CDCAN DISABILITY RIGHTS REPORT
CALIFORNIA DISABILITY-SENIOR COMMUNITY ACTION NETWORK
JUNE 16, 2015 – LATE AFTERNOON
ADVOCACY WITHOUT BORDERS: ONE COMMUNITY – ACCOUNTABILITY WITH ACTION
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BUDGET DEAL REACHED – ELIMINATES NEARLY ALL OF RATE AND SPENDING INCREASES BY LEGISLATURE EXCEPT FOR CHILD CARE, EXPANSION OF MEDI-CAL FOR OVER 175,000 CHILDREN REGARDLESS OF IMMIGRATION STATUS AND RESTORATION OF 7% SERVICE HOURS FOR ALL IHSS RECIPIENTS FOR AT LEAST ONE YEAR
Governor Calls Two Special Sessions – One Focusing on Medi-Cal & Health Care Costs Including Provider Rates for Medi-Cal and Developmental Services That Would Need To Be “Sustainable” and Funded Through Either New Managed Care Organization Tax and/or Other Funding Source But Not General Fund- Says State Faces Over $1 Billion in Cuts to Health and Human Services Next Year If the New Managed Care Organization Tax Is Not Extended – Special Session Will Convene
SACRAMENTO, CA [CDCAN LAST UPDATED 06/16/2015 3:40 PM] – Prevailing on almost every major revenue and spending issue, Governor Edmund G. “Jerry” Brown Jr. today announced at a press conference at the State Capitol with Democratic legislative leaders Assembly Speaker Toni Atkins (Democrat – San Diego) and Senate President Pro Tem Kevin de León (Democrat – Los Angeles), a budget deal that largely reflected his proposed spending plan as revised in May, using his estimates of revenues and eliminating nearly all of the rate increases in health and human services and other spending increases, including those impacting Medi-Cal and developmental services. While details are still emerging, it appears that spending increases made by the Legislature impacting CalWORKS, SSI/SSP grants, restoration of Medi-Cal optional benefits eliminated in 2009 were also removed from the budget deal. [CDCAN will issue full report when more details become available].
The announcement of the budget deal stunned advocates and others, coming less than 24 hours after the Assembly and State Senate passed their version of the 2015-2016 State Budget that included significantly higher revenue estimates that the Governor did not agree with and increased spending for health and human services that the Governor opposed, citing limited on-going state resources.
The budget deal did contain some increases, including a rate increase for child care providers and increased spending for child care; expansion of Medi-Cal coverage for over 175,000 children regardless of immigration status; and restoration of a 7% across-the-board cut in service hours for all In-Home Supportive Services (IHSS) recipients for at least one year.
Also remaining in the budget is the Governor’s previous proposed funding for overtime for IHSS workers and supported living services, in-home respite services and personal assistance services to be implemented if the US Department of Labor prevails in a federal lawsuit that currently has put on hold federal regulations removing the exemption of overtime requirements for those homecare workers. A resolution in that lawsuit that would allow the federal regulations to go into effect is not expected by policymakers until late summer or early fall – and if appealed to the US Supreme Court (and the court takes the case), the delay could go into next year. Not likely to survive in the budget package that will go to the Governor – at least for now – is trailer bill language that would “remove any barrier” to the implementation of overtime – meaning that California would implement overtime no matter what happens at the federal level. Advocates are reportedly working on alternatives proposals and ideas for the State to implement overtime.
The Governor’s proposals for increases, such as adjustments to regional center funded providers for implementation of the new State sick leave policy for providers who don’t currently provide that level of sick leave, and implementation of the increase in the State minimum wage in January 2016 – though not covering costs related to exempt staff – also remain in the budget, as does increased funding for caseload growth and additional funding (called an augmentation) to cover a shortfall in the current year (2014-2015 State Budget) in developmental services.
To view the archived video recording of the entire press conference go to this CalChannel link (note: actual press conference doesn’t start until 20 minutes into the video): http://calchannel.granicus.com/MediaPlayer.php?view_id=7&clip_id=2973
In his proclamation for a special session on healthcare funding, the Governor warned that if a revised Managed Care Organization tax is not approved by the federal government and the $1.1 billion of funding from it does not materialize in the 2016-2017 State Budget year than over $1 billion in spending cuts – likely to health and human services – would be necessary to offset that lost revenue.
The Legislature will likely later this week or early next week pass a revised budget bill taking out those spending increases and revenue estimates – referred to sometimes as “budget junior” – and budget trailer bills not released or taken up for a vote yesterday covering health and human services, education and other areas reflecting the terms of the budget agreement.
“This is a sound, well thought-out budget,” the Governor said at the press conference today, adding that “yet, the work never ends and in the coming months we’ll have to manage our resources with the utmost prudence and find more adequate funding for our roads and health care programs.”
Assembly Speaker Atkins said at the press conference that “this version of the budget makes some very strong improvements for schools, higher education, child care and Medi-Cal services and creates a state Earned Income Tax Credit. But this is not a return to the bad old days of spending beyond our means…”
Senate President Pro Tem De Leon said that the budget agreement “…strikes a responsible balance between strengthening our long-term fiscal foundation and investing right now in the economy of today and the workforce of .”
HIGHLIGHTS OF BUDGET AGREEMENT
While details are not yet available on the specifics of the agreement, the following information was released by the Governor’s office on the highlights of the budget deal:
Eliminated nearly all of the spending increases included in the budget as passed yesterday (June 15th) by the Legislature, except for child care and the restoration of the 7% across-the-board in service hours for all In-Home Supportive Services recipients for at least one year; and expansion of Medi-Cal for over 175,000 children regardless of immigration status.
The agreement includes $14.3 billion for the K-12 system and community colleges, including $6 billion to continue to implement the Local Control Funding Formula which targets increased resources to students who face what the Governor and Legislature say are “the greatest challenges”.
The agreement includes, as proposed by the Governor in May, the first-ever California Earned Income Tax Credit ($380 million) to help the state’s poorest working families.
PAYING DOWN DEBT:
The agreement pays down billions in debts, including completely paying off school deferrals ($1 billion) and debts owed to local governments since 2004 ($765 million). The agreement also completely retires $15 billion in Economic Recovery Bonds used to cover budget deficits as far back as 2002, as well as $3.8 billion in mandate debt owed to K-14 schools.
RAINY DAY FUND:
The agreement saves $1.9 billion in the state’s Rainy Day Fund as required by Proposition 2, bringing the balance to $3.5 billion.
ADDITIONAL SPENDING INCREASES:
The budget agreement called for some spending increases paid for, according to the Governor’s office, “…by redirecting spending and using identified savings, including a reform of the Middle Class Scholarship program and correcting an error in the estimate for Medi-Cal, the budget agreement can afford additional spending…” including:
IN-HOME SUPPORTIVE SERVICES
$226 million on a one-time basis to restore the 7 percent reduction in service hours for In-Home Supportive Services.
MEDI-CAL EXPANSION FOR CHILDREN
$40 million to expand Medi-Cal to cover all low-income undocumented children effective ($132 million when fully implemented).
$265 million to fund 7,000 additional preschool slots and 6,800 child care slots, plus a rate increase for all child care providers.
$97 million over the January budget for the California State University to expand enrollment and focus on increased success.
TEACHER EFFECTIVENESS BLOCK GRANT
$500 million (funded under Proposition 98) for a one-time teacher effectiveness block grant.
GOVERNOR CALLS TWO SPECIAL SESSIONS INCLUDING ONE OF HEALTH CARE/DEVELOPMENTAL SERVICES/IHSS FUNDING
Governor Brown’s also announced that he is calling two separate special sessions of the Legislature, one focusing on health care costs including those impacting developmental services, which will convene on and the other focusing on California’s roads, highways and other transportation related infrastructure issues.
In his proclamation for the special session on health care funding, the Governor warned that the State’s General Fund “cannot afford to provide additional rate increases for providers of services for Medi-Cal recipients and consumers with developmental disabilities” and that any such increase would need to be funded from the new Managed Care Organization tax and/or from some other funding source. That may prove to be challenging with the State’s revised proposal still not approved by the federal government.
In addition the Governor, in that same proclamation, said that any such increase would also have to “establish mechanisms so that any additional rate increases expand access” and “increase oversight and the effective management of services provided to consumers with developmental disabilities through the regional center system…”
But the Governor also warned that if the necessary funding cannot come from a revised Managed Care Organization tax and/or alternative sources then it would be “necessary to prevent over $1 billion in program cuts next year”.
Since 2005, the state has levied a tax on Medi-Cal managed care plans. The revenues are matched by the federal government and used to both increase payments to Medi-Cal providers and offset health care costs that would otherwise be paid from the General Fund. This funding mechanism has helped the state pay for the increased number of Californians receiving coverage under federal health care reform.
The state’s current managed care organization (MCO) tax structure fails to comply with new federal requirements that such a tax be broad-based and not limited narrowly to Medi-Cal plans. The current structure, which expires at the end of fiscal year 2015-16, generates $1.1 billion.
The Governor’s January 2015-2016 budget proposed a revised Managed Care Organization tax that would be levied on a per-enrollee basis and cover most health care plans regulated by the Department of Managed Health Care. That proposal is still being finalized and requires eventual approval from the federal government.
In the special session, the Governor proposes that the Legislature enact “permanent and sustainable funding to provide at least $1.1 billion annually to stabilize the state’s General Fund costs for Medi-Cal, sufficient funding to continue the restoration of the 7 percent of In-Home Supportive Services hours and funding for additional rate increases for providers of Medi-Cal and developmental disability services”.
WHAT IS A SPECIAL SESSION?
Officially known as an “Extraordinary Session” but more commonly referred to as a “special session”, the State Constitution authorizes a governor to call the Legislature into a “special session” by proclamation that contains certain subjects. The special session by the Legislature is limited to those subjects in the proclamation, though the Legislature can consider subjects related to those specified in that document.
Legislative deadlines under the “regular session” do not apply and the special session can run at the same time for the entire two year length of the Legislature’s two year regular session (n example of this is the Legislature meeting on June 19th, for a regular floor session but wanting to convene the special session. They have to “adjourn” the regular session, convene the special session, conduct business, then adjourn the special session and reconvene the regular session again. The same applies to additional special sessions).
There are committees – usually the same committees as in the regular session – that can hear special session bills, and people can make comments on those bills as they would for a regular session bill.
Special Session bills passed by the Legislature and signed by the Governor take effect on the 91st day following the adjournment (not recess) of the special session, rather than the following January 1st,which is the effective date for bills passed by the Legislature and signed by the Governor for regular session measures.
ASSEMBLY SPEAKER ATKINS REMARKS AT PRESS CONFERENCE
“Other than the budget the Assembly and Senate passed yesterday, this is the best budget we’ve seen in years. This version of the budget makes some very strong improvements for schools, higher education, child care and Medi-Cal services and creates a state Earned Income Tax Credit. But this is not a return to the bad old days of spending beyond our means. This budget builds total reserves by more than $4.6 billion and pays down $1.9 billion in debts. If revenues grow more in line with the LAO projection than with the Department of Finance numbers that this budget is based on, then reserves will grow even higher. But despite this being such a good budget, we know this is just one step and we have more work to do.”
SENATE PRESIDENT PRO TEM DE LEON REMARKS AT PRESS CONFERENCE
Senate President Pro Tem De Leon made the following remarks at the press conference with the Governor and Assembly Speaker Atkins at the State Capitol this afternoon on the budget agreement:
“This has been a true collaboration with the Assembly, Senate and the Governor — all working together as responsible stewards of the taxpayer dollar focused on the long-term economic growth of California. This budget strikes a responsible balance between strengthening our long-term fiscal foundation and investing right now in the economy of today and the workforce of.”
ASSEMBLY REPUBLICAN LEADER KRISTIN OLSEN STATEMENT
The following statement was released this afternoon by Assembly Republican Leader Kristin Olsen (Republican – Modesto):
“The Governor was wise to heed the call of legislative Republicans to base the state budget on realistic revenue projections and reject the Democrat spending spree. State government should always budget like Californians do – based on what we know we will have to spend, not what we hope to earn.
There is still much work to be done to get the majority party to stand with Californians on their top budget priority – water. We must work together to move storage, desalination and recycling projects that will increase water supply out of bureaucracy and into construction.”
LINKS TO PROCLAMATIONS
Health Care Financing Special Session – PDF Document Copy (2 Pages):
Transportation Infrastructure Special Session – PDF Document Copy (2 Pages):
TEXT OF PROCLAMATION FOR SPECIAL SESSION ON MEDI-CAL AND DEVELOPMENTAL SERVICES PROVIDER RATES & HEALTH CARE COSTS
The following is the complete text (transcribed by CDCAN) of the Governor’s proclamation calling a special session, to be convened starting June 19th, , focusing on legislation for “…permanent and sustainable funding” from a new managed care organization tax and/or other sources to provide at least $1.1 billion to “stabilize” the State’s general fund costs to Medi-Cal; provide continued funding of the 7% restoration of IHSS service hours beyond 2015-2016; and to “provide additional rate increases” for providers of Medi-Cal and developmental services.
BY THE GOVERNOR OF THE STATE OF CALIFORNIA
WHEREAS the state’s recent expansion of health care coverage has resulted in more than four million additional Californians receiving coverage through Medi-Cal; and
WHEREAS to date, the managed care organization tax has provided a stable source of funding to help pay for the costs of the health care expansion; and
WHEREAS the federal government has issued guidance to the state that it cannot extend the managed care organization tax in its current format; and
WHEREAS the state will be forced to make more than $1 billion in program cuts beginning next year if the managed care organization tax is not extended; and
WHEREAS the state’s General Fund cannot afford to provide additional rate increases for providers of services for Medi-Cal recipients and consumers with developmental disabilities; and
WHEREAS the state’s General Fund cannot afford to permanently maintain a restoration of 7 percent of hours in the In-Home Supportive Services program; and
WHEREAS these extraordinary circumstances require the Legislature of the State of California to be convened in a special session.
NOW, THEREFORE, I, EDMUND G. BROWN, JR., Governor of the State of California, in accordance with Section 3(b) of Article IV of the Constitution of the State of California, hereby convene the Legislature of the State of California to assemble in extraordinary session in Sacramento, California on the 19th day of June 2015, at a time to be determined, for the following purposes:
To consider and act upon legislation necessary to enact permanent sustainable funding for a new managed care organization tax and/or alternative fund sources to provide:
a. At least $1.1 billion annually to stabilize the General Fund’s costs for Medi-Cal; and
b. Sufficient funding to continue the 7 percent restoration of In-Home Supportive Services hours beyond 2015-2016; and
c. Sufficient funding to provide additional rate increases for providers of Medi-Cal and developmental disability services.
To consider and act upon legislation necessary to:
a. Establish mechanisms so that any additional rate increases expand access to services; and
b. Increase oversight and the effective management of services provided to consumers with developmental disabilities through the regional center system; and
c. Improve the efficiency and efficacy of the health care system, reduce the cost of providing health care services, and improve the health of Californians.
I FURTHER DIRECT that as soon as hereafter possible, this Proclamation be filed in the Office of the Secretary of State and that widespread publicity and notice be given of this Proclamation.
IN WITNESS WHEREOF, I have hereunto set
My hand and caused the Great Seal of the
State of California to be affixed this 16th day of
EDMUND G. BROWN, JR.
Governor of California
Secretary of State
CDCAN – MARTY OMOTO YOUTUBE CHANNEL
A CDCAN (Marty Omoto, family member and advocate) youtube channel was set up and has several videos dealing with current – and previous state budget issues, disability and senior rights, and advocacy.
To see the current videos, including March 2014 San Andreas Regional Center Aptos Legislative Breakfast, January 2014 panel discussion on services for adults with autism spectrum and related disorders in Palo Alto, and older videos including video of April 2003 march of over 3,000 people with developmental disabilities, families, providers, regional centers and others from the Sacramento Convention Center to the State Capitol (to attend and testify at budget hearing on proposed massive permanent cuts to regional center funded services, go to the CDCAN (Marty Omoto) Channel at: https://www.youtube.com/channel/UCEySEyhnr9LQRiCe-F7ELhg
More videos – including new current videos (an interview with longtime advocate Maggie Dee Dowling is planned, among others) – plus archive videos of past events – will be posted soon.