|Budget Issue:||LAO analysis of Governor's 2012-13 budget proposal for the Department of Developmental Services.|
|Program:||Department of Developmental Services|
|Finding or Recommendation:||Recommend the Legislature approve the Governor's proposals to achieve $200 million in General Fund savings through "trigger cuts," and $14.4 million General Fund through Developmental Center staffing level adjustments. Recommend the Legislature seek additional savings through an extension of the 4.25 percent payment reduction and through implementing means testing and other measures.|
The budget proposes $4.7 billion from all funds for support of the Department of Developmental Services (DDS) in 2012-13, which is a 5 percent increase above estimated current-year expenditures. General Fund expenditures for 2012-13 are proposed at $2.7 billion, an increase of $173 million, or 7 percent, above estimated current-year expenditures. Other fund sources include federal funds and the California State Lottery Education Fund.
Community Services Program Budget Proposal. The budget proposes $4.1 billion from all funds ($2.3 billion General Fund) for the support of the Community Services Program in 2012-13. This represents a $225 million ($181 million General Fund) increase, or almost 6 percent, over estimated current-year spending. The increase is a result of caseload growth, higher utilization rates for services, and other program changes. Of the total $4.1 billion in proposed funding, $537 million is for Regional Center (RC) operations and $3.7 billion is for the purchase of services. The Community Services Program budget plan includes the following major proposals:
Developmental Centers (DC) Program Budget Proposal. The budget proposes $559 million from all funds ($284 million General Fund) for the support of the DCs in 2012-13. This represents a net decrease of $9.8 million General Fund, approximately 3 percent below estimated current-year expenditures. The DC budget plan includes the following major proposals:
We have the following recommendations on the Governor’s major proposals:
Here we provide the Legislature with options to achieve savings in addition to the Governor’s proposals.
Extend Payment Reduction. The Governor’s budget proposes an increase of $173 million in General Fund support for DDS over the estimated current-year budget. This increase is largely due to the expiration of the 4.25 percent provider payment and RC operations reduction. We estimate the department could achieve General Fund savings of about $110 million by extending the 4.25 percent provider payment and RC operations reduction in the budget year.
Impose Means Testing. The LAO has previously recommended means testing as a way to lower costs and slow growth in RCs. Means testing is when eligibility is limited to persons who demonstrate they do not have the means to pay for the services themselves, or that paying for the services would present a financial hardship. Assuming 400 percent of the federal poverty level, we estimate means testing of RC consumers could achieve approximately $57 million in General Fund savings in the budget year. For more information on means testing, please see our February 2011 report, The 2011-12 Budget: Options to Achieve Savings in the Regional Center System. The report can be found here: http://www.lao.ca.gov/analysis/2011/health/regional_center_020111.aspx