On February 19, 2009, CFILC posted an article on our website that described some of the details of the budget compromise that recently passed the Legislature by an extremely narrow margin. The budget compromise resolved both the shortfall and the budget for the 2009-2010 Fiscal Year.

The website posting was written based upon press releases issued by the offices of Assembly Speaker Karen Bass and Senate Pro Tem Darrell Steinberg. Since that time, the California Budget Project (CBP) released its own more detailed budget analysis. This article will focus on the revised figures in the CBP report.

Given the magnitude of the budget deficits, CFILC, the Systems Change Network, and disability advocacy organizations throughout the State launched numerous advocacy campaigns urging legislators to protect programs and services for people with disabilities. Although in the end the disability community will be once again called upon to bear a disproportionate share to achieve a balanced budget, we succeeded to the extent that we successfully avoided some even more severe cuts that were proposed by Governor Arnold Schwarzenegger and the Republican Caucuses of both the Assembly and the Senate.

In the final analysis, however, perhaps the greatest and most important lesson that we have learned as a result of the seemingly endless series of negotiations and budget battles is that political ideology has driven a permanent wedge between Democrats and Republicans. The “no tax” pledges made by the majority of Republican legislators carried the state toward a precipice that we barely avoided. Despite the fact every independent economist reported that California’s budget deficit could not be solved by budget cuts alone, the pebbles of the more detailed alternative budget proposals that were eventually released by the Republican leadership demonstrate just how far they were willing to go in cutting or eliminating programs that directly and indirectly affect seniors, poor and low-income families, and people with disabilities.

Surprisingly, two Republican legislators emerged as victims of the political infighting that characterized the polarization of the Republican Caucuses. In one stunning development, the Senate Republicans ousted Senate Minority Leader David Cogdill primarily because he had negotiated a tentative budget agreement that included substantial revenue enhancements. He was replaced by the ultra-conservative Senator Dennis Hollingworth, who had earned a reputation as hard line ideologue throughout his tenure in the Assembly. Cogdill’s ouster raised serious concerns that the budget compromise would blow apart once again, which would have thrown the state into a position in which the California State Treasury would be literally bankrupted of available cash.

The budget agreement that was passed by both Houses in the early morning of February 19^th depended upon the vote that was eventually cast by the second Republican victim, Senator Abel Maldonado, who today is one of the few surviving moderate Republicans left in the Legislature. Senator Maldonado earned important concessions from the Governor and the Democratic Leadership, including the removal of a proposed 12 cents per gallon increase in the state gasoline tax, suspending hikes in pay and per diem for legislators when the state is facing a budget deficit, and a June 2010 ballot measure that will ask voters whether they want to enact open primaries into California’s election laws.

As a result of his vote for the budget agreement, Senator Maldonado is a “marked” man in the Republican Party. His decision to move away from the publicly stated positions of the new Senate Republican Leadership and the members of his caucus to cast a principled vote certainly leaves his future political ambitions vulnerable to attacks from an angry Republican populace.

Firebrand conservatives are already threatening to “censure” all of the Republicans who voted in favor of the budget compromise in this weekend’s 3-day California Republican Party Convention. In addition, discussions are underway to launch a recall of Senator Maldonado. As the Legislature’s only Latino Republican lawmaker, his recall would seriously undermine the veracity of the Republican Party’s signals about recruiting more Latinos into their party.

***More Details About the Budget Compromise: Although future analyses of the impact of the state budget agreement will be required to more accurately portray the final outcome of the compromise, the bill includes a total of $40.8 billion in budget “solutions”, including $14.8 billion to close the revenue gap in the current Fiscal Year 2008-2009 Budget Act and $26.1 billion to balance the Fiscal Year 2009-2010 Budget Act.

The agreement also includes $14.1 billion in spending reductions, $11.1 billion in new and increased taxes, and $11.5 billion in new borrowing and the tradition “smoke and mirrors” budget accounting gimmicks that have been used in past budget bills. It is based upon an assumption that California will receive $5 billion from the sale of bonds backed by state lottery proceeds in 2009-2010 and also assumes that the voters will approve changes in the allocation of lottery proceeds. Finally, it assumes that the state will raise $5.9 billion from the sale of Revenue Anticipation Warrants (RAW), as well as $432.6 million in internal borrowing from several special funds.

The impact of the recently enacted Federal economic stimulus bill is an important additional factor that will indicate how some of the proposed state program and service cuts may be restored. The final level of the Federal economic stimulus funding for the state will automatically “trigger” the restoration those funds. If California does not receive at least $10 billion from the stimulus bill that can offset General Fund expenditures, additional cuts totaling $947.4 million and an additional tax increase of $1.8 billion would be triggered.

On the other hand, if California receives this level of Federal funding, the cuts and tax increase would not take effect and $5.9 billion of the Federal funds would be substituted for the proposed RAWs. The California Budget Project cautions, however, that the Legislative Analyst has raised concerns about the use of RAWs for budget balancing purposes, rather than strictly for cash-flow management. The concerns arise as a result of provisions that were added to the California Constitution by Proposition 58, which authorized the issuance of deficit financing bonds on a one-time basis.

***Spending Reductions Impacting People with Disabilities: Of course, it is difficult to determine exactly how people with disabilities will be impacted by spending cuts that indirectly affect the disability community, such as cuts in transportation funding that many people with disabilities rely upon to access local public transportation programs. It will take some time for these spending reductions to be analyzed with respect to how local government in particular can cope with a variety of state and local spending cuts that fund the administration of many different types of programs and services.

One positive development is that the budget bill does not reduce spending for Special Education categorical funding. However, to the extent that pupils with disabilities are enrolled in regular K-12 education programs or will be impacted by higher education spending cuts, there will be more shared burdens and shared sacrifices that are yet to be determined for these pupils and students with disabilities.

With respect to spending cuts that have a more direct impact on people with disabilities, the budget agreement would propose to do all of the following:

· Commencing May 1, 2009, does not pass through the 2009 Federal SSI COLA in the SSI/SSP Program for a savings of $79.8 million in 2008-2009 and $487.3 million in 2009-2010. This change would reduce the maximum monthly grant for an individual recipient from the current $907 to $870. It would also suspend the June 2010 state COLA in the SSI/SSP Program for a one-month savings of $27 million in 2009-2010 and an annual savings of over $300 million beginning in 2010-2011.

· Cuts Regional Center provider payments by 3 percent beginning on February 1, 2009 for a savings of $24.6 million in 2009-2009 and $60.2 million in 2009-2010. It further reduces these payments by 7.1 percent, beginning on September 1, 2009, for additional savings of $100 million in 2009-2010. The latter cut would only take effect if the state does not enact by September 1, 2009 Regional Center cost containment measure that achieve General Funds savings in that amount in 2009-2010.

· Suspends the July 2009 COLA for county operation of the Medi-Cal Program for a savings of $24.7 million in 2009-2010.

***Additional Cuts That Would Be Triggered if California’s Share of the Federal Economic Stimulus Bill Does Not Meet Its Anticipated Threshold

As previously discussed, the budget agreement provides for further spending cut contingencies if the state receives less-than-anticipated levels of Federal funding, that would:

· Reduce SSI/SSP grants by 2.3 percent for a cut of $268 million. Under this scenario, individual recipients would lose an additional $20 per month and couples would lose an additional $35 per month.

· Eliminate certain Medi-Cal optional benefits (primarily Dental) and reduce reimbursement rates for public hospitals by 10 percent for a savings of $183 million.

· Cap the state’s contribution toward the wages of IHSS workers at $9.50 per hour plus $0.60 for benefits. It would also require some IHSS recipients to pay a larger share of the cost of services they receive for a combined savings of $78 million.

***Assessment of the Impact of the Disability Community’s Advocacy Campaigns to Prioritize Funding for People with Disabilities

As we all know by now, the massive state budget deficit and continued opposition by Republican legislators to prior proposals submitted by Democrats created an unprecedented situation in which the public was generally excluded from any hearings relating to the final negotiations. The Governor and Democratic Leadership made a conscious decision to ensure complete non-disclosure of the details of the various proposals, and even high level moneyed special interest groups and lobbyists complained that they were unable to break through the veil of secrecy that prevailed near the tail end of the budget talks.

Senate President Pro Tem Darrell Steinberg indicated that it would have been impossible for these discussions to proceed if the various advocacy organizations and special interest groups learned any details about these proposals and launched advocacy campaigns to protect their interests. The disability community was heartened to hear that Senator Steinberg had publicly expressed his strong opposition to any drastic cuts in IHSS, characterizing IHSS home care workers as “People doing God’s business.”

A preliminary objective analysis on how the disability community fared seems to indicate that the advocacy campaigns undertaken by CFILC, the Systems Change Network, and our allied partners did make a difference. Checking back on previous proposals that had given an early indication that the Governor and the Republicans backed even further program cuts were topics of concern as these intense discussions proceeded. The fact that these proposed cuts were reduced and that many of our programs were placed on the front burner of restoration if Federal economic stimulus funding is forthcoming appears to be a clear indication that our messages were heard and resonated.

Of course, this does not mean that we can rest on our laurels or cut back on continued advocacy, particularly with respect to establishing stronger relationships with new Members and their staffs at both their Capitol and District Offices. Many of the new Members were sworn into office with little, if any, prior legislative experience and they relied heavily upon their leadership in casting their votes. We must keep in mind, however, that in our post-term limit environment that these new Members will eventually become committee chairs or part of future leadership teams. Therefore, we must continue to lobby them aggressively by educating them about our issues and our community. It should be viewed as a critically important investment.

Similarly, we must develop some workable strategies to educate Republican Members. It is a more formidable task because of their ideology and willingness to attack mavericks like Senator Maldonado if they break ranks. Yet, it is important to keep in mind that the budget agreement was fragile at best and could have been defeated if the newly installed Senate Republican Minority Leader had more time to muster his forces and move away from any compromise that included new revenues. It’s appalling to envision just how far downward our state would have gone without an agreement at this very specific point in time.

We have spoken in the past about the advocacy strategies that will be required to reach out to Republicans. It appears that they do not have a real concept about the true nature and profiles of people with disabilities. They fail to understand that they may actually represent thousands of people with disabilities who reside in their legislative districts---people who may not necessarily be active in advocating for programs and services, but who may be their neighbors, friends, or family members.

Our message about the overall cost-effectiveness of independent living is a core issue they may not necessarily fully comprehend, so we must redouble our efforts. It is possible that this budget compromise may be undermined if the May Revise indicates problems with growing caseloads or less-than-anticipated revenues. The fragility of the accord will also mean that the “no tax” adherents will alter their strategies to resist anything resembling the budget process in future budgets, so we must anticipate that our obstacles will become even more challenging.

***CFILC AND THE SCNETWORK COORDINATE SUCCESSFUL FEDERAL ADVOCACY CAMPAIGNS IN SUPPORT OF FEDERAL FUNDING FOR PEOPLE WITH DISABILITIES IN THE ECONOMIC STIMULUS BILL

As discussed in the preceding article, the final state budget agreement relied heavily upon Federal funding from H.R. 1, “The Economic Recovery and Reinvestment Act of 2009” that was recently signed into law by President Barack Obama. If California receives the projected infusion of Federal aid, we will be able to avoid more painful cuts and restore funding to a number of state programs and services for people with disabilities.

Although the 3-hour difference between Eastern Standard Time and Pacific Standard Time and the fast paced and moving targets that earmarked the negotiations between the White House and Congress were challenging, both CFILC and the Systems Change Network submitted hundreds and letters, emails, and telephone calls to Members of Congress urging support for funding for people with disabilities. The effort was highly successful with respect to securing $180 million in funding for Independent Living Centers, additional funding for Special Education and IDEA, and aid to states to help balance their budgets.

The Coalition for Human Needs also analyzed other provisions of the economic stimulus bill that are of special interest to the disability community, including:

A 13.6% increase in food stamp benefits;
$100 million in emergency food and shelter aid;
Extending unemployment insurance benefits to year’s end and hikes of $25;
One-time $250 payment to recipients of Supplemental Security Income (SSI);
$50 million for new program of capacity-building grants to non-profit organizations, to expand delivery of social services to people and communities affected by recession;
$1.5 billion in homeless prevention aid;
Additional funding (available through 9/30/10) of $175 million for STOP Violence Against Women Formula Assistance Program and $50 million for transitional housing assistance grants for victims of violence;
$500 million to serve low-income adults, including recipients of public assistance, covering supportive services and needs-related payments as well as employment/training services;
$120 million to allow nonprofits to add 24,000 older workers,
$400 million to school districts for preschool special education, and $500 million for State Grants for Infants and Families (with disabilities, birth through age 2);
$650 million for evidence-based clinical and community-based prevention and wellness strategies to address chronic illnesses;
The extension of the moratoria on the following final regulations through July 1, 2009: (1) Targeted Case Management; (2) School-Based Services; (3) Provider Taxes; and (4) Outpatient Hospital Services. Also states the sense of the Congress that the Secretary of HHS should not promulgate as final the proposed regulations related to Graduate Medical Education, Cost Limit for Public Providers, and Rehabilitative Services.

Perhaps an even more important development that promises future dividends is a clear evolution in the Federal public policy commitment on the part of the Obama Administration to meet the emerging needs of people with disabilities. Although it is still early to fully gauge what will eventually emerge, unlike his predecessor, President Barack Obama has clearly indicated his commitment to our issues throughout his presidential campaign and following his assumption of the presidency. Slowly but surely, the key players are being appointed and strategies are being developed to ensure that this commitment is genuine.

CFILC has been working more closely with NCIL and other disability advocacy organizations in Washington D.C. to give a California perspective to Federal issues affecting people with disabilities. The positive impact is evidenced by the final agreement to provide ILCs throughout the nation with $180 million in economic stimulus funding, which leaned more toward the $200 million allocated under the House-passed bill, rather than the lower $110 million figure put forth by the Senate.

CFILC and the SCNetwork have made Federal advocacy a high priority for 2009. We will include updates on these developments in future editions of Public Policy Perspectives.

***CFILC IS POISED TO SPONSOR A BILL IN THE CALIFORNIA STATE LEGISLATURE TO TRANSFER THE STATE ADMINISTRATION OF THE TRAUMATIC BRAIN INJURY (TBI) PROGRAM FROM THE DEPARTMENT OF MENTAL HEALTH TO THE DEPARTMENT OF REHABILITATION

As was discussed at the February 9, 2009 PPC Teleconference, CFILC has been working in conjunction with CFILC Board of Directors Chairperson Elsa Quezada and the Traumatic Brain Injury Services of California (TBISCA) to explore the feasibility of introducing a bill jointly sponsored by CFILC and TBISCA to transfer administrative oversight of the California Traumatic Brain Injury (TBI) Program. TBISCA is a membership organization of the seven sites that are currently contracted to provide programs and services for individuals with TBI.

Since its enactment into California law, the Department of Mental Health (DMH) has been the designated state agency to administer the TBI program. Over the years, serious concerns have arisen as to whether DMH is the most suitable state agency since its core mission is targeted to overseeing mental health programs, rather than rehabilitation for people with TBI-related disabilities. Although some individuals with TBI do experience problems relating to mental health issues, that is not necessarily the case for all of these individuals.

TBISCA has been discussing whether individuals with TBI would be bettered served by a more holistic range of services that are available to people with other types of disabilities under programs administered by the Department of Rehabilitation. Indeed, it is felt that the goals and objectives of the independent living movement are a better fit to the extent that people with TBI could benefit from counseling, job training and placement, and other supportive services that would help them live and work independently.

Since the Department of Rehabilitation currently administers independent living center programs operating in California, TBISC site administrators have explored the possibility of transferring those responsibilities from DMH to DOR. Most recently, CFILC Executive Director Teresa Favuzzi and CFILC lobbyist Charlotte Newhart and CFILC Public Policy Director have analyzed these issues and developed a proposed strategic plan to determine whether such a transfer is both feasible and advisable.

After we developed a Background Information Sheet on this issue, we approached several offices and secured an agreement from Assembly Member Wes Chesbro and Assembly Member William Monning to jointly author a bill to that effect. Both of the authors have TBI programs operating in their assembly districts. The bill will be soon introduced across the Assembly Desk and assigned a bill number that will enable the Assembly Rules Committee to refer the bill to the first policy committee having jurisdiction over the issue area.

Of course, securing support from both DMH and DOR and the Governor is a critical component to making that transfer. The bill is being offered as an effort to promote government streamlining and efficiency, as well as providing a better range of services for people with TBI.

On February 18^th, we participated in a very successful meeting that included state officials from the Health and Welfare Agency, the Department of Health Care Services, DMH, DOR, and other state agencies to discuss the legislative proposal. Although no final commitment could be made at the meeting in terms of supporting the bill or going neutral, there was a consensus that the proposal had merit.

There are numerous issues that need to be addressed relating to, among other things, the costs to the state in making that transfer, how existing and future contracts for services will be accommodated, the possible transfer of state personnel, and a host of other issues that need to be explored. However, the representatives of the state did agree to provide technical assistance and support to ensure that the Legislature would be fully informed about all of the issues that needed to be resolved to make that transfer.

The PPC will be discussing this in greater detail at the February 23, 2009 teleconference for possible recommendation to the Executive Committee and the Board of Directors. Future editions of Public Policy Perspectives will provide updated information about the Board’s decision and the status of the bill.