ASSEMBLY REPUBLICAN BUDGET PROPOSAL CALLS FOR MAJOR CUTS TO HEALTH & HUMAN SERVICES; SOME REPORTS OF POSSIBLE BUDGET DEAL IN SENATE

A budget proposal put together by Assembly Republicans, which calls for major additional cuts to education, health and human services programs, including those impacting people with disabilities will be considered in the Assembly as early as Wednesday morning (7/2). At this point, it is unlikely the Assembly Democrats will back the Assembly Republican plan.  Governor Davis, in a press conference this afternoon (7/1) said he would not sign the Republican plan if passed.

Meanwhile, there are conflicting reports that a possible budget deal is near in the Senate, though no details are available. The Senate is scheduled possibly to meet on Wednesday sometime to take up the budget. Senate Republicans were possibly going to present a series of amendments to the Senate Democratic budget proposal, that failed passage last week, on Thursday - though this may change if a reports of a budget deal are true.

The Assembly Republican budget proposal, originally released April 28, used the Governor Davis' proposed budget he submitted January 10, as the base for additional cuts, though this doesn't appear to be the case in all instances.  The Assembly Republican budget proposal updated, revised and released yesterday adds many additional cuts to health and human services, though in many cases it is not clear if they were reversing actions in the Assembly Democratic proposal from last week that restored many cuts, or adding to the cuts proposed in the revision of the proposed budget that the Governor released in May.
The Assembly Republican plan proposes additional major cuts, extends the financing of a $10 billion portion of the state's deficit from 5 to 6 years, and makes other reductions and savings without raising taxes or triggering the increases of vehicle license fees as a means to close the staggering state budget shortfall.

"Assembly Republicans are not interested in wasting any more time or taxpayer money responding to political 'drills'" Assembly Republican Leader Dave Cox (R-Fair Oaks) said, adding that "...this proposal represents a balanced solution that solves the problem."

Many Democrats, including Assemblywoman Judy Chu (D-Monterey Park, 49th District) were critical of the proposal that contained major cuts to health and human programs and services.  Advocates for people with disabilities, seniors, and people with low-incomes, while happy that the Republican proposal restored cuts to Medi-Cal providers that the Governor proposed in January, were also sharply critical of what they viewed as "staggering deep cuts" to critically needed services and programs.

Reportedly some elements of the Assembly Republican plan are also in the Senate Republican proposal, including limits on regional center spending, and statewide standards for the regional center budget that funds community-based services and supports (purchase of services) for people with developmental disabilities. The Assembly Republican plan also calls for an additional 15% cut in state operations, phased in, resulting in a reduction in 2003-04 of $400,000,000. There were no details how this would be achieved or specific impacts to each department, including Department of Developmental Services or Department of Rehabilitation or the Departments of Health Services (Medi-Cal) or Social Services (IHSS and SSI/SSP programs).

SUMMARY OF MAJOR CUTS IN ASSEMBLY REPUBLICAN PROPOSAL IMPACTING PEOPLE WITH DISABILITIES:
The Assembly Republican proposal released yesterday, calls for additional cuts for the 2003-2005 budget year (these cuts are in most cases in ADDITION to the cuts already proposed by the Governor - or in some cases, apparently in addition to the cuts proposed in the Assembly Democratic budget proposal. In some instances it is not clear. [note: it is not clear what the Assembly Republicans used as their baseline, since in some cases they refer (when they first released the proposal in April) that the cuts were in addition to the Governor's January proposed budget, yet in other cases it appears the Assembly Republicans were simply reversing actions made recently by the Democrats (proposing a cut that was less than the Governor's January proposal, but more than the May Revise, and different from the Assembly Democratic proposed reduction).
COMMUNITY-BASED SERVICES FOR PEOPLE WITH DEVELOPMENTAL DISABILITIES
Note: Presumably these cuts are in addition to the narrowing of eligibility standards, parental co-payments, and presumably cuts to program and service freezes, and cuts to regional center operations, cuts to Habilitation Services (work activity and supported employment) in the Governor's proposed budget in January and the May Revision  (it is not clear in some instances below). Implementation of purchase of service standards would - many advocates believe, result in the suspension or even elimination of the basic civil rights of people with developmental disabilities contained in the "Lanterman Developmental Disabilities Services Act". The impact, according to advocates, would be enormous, resulting in huge cuts to critically needed services.  The proposed spending cap - or expenditure limit would have a devastating impact - especially in the area of children with autism, where caseload growth has exploded in the last 5 years.
* Regional Center statewide purchase of service standards
Cut: -$50 million (2003-2004, though it is not really clear if this amount replaces the $10 million cut proposed by Assembly Democrats last week, or if its in addition to the Governor's proposed $70 million cut, as proposed in May)
* Expenditure limits on regional center purchase of services
Cut: -$97 million (2003-2004)
* Early Start funding shift from Department of Developmental Services to funding under Proposition 98 (the constitutional provision that guarantees a minimum funding for education)
Note: this is not a cut to the early intervention program, but it would presumably reduce spending ($59 million for 2003-04) within the education budget for other K-12 programs.
MEDI-CAL AND HEALTH
Note: the Assembly Republican proposal rejects the Governor's proposal to cut Medi-Cal provider rates and restores that funding (already in the Assembly Democratic and Senate Democratic budget plans) and also rejects the Governor's proposal to eliminate Medi-Cal dental and durable medical equipment optional benefits. The proposed elimination of the other optional benefits however impact people with disabilities, though the other cuts to Medi-Cal impact primarily people with low incomes (including seniors).
* Elimination of Medi-Cal optional benefits, except for durable medical equipment and dental
* Restriction of Medi-Cal dental benefits to $1,000 per year
Cut: -$6 million
* New Medi-Cal recipients who have disabilities to enroll in managed care programs
Cut: -$1 million
* New Medi-Cal recipients who are seniors to enroll in managed care programs
Cut: -$69 million
* Other reductions include reinstatement of quarterly status reports (-$43 million); rescind continuous Healthy Families eligibility for children (-$76 million); eliminate accelerated enrollment/Healthy Families bridge (-$6 million); exclude over the counter drugs from Medi-Cal coverage (-$8 million); Medi-Cal co-payments; rescind Healthy Families eligibility expansion [return back to 200% of the Federal Poverty Level] (-$56 million); many other state only Medi-Cal programs including Medi-Cal Dialysis Only and Dialysis Supplemental (-$341,000); Minor Consent Services (-$786,000); Medically Indigent Long Term Care (-$38,928,000); State Funded Abortions (-$27 million); and also the Children's Medical Services Branch Genetically Handicapped Persons Program (-$34,680,000); the Primary and Rural Health Care Systems' Rural Health Services Development Program (-$8,203,000); Indian Health Program (-$6,484,000); Rural Demonstration Project/Healthy Families Program (-$3 million); Child Health and Disability Prevention (-$50,634,000); Seasonal Agricultural and Migratory Workers Program (-$6,871,000); Family pact pROGRAM (-$63,462,000).
SUPPLEMENTAL SECURITY INCOME/STATE SUPPLEMENTAL PAYMENT (SSI/SSP)
Note: these cuts are in addition to the suspension of the cost of living adjustments for SSI/SSP in the Assembly Democratic budget proposal. The Assembly Republican proposal would also freeze CalWORKS cost of living adjustments for 3 years. Advocates claim that the cut to the "federal maintenance of effort" would be devastating to seniors, people with developmental and other disabilities, especially when coupled with the suspension of any cost of living adjustments.
* Reduces SSI/SSP grants to the federal "maintenance of effort" level
Cut: $-497 million
* Eliminates of SSP cost of living adjustment for 2004-2005 (and possibly longer)  Note: presumably this is in addition to the Governor's freeze
Cut: $77 million (2004-2005 budget year and possibly beyond)
SENIOR PROGRAMS
Note: the proposal would reject the Governor's proposed elimination of senior nutrition programs, but the moratorium on new adult day health centers, rejected by the Assembly Democrats earlier, is a serious reduction that was proposed by the Governor in May.
* Moratorium on new adult day health centers
Cut: -$21 million
IN-HOME SUPPORTIVE SERVICES (IHSS)
Note: While not impacting 2003-04 budget year, the freeze on providing state funds for IHSS wage increases for 2004-05 would have a tremendous impact on IHSS workers across the state.
* Freeze the state's portion of IHSS wage increases for 2004-05 budget year
Cut: -$57 million (2004-05 budget year)
* Eliminates the state only Medi-Cal Substantial Gainful Activity for aged, blind and disabled, medically needy program
Cut: -$195,100

WHAT DOES THIS ALL MEAN
* At this point, nothing, since it is highly unlikely the Assembly Republican proposal - as it stands now with additional deep cuts to health and human services, has any hope of passage tomorrow. However there may be possible areas of compromise (also in the Senate Republican budget proposal) that could lead to some budget deal - more likely in the Senate, as previously reported - especially with the rumors flying of a reported possible budget deal there.

NEXT STEPS
* SENATE: No floor session today (Tuesday), but conflicting reports that a possible budget deal is near in the Senate. Possible floor session scheduled for tomorrow (Wed 7/2) - though it is on the call of Senate President Pro Tem Burton.  Not clear how this impacts presentation of the Senate Republican budget proposal, which originally last week was to be considered and voted on possibly on Thursday sometime. That may all change if reports of a budget deal are true.
* ASSEMBLY: The Assembly is scheduled to meet at 10:30 AM, to consider and vote on the Assembly Republican budget proposal.  The proposal has little chance of passage.  No reports of any budget deal close on the Assembly side. Not certain if the Assembly Democrats will attempt another vote on their version of the budget - and much also depends if the Senate is actually close to a budget deal.