thousands of People Could Be Impacted

• If the State budget "trigger cuts" are pulled and this reduction does take effect in January 2012, hundreds of thousands of children and adults with disabilities - including those with developmental disabilities - people with mental health needs, the blind, low income seniors would be impacted with a dramatic loss in hours of support services in their own homes.
• In addition, hundreds of thousands of their support workers.could face a significant loss in working hours that could impact - for some - health care and other benefits.
• The reduction - if it does go into effect - does allow for exemptions for those who are at serious risk of out of home placement if they lost 20% of their service hours.  But advocates say that tens of thousands of people receiving IHSS are "terrified" or in a "panic" of the possibility of losing 20% of their support services that they say is crucial to remain safely in their homes - but may not reach the threshold for an exemption or qualify for other exemptions.
• Disability Rights California will hold a conference call next week on December 7 for IHSS Recipients, workers and others, to answer questions about the reduction, exemptions and rights under state and federal laws.  See separate CDCAN Report tomorrow for details on this conference call.

How the IHSS Reductions Would Work - IF State Budget "Trigger Cut" Is Pulled

The specific reductions to IHSS are in SB 73 as passed by the Legislature in March and signed into law by Governor Brown that month:

• Recipients may choose how the total reduction in service hours is applied to their individual authorized services if the State budget "trigger cut" is pulled.
• The reduction - if the State budget "trigger cut" is pulled - will not be applied to individuals receiving IHSS who also receive services under one of the State Home and Community Based Services Waivers, including the following: Acquired Immune Deficiency Syndrome (AIDS) Waiver, Home and Community-Based Services Waiver for the Developmentally Disabled (HCBS-DD), In-Home Operations (IHO), Multipurpose Senior Services Program (MSSP), and Nursing Facility/Acute Hospital (NF/AH.) This information is contained in the All County Letter released today.
• If the State budget "trigger cut" is pulled, the 20% reduction will first be applied to any documented unmet need, excluding protective supervision, before being applied to authorized hours.
• Any IHSS recipient who receives notice of the reduction in authorized services (if the State budget "trigger cut" is pulled) and who believes that the reduction puts him/her at serious risk of placement in out-of-home care may submit an application for IHSS Supplemental Care to request full or partial restoration of his/her reduced hours.
• The California Department of Social Services shall work with counties to develop a process to allow for counties to preapprove IHSS Supplemental Care requests if the State budget "trigger cut" is pulled (see attached Draft Supplemental Care application form).

State Budget "Trigger Cuts" Pulled If State Doesn't  Bring in $88.5 Billion In Revenues This Year

• Back in late June, with Legislative Republicans opposed to any tax increases, Legislative Democrats and the Governor opted for putting in higher  revenue numbers in the 2011-2012 State Budget tied to "triggers" that would impose automatic spending cuts later in December - rather than being forced to making additional massive spending cuts  then in June when the budget was passed.
• The State budget "trigger cuts" would be pulled if it is determined that the amount of State revenues - $88.5 billion -  will not come in as hoped for in the 2011-2012 State Budget.
• The Governor's Department of Finance director will make that determination on or by December 15 this year, based on numbers from the department's own revenue analysis and information from the non-partisan Legislative Analyst Office (LAO). [CDCAN Note: see below for details on the State budget "trigger cuts" and summary of budget trailer bill, SB 73 that deals with health and human services related cuts if trigger is pulled - Marty Omoto]
• The actual State budget revenue and spending numbers released October 10th by the State Controller suggests that the California economy, while showing some improvement, is not bringing in revenues as hoped for in the 2011-2012 State Budget - and that could mean, if the trend continues - that one or both of the State budget "trigger cuts" will likely be pulled.
• Earlier this month the non-partisan Legislative Analyst Office projected that unless the Governor and Legislature take action the State faces a budget shortfall of nearly $13 billion - news that increases the chances that one or both of the State budget "trigger cuts" will be pulled.
• At this point, no one really knows what will ultimately happen in December.

Outline of the State Budget "Trigger Cuts" Process

• Requires the Governor's Department of Finance to provide notification to the Joint Legislative Budget Committee by December 15, 2011, with an updated revenue forecast for the 2011-2012 State Budget that is based on the higher of either the November 2011 Legislative Analyst’s revenue forecast, or the Department of Finance’s December 2011 revenue forecast.
• Requires that the Director of Finance notify the Joint Legislative Budget Committee of any trigger reduction within 10 days of the reduction.
• There are some questions - and differences of opinion - under just what conditions can a trigger be pulled - or not - and if pulled, the effective dates of cuts and whether or not all of the savings (reductions) have to be achieved before the end of the 2011-2012 State Budget year (that ends June 30, 2012).
• In addition there are OTHER "trigger cuts" in the 2011-2012 State Budget, including a different one impacting In-Home Supportive Services if it is determined in 2012 that a certain level of savings will not be achieved via proposals that hope to bring down $140 million in new federal matching funds. That "trigger cut" is not part of the "trigger cuts" tied to the overall State Budget projected revenues described below.

If the December 15, 2011, updated forecast of revenues predicts revenues less than $87.5 billion, the following additional  spending cuts - called “Tier I” reductions, which total about $601 million, shall occur up to the amount that is specified. These reductions, if triggered, would take effect on or after January 1, 2012:

• $100 million to the University of California.
• $100 million to the California State Universities.
• $100 million to the Department of Developmental Services.(can be reduced from the developmental services system, including State administration, Developmental Centers, and Regional Center expenditures. A "variety of strategies" may be used for purposes of identifying savings, including, but not limited to, savings attributable to caseload adjustments, changes in expenditure trends, or other administrative savings or restructuring according to the budget trailer bill language).
• $110 million to the In-Home Supportive Services program, including $100 million in service hour cuts, and $10 million for local anti-fraud efforts (an across-the board reduction in IHSS services of 20% beginning January 1, 2012, with specified notice requirements and exceptions. According to legislative budget analysis of this cut, if this trigger is pulled, the resulting reduction would affect about 374,000 IHSS recipients and would generate approximately $100 million in State general fund reductions in 2011-2012 and $242.8 million in State general fund reductions (or savings) in subsequent full budget years.).
• $92 million to the Department of Corrections and Rehabilitation (CDCR), including
  • $72.1 million in increased county charges for youthful offenders sent to CDCR.
  • $30 million to the California Community Colleges backfilled with a $10 per unit fee increase.
  • $23 million to the Department of Education related to childcare funding.
  • $16 million to the California State Library related to library grants.
  • $15 million to the California Emergency Management Agency related to local vertical prosecution grants.
  • $15 million to Medi-Cal from extending the March 2011 cuts to all managed care plans.

If the December 15, 2011, updated forecast of revenues (the higher forecast by either the Legislative Analyst Office or the Department of Finance) projects revenues less than $86.5 billion, then the second trigger is pulled and ADDITIONAL round of automatic spending cuts of $1.9 billion - called "Tier 2" reductions - on top of the $601 million would be implemented on or after January 1, 2012; however, the reduction impacting schools to the 2011-2012 school year would take effect on or after February 1, 2012:

• $1.5 billion from reducing the 2011-12 school year by up to 7 days.
• $248 million from eliminating dedicated funding for home-to-school transportation.
• $72 million to the California Community Colleges related to an apportionment decrease.Summary of Budget Trailer Bill Dealing With Health and Human Services Trigger Cuts

For specific information about the trigger cuts as it relates to health and human services program cuts, see SB 73 (one of the 18 budget trailer bills that make up the 2011-2012 State Budget as passed and signed into law in June):SB 73 - BUDGET TRIGGER: HEALTH AND HUMAN SERVICES
AUTHOR: Senate Budget and Fiscal Review Committee
CDCAN SUMMARY: 
Makes changes in State law to allow for implementation of $200 million in reductions in State general fund spending in the health and human services budget, that is part of the $2.5 billion in "trigger cuts".  Would make $15 million in reductions to Medi-Cal impacting PACE (Program for All Inclusive Care for the Elderly, AIDS Foundation and Senior Action Network; $100 million in State general fund cuts to developmental services to be identified by the Department of Developmental Services from across the developmental services system and $100 million in across the board cuts in State general funding to In-Home Supportive Services
PREVIOUS ACTION 06/28/2011: PASSED Assembly by vote of 51 to 28. PASSED State Senate by vote of 23 to 17. Sent to Governor at 09:50 PM.
LATEST ACTION 06/30/2011: SIGNED by Governor.
EFFECTIVE DATE: Immediate upon signature of Governor.
COPY OF BILL (CHAPTERED VERSION AS APPROVED BY GOVERNOR) - HTML:  http://www.leginfo.ca.gov/pub/11-12/bill/sen/sb_0051-0100/sb_73_bill_20110630_chaptered.htmlCOPY OF BILL (CHAPTERED VERSION AS APPROVED BY GOVERNOR) - PDF: http://www.leginfo.ca.gov/pub/11-12/bill/sen/sb_0051-0100/sb_73_bill_20110630_chaptered.pdfCDCAN COMMENT: 
* There are a total of three bills dealing with the budget "trigger" - including one (AB 121) that gives authority to the Governor's Department of Finance to determine whether sufficient level of new revenues are coming in as projected by January 2012 - and then to implement certain levels of cuts up to $2.5 billion if it is determined that revenues are not coming in as projected.  AB 121 only lists budget area numbers and spending reduction amounts and the conditions that those reductions would be made)
For html version of AB 121:  http://www.leginfo.ca.gov/pub/11-12/bill/asm/ab_0101-0150/ab_121_bill_20110630_chaptered.htmlFor pdf version of AB 121: http://www.leginfo.ca.gov/pub/11-12/bill/asm/ab_0101-0150/ab_121_bill_20110630_chaptered.pdf*  The other two bills deals with the specific levels of reductions that would occur in K-12 education and  - this bill (SB 73) - on health and human services should the triggers be pulled in January 2012.  
PRIORITY:  VERY HIGH

File Attachments: 

2011-11-29 - Department of Social Services - All County Letter 11-81 - IHSS 20 Percent Reduction.pdf (1018.84 KB)