August State Policy Update – Budget

Budget Conference Committee Update

Senate and Assembly leadership release their plan for balancing the State Budget: It provides for a tax reform package that would generate $1.8 billion in 2010-11 and $3 billion in future years. It proposes to raise two taxes that are deductible on federal income taxes – the personal income tax and vehicle license fee – while reducing the state sales tax. The proposal states that all income groups would, after deductibility on federal taxes, experience an overall net tax deduction. Based on this additional revenue, the proposal rejects the elimination of Adult Day Health Care and In-Home Supportive Services as well as reductions to Medi-Cal services.

Conference committee actions:

  • Alzheimer’s Day Care Resource Centers: partially restored funds to approximately $3 million
  • Caregiver Resource Centers: rejected Assembly partial restoration so funding will remain at the 2010 level
  • Long Term Care Ombudsman: provided $1.9 million from a new Skilled Nursing Facility Quality and Accountability Fund.  This is in addition to $4.2 million from other funds, for a total of $6.1 million
  • In-Home Supportive Services: adopted a $250 million reduction.  About $190 million of this will be offset by a new provider fee (no impact on the IHSS worker or recipient) that will draw down additional federal money.  The Governor is still seeking a $750 million reduction.
  • Quality improvement measures in nursing homes: adopted important new requirements to increase compliance with the 3.2 hours/patient staffing standards.  Other quality measures include immunizations, physical and chemical restraints, pressure ulcers, direct care staff retention, and resident and family satisfaction.  Increased auditing and penalties for violations of the 3.2 staffing standard are added.  This is a significant victory for the Alzheimer’s Association and others who have maintained the nursing home rate reform law did not have sufficient quality improvement accountability measures.
  • Elimination of Department of Aging and block granting of Alzheimer’s Day Care Resource Centers’ funds: this proposal is no longer being actively considered.

CAVEAT: While we are encouraged by actions to restore Alzheimer’s Day Care Resource Centers’ funding and reject elimination of Adult Day Health Care, until all the budget negotiations with the Legislature and the Governor are complete, these issues as well as the Alzheimer’s Disease Centers funding remain vulnerable.  We are encouraged that there appears to be bi-partisan support for the IHSS provider fee, but the level of cut beyond that has not been agreed to by the Republicans or the Governor.  There is still no indication when the budget will be completed.

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