SVCN Overview Of Budget Implications For Client Services

1. SVCN Overview Of Budget Implications For Client Services March 9, 2011 Prepared by Patricia Gardner SVCN Executive Director Angelica Cortez, Public Policy Assistant Nima Shahidinia, Public Policy Intern

2. Overall Impact • State funds for services to clients in all realms will be reduced. • Low income clients will have more co-pays and fees. • Cuts are focused on poor children, families, seniors and the disabled. • Education, social services, housing, homeless, youth services, foster care, mental health, drug and alcohol, health care, in home support services (IHSS)—ALL will be impacted.

3. Key Issues to Watch • Realignment of funds and program responsibilities to the county, shifting control from state to local control—a double edge sword, but it does have some opportunities. • Elimination of redevelopment agencies, whichwill impact all affordable housing, housing department, and economic development • State may be willing to sacrifice federal revenue that requires a state match to reduce state share of cost.

4. State Budget Review • We will need sources of revenue in California • Deficit figures: $26.6 B • Plan is to close the deficit gap and leave a $1.1B reserve • $12.6 B will come from state spending cuts • $12.0 B will come primarily from taxes and realignment • $3.2 B will come from “other solutions” • We will need continuation of taxes to be on the June ballot • Personal Income Tax Rates • .25% continuation (expired after 2010) • VLF (Vehicle License Fees) • .5% continuation (expires June 30, 2011) • Sales tax • 1% continuation (expires June 30, 2011) • Other revenue, fees, taxes may surface over time.

5. What we don’t know • Impact of Realignment • Will there be additional Pension or Labor Negotiation Impacts • Will the state legislature make changes in the cuts and revenue strategies? • Fluid movement of the budget, daily and weekly changes Conference Committee Daily Reports • Compromise until there is 2 Republicans in each house to vote for budget • Will the revenue measures get to the ballot?

6. Impact to the Safety Net • Loss of Medical and Emergency Health Care • Increase in Homelessness • Unemployment Rate impacts ability for low income families to get back on their feet • These cuts will have an increased cost to taxpayers through higher cost service in the hospitals and jails

7. Healthy Kids/Families • Poor families will have to stretch to cover • Increased premiums • Increased co-payments

8. FIRST 5 • Statewide Impact – $1 B, statewide is needed from First 5 • Governor plan was to take 50% from reserves 50% ongoing • Conference Committee is recommending only 50% from reserves one time- This is a better plan for county services • Additional Impact is the declining 6% – 10% every year due to decline in tobacco tax revenue.

9. FIRST 5 • Action Alert to Local Legislature • Support the Conference Committee • Don’t take to the Ballot • Don’t treat all reserves as equal • SCC FIRST 5 has a multi-year approach and will commit our reserve to the services-multi year • FIRST 5 prepares kids for our educational system and is part of early education readiness

10. Mental Health • Mental health realignment details will follow. • EPDST temporarily funded by Prop 63 for 2011 – 2012 • Learning more about firewall implications • Watching to see whether any base dollars are lost to match federal dollars • Watching MHSA funds and any changes either locally or in realignment

11. Drug and Alcohol • Drug and Alcohol abuse hits all of our systems of care. • Shifting inmates to Counties will require DAD services, but will the money follow in realignment? • Emergency Housing Beds will be lost for the severely disabled due to alcohol abuse. • Loss of overall DADS beds resulting in: • Increased law enforcement costs • Longer waiting lists for services • Increased Homelessness

12. Housing and Homelessness • State reductions to TANF will impact thousands of clients in this county. • State reductions to SSI: max monthly grant for individuals would drop from $845 to $830. • Housing program are experiencing the loss AARA funds which were available last year but no longer available. • Cuts by FEDERAL HUD and CDBG will limit funds for rental assistance and emergency aid and could create larger housing problems.

13. Health Care • Poor people may not able to afford health services, which will impact our emergency rooms and community clinics with more expensive health needs. • Implementation of co-pays will be a burden on the poor and deterrent for seeking early health services. • More people will need help with emergency bills and basic costs for prescriptions. • Manyprivate Medi-Cal doctors no longer treat patients due to low payment rates. Lowering payment rates will exacerbate this problem and hurt those most in need. • This is a big issue in rural areas where community clinics are not readily available.

14. Health Care • Medi-Cal Co-Pays (there have been changes from the Governor’s original proposal) • $5 co-payments on physician/clinic/dental/pharmacy visits • $50 co-payment on emergency room visits • $100-$200 per day co-payment for hospital stays • Soft” cap on doctor visits; 7/year and on prescription drugs; 6/month more services will require physician certification) • Coverage Elimination • Elimination of Medi-Cal coverage of nutritional supplements, except for those with feeding tubes • Elimination of over-the-counter cough and cold medicine • Elimination of ADHC services for an alternative program under a new federal waiver

15. CalWorks • Statewide Calworks will be reduced by 25% reducing client grants and welfare to work services • Current 60-month time limit was reduced to 48 months: • Approximately 1,900 families in Santa Clara County, • Impact to over 3,900 children

16. CalWorks • Cash Grants will be reduced by 8% by July 1 • Reduction of maximum monthly grant for family of three in high-cost counties ($694 – $638) • Reduction of funding counties use to provide welfare-to-work services and child care ($427 M statewide) • In addition to $375 M statewide cuts to counties’ CalWORKs funding in FY 2009-2010 and FY 2010-2011 budget agreements

17. Childcare • Calworks Elimination of childcare for 11- and 12-year-olds • County wide Fewer subsidized slots will be available • Lowering eligibility qualification from 75% SMI to 70% SMI (Standard Monthly Income). There many families will now not qualify for subsidized childcare • Switching the burden of cost for childcare for the working poor by increasing parent to be collected by the provider

18. Foster Care • Transitional Housing Placement Program (THPP) is for Foster Youth (ages 16 – 18). Provides up to two years Transitional Housing. • A Group Home bed ($6,000-$9,000) bed, on average, costs the County $4,000 per month per kid, versus a THPP ($3,100) bed. • Reducing the number of THPP beds/slots will increase the county’s cost to serve the same youth who will have to remain in Group Home Care.

19. Justice Realignment Ideas • Jail/Justice System Realignment • Look at realignment of Jail funds to a broader system • MH, DADs Job Training. Education • Move to less restrictive environments • Make better use of adult THU models • Change from Incarceration to intensive case management; step down services from Jail to the Community—steps toward permanent housing • Alcohol Drug Residential programs

20. Food and Shelter • Last year, there was an overall 30-40% increase in need. • Cuts from local government will create more revenue loss for emergency services. • An increase in bankruptcy and foreclosure impacts hit families and seniors. • Ability to for low income families and seniors pay rent is in jeopardy due to cuts in other areas.

21. Food and Shelter • Cuts in IHSS and adult day health care (ADHC) forces seniors and the disabled into more costly nursing homes. • Spending close to $43 K per year, as opposed to spending much less with community support • Conference Committee recommends no reductions in hours of service and no changes to domestic services (e.g. shopping and laundry). • Governor proposes eliminating services for recipients without doctor’s certification.

22. Impact Examples • Seniors on Medi-Cal receiving Adult Day Health Services will be turned away and forced into more expensive skilled-nursing facilities. • Dr. visit co-pays increase, poor people will not be able to afford health services, which will impact our emergency rooms and community clinics with more expensive health needs. • Increase in homelessness in our community and on our streets, right now people are being turned away from the cold weather shelters.

23. More poor people will need to pay higher fees for health care with limited visits and services. • Low income families will be faced without subsidies for childcare that enable them to work. • Young teens with children may have no housing. • Increase in crime due to less prevention programs. • Shifting of inmates coming into our community for jail and auxiliary services such as drug and alcohol, mental health, will be even greater.