SACRAMENTO  (CDCAN)  - The Senate Budget and Fiscal Review Committee met at 6 PM Wednesday evening for about an hour and 45 minutes to take action on some of the Governor's budget proposals that will help reduce spending in the current year State budget and next year's budget  and also help address the state's cash flow problem, approving a major 10% rate reduction to most Medi-Cal providers, effective July 1, 2008, and approval of regional center "cost containment" measures currently in place to continue into the 2008-2009 State Budget year. 

 

The budget panel, controlled by the Democrats, however held off on taking action on several major proposals of the Governor, including:  suspending the school funding guarantee (Proposition 98), reductions proposed for the In-Home Supportive Services program and the elimination of Medi-Cal optional benefits, rate reductions to the supported employment, adoption assistance and foster care programs, and suspension of the scheduled June 2009 cost of living increase for the SSP portion of the SSI/SSP grants (the Senate Budget panel however did approve the suspension of the cost of living increase for the SSP (state funded portion of the SSI/SSP grant) scheduled for June 2008 through October 2008. 

 

Sen. Denise Ducheny (Democrat - San Diego) said that all the actions taken together by the Senate Budget and Fiscal Review Committee would mean covering the $3 billion shortfall in the current State budget with a $1 billion reserve, and bring down the shortfall projected for the 2008-2009 State Budget year from $11 billion to about $7 billion. 

 

The bills were supported by all the committee Democrats.  Committee Republicans abstained from voting on any of the bills because they said they receive copies amendments late and did not have the opportunity to review the changes. 

 

SUMMARY OF CUTS APPROVED BY SENATE BUDGET COMMITTEE

This is list of the major cuts - that still need approval of the full State Senate and the Assembly, as approved by the Senate Budget and Fiscal Review Committee (copy of the full committee agenda and bills on the CDCAN website at www.cdcan.us) :

 

IN-HOME SUPPORTIVE SERVICES (IHSS)

* Took no action on any of the Governor's proposed cuts to IHSS at this time

 

MEDI-CAL

This cut is the one of the largest - that Sen. Ducheny would result in savings to the State of over $500 million in the 2008-2009 State Budget year.  She told committee members that action - as painful as it was - needed to be taken now on this proposed cut in order for the State to make the necessary changes so it can go into effect immediately on July 1.

 

MEDI-CAL PROVIDER RATE CUT (to be effective July 1, 2008):

* Approved 10% rate reduction for most Medi-Cal providers as proposed by the Governor for both fee for service and managed care plans (reduction of $544,258,000 for the 2008-2009 State Budget year)

* Reduced Medi-Cal reimbursement by 10% for certain long term care providers

* Reduced payments for "non-contract" hospitals

 

MEDI-CAL OPTIONAL BENEFITS

* Did NOT take action and held for more discussions and hearings the Governor's proposals that called for the elimination of several Medi-Cal "optional benefits", eligibility issues including putting back in place quarterly status reports. 

 

OTHER HEALTH PROGRAMS
* Approved 10% reduction in payment to California Children's Services providers (effective July 1, 2008, reduction of $10,083,000 for 2008-2009 State Budget year

* Approved 10% reduction in payments to Genetically Handicapped Persons Program (GHPP) Providers (effective July 1, 2008 for a reduction of $3,850,000 for 2008-2009 State Budget year)

OTHER MEDI-CAL ACTIONS

* Approved to permanently defer Medi-Cal Checkwrite

SSI/SSP (Supplemental Security Income/State Supplemental Payment)

* Approved suspension of the state portion (SSP) of the SSI/SSP grant that goes to the lowest income people with disabilities, seniors and the blind, but changed the Governor's proposal so that the suspension is for five months only, from June to October 2008 (reduction of $23,253,000 for 2007-2008 State Budget year and another $67,760,000 for the 2008-2009 State Budget year).

* That means SSI/SSP recipients would receive their SSP cost of living after that.  The Governor did not propose any changes to the SSI cost of living increase, that was passed on to recipients January 1, 2008 and is scheduled to be passed on to recipients January 1, 2009. 

* Held off taking action on the Governor's proposal to suspend the SSP cost of living increase effective June 2009. 

 

CALWORKS
* Approved delay in implementation of the 2008-09 CalWORKs Cost-of-Living Adjustment ($41,496,000 reduction)
Adjustment

* Approved to continue the regional center "cost containment" measures for the purchase of services budget (the budget that funds community-based services) already in place that will result in a $329 million cut or savings in the 2008-2009 State Budget year.

* Approved proposal to expand the Family Cost Participation Program  (savings of $773,000 in 2008-2009 State Budget year)
* Approved proposal to reduce Regional Center operations budget through continuation of "Cost Containment Measures" (reduction of $20,496,000 in 2008-2009 State Budget)
* Approved proposal to reduce Regional Center Community Placement
Plan Operations by 10% (reduction of $660,000 in 2007-2008 State Budget year and another $2,000,000 in the 2008-2009 State Budget year)
* Approved proposal to reduce Regional Center Operations for HIPAA Implementation by 10% ($23,000 in 2007-2008 State Budget year and  $71,000 in 2008-2009 State Budget year)
* Approved proposal to reduce Clients’ Rights Advocacy at State Developmental Centers by 10% (reduction of $39,000 in 2008-2009 State Budget year and another $119,000 in the 2008-2009 State Budget year)
* Approved proposal to eliminate vacant Peace Officer positions at Porterville Developmental Center in Kern County (reduction of $181,000 in 2007-2008 State Budget year and another  $547,000 in the 2008-2009 State Budget year) 
* Approved proposal to eliminate 6 vacant audit staff positions at Department of Developmental Services headquarters (reduction of $119,000 in 2007-2008 State Budget year and another $362,000 in the 2008-2009 State Budget year)

MENTAL HEALTH SERVICES

EPSDT

Approved significant changes proposed for Early and Periodic Screening, Diagnosis & Treatment (EPSDT) Program by: * Reduced rates and eliminate cost of living adjustment (COLA)
* Reduced Schedule of Maximum Allowances
* Eliminated COLA (Home Health Market Basket)
* Require a 6-month Reauthorization and Reduce the Cost per Client (Require a 6-month reauthorization and  reduce cost per client by Department of Mental Health Oversight)

OTHER CUTS

* Reduce Caregiver Resource Centers by 10%  (reduction of  $400,000 2008-2009 State Budget year)
* Reduce funding for the Cathie Wright Technical Assistance Center (reduction of $10,000 2008-2009 State Budget year)
* Approved Legislative Analyst Office recommendation to reduce State Hospitals to Reflect Less Caseload (reduction of $12,600,000 for the 2008-2009 State Budget year)  

* Approved reduction in some Department of Mental Health administration costs (reduction of $722,000 2008-2009 State Budget year)

SENATE BILLS CONTAINING CUTS & CHANGES TO STATE LAW

The Senate Budget and Fiscal Review Committee implemented the proposed cuts and changes in State law by approving the following bills (the "x" means it is a special session or extraordinary session bill and not a regular session bill). 

SB 1x - as amended Wednesday evening (February 13) contains the budget line items with reductions

 

The following are legislative budget related ("trailer") bills, as amended February 13th,  that make the necessary changes in state law where necessary to make reductions or cuts to the current budget or make changes that will make cuts effective immediately on July 1, 2008:  

SB 2x - education

SB 3x - health, Healthy Families, regional centers, developmental centers, Medi-Ca;

SB 4x - human services including CalWorks, SSI/SSP

SB 5x - transportation

SB 6x - general government

SB 8x - Yacht loophole

Note: there is no SB 7x

 

NEXT STEPS

SENATE FLOOR

* The actions by the Senate Budget and Fiscal Review Committee still need final approval on the Senate Floor.where a vote is scheduled for Friday. 

ASSEMBLY

* The Assembly Budget Committee had cancelled its scheduled hearing today and will likely meet tomorrow (Thursday). 

* Assembly Floor will need to approve proposals. 

BUDGET SUBCOMMITTEES

* Legislative budget subcommittees will begin to hold hearings on next year's budget in March through early May. 

 

 

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