public policy perspective vol 1 no. 2

Public Policy Perspectives is a newly launched e-mail newsletter published by the California Foundation for Independent Living Centers (CFILC). Although it is primarily designed for use by our member Independent Living Centers and Advocates, it will be posted on the CFILC website (www.cfilc.org) for general use by individuals and organizations interested in monitoring issues of concern to people with disabilities.

CFILC is a statewide membership of 27 Independent Living Centers that are located throughout the State of California. Our member organizations provide a wide range of programs and services for over 350,000 people with disabilities. We are dedicated to fulfill our core mission is to assist our consumers in accessing the resources necessary to live and work independently in their communities. Advocacy efforts on behalf of people with disabilities is another major area of concentration.

At present, it is anticipated that the newsletter will be disseminated on an “as needed” basis and will be archived in our website. The newsletter will include reports on the status of CFILC’s legislative agenda and bill tracking reports, the ongoing programs and activities of the Systems Change Network, our collaborative work with the National Council on Independent Living (NCIL) on Federal legislation and budget initiatives, news relating to the California state budget process, and other topical news on State and Federal issues for people with disabilities.

We welcome your feedback and contributions. Please contact Henry J. Contreras, CFILC Public Policy Director at henry@cfilc.org if you have any questions or need any additional information.

STATE CONTROLLER JOHN CHIANG’S ANNOUNCEMENT

THAT HE WILL PRIORITIZE CASH PAYMENTS FOR STATE-FUNDED PROGRAMS AND SERVICES AND IMPOSE

A 30-DAY PAYMENT DELAY FOR “NON-MANDATED” PROGRAMS AND SERVICES AFTER FEBRUARY 1^,2009 RAISES CONCERN S WITHIN THE DISABILITY COMMUNITY - BUT, FOR NOW, THE PROPOSAL WILL NOT AFFECT IHSS OR DENY FEBRUARY CHECKS FOR SSI/SSP RECIPIENTS

If you are the recipient of e-mails and publications from various disability community advocacy organizations, you may have received alarming and sometimes conflicting information about the status of negotiations between Governor Arnold Schwarzenegger and the Legislature to come to an agreement to resolve the budget deficits for the current fiscal year and the deliberation on the Governor’s Budget for 2009-2010. More specifically, there has been concern about the diminishing prospects for a budget agreement between the Governor and the Democratic and Republican Caucuses of both houses of the Legislature. Negotiations between the parties have failed to address how the shortfall in anticipated state revenues has exacerbated a severe deficit in the General Fund.

Since the September adjournment of the 2008-2009 Regular Session of the Legislature, the Legislative Analysts Office, the Department of Finance, and independent organizations such as the California Budget Project have issued dire warnings about the declining state economy and the likelihood that the State General Fund will literally run out of cash unless there is an agreement that would balance program cuts and increase state revenues to reduce the deficit.

To date, Republicans have been resolute in continuing their “no tax pledge” and continue to insist that the deficit should be resolved by permanent cuts in programs and services. They have targeted Health and Human Services and Education budgets for severe cuts that threaten to harm California’s K-12 public education and higher education systems. Other Republican proposals would also cut programs and services for seniors, poor and low-income families, and people with disabilities.

Democrats have resisted these proposals and insist upon revenue enhancement and smaller program cuts. The Democratic Leadership packaged their proposals into a series of bills they passed in December by a majority vote they based on a legal opinion prepared by the Legislative Counsel Bureau. Republicans were caught completely unaware and immediately challenged the constitutional legality of the Democratic plan. The Governor finally followed through with his threatened veto of those bills after December-January negotiations failed to meet his demands for an economic stimulus package that relied heavily upon decidedly pro-business waivers of environmental and labor wage and hour regulations.

Rome continued to burn as lawmakers renewed negotiations that have not generated the support necessary to resolve both the current fiscal year deficit and the upcoming Budget Act for the 2009-2010 Fiscal Year. However, in the midst of the continued stalemate, State Controller John Chiang finally made an announcement on February 16, 2009, that the General Fund faces a severe cash shortfall that will impact programs and services effective February 1, 2009.

State Controller Chiang announcement caused a great deal of concern and consternation when he released a letter he sent to the Governor and the Legislature informing them that California state budget will be $346 million in the red at the end of February and $5.2 billion in the red by April. He further projected a $10 billion cash flow shortfall by June in the absence of immediate corrective action.

The State Controller announced that because he is legally obligated to preserve cash for education, debt service, and other cash payments mandated by the California Constitution, Federal law, and court rulings, he would publish a listing of the categories of programs and services that have a legal first claim to available General Fund cash. Thereafter, he indicated that he will begin imposing a 30-day payment delay for non-mandated programs and services, including the withholding of California’s $188 million state share payment to SSI/SSP.

The potential implications of the $188 million non-payment to SSI/SSP was a particular source of concern to disability advocacy organizations and SSI/SSP recipients since it was unclear how the delay would affect the issuance of February checks for SSI/SSP recipients. In response, various advocates coordinated efforts to contact the State Controller’s Office and the California Department of Social Services CDSS) to clarify that issue.

It was determined that SSI/SSP checks are not send to recipients the State Controller’s Office (SCO). Instead, the SCO is required to send the State share of its contributions directly to the Federal Social Security Administration, which then sends the checks that include both the State and Federal share as checks issued to recipients.

The SCO confirmed that February 2009 SSI/SSP checks WILL NOT be affected for two reasons: (1) California is legally required to send a notice to recipients at least 30 days before making any change in the amount of those checks and because that notice was not issued, the February checks cannot be reduced; and (2) The Federal government has agreed for the month of February to treat the delayed payment from California as a loan payable with interest and therefore will pay both the SSI and SSP amounts to recipients for February.

Eva Lopez, Deputy Director for CDSS, verified this information. She also indicated that CDSS is not presently in the process of preparing the required 30-day notice that would have to go out to recipients for the March 2009 checks. Although she could not guarantee that the March checks would not be affected by continued future delays in the payment of the California share to the Social Security Administration, for now it appears that these delayed payments will continued to be treated as a loan because the Federal government has determine that other states are experiencing similar budget deficits and cash flow shortages in their state budgets. It appears that the Federal government is willing to treat all states in the same manner with respect to treating non-payment of State shares as repayable loans in order to allow the full payment of SSI/SSP checks to recipients.

However, it is important to keep in mind that there has been no indication from State Controller Chiang about the status and anticipated treatment of the companion program that provides SSP-level grants to legal immigrants who are blind and low- income seniors who do not qualify for the Federal SSI program. CFILC has long advocated for continued funding for this program that is known as the Cash Assistance Program for Immigrants (CAPI). The February 16^th announcement and subsequent notices posted on the SCO website (www.sco.ca.gov) have not indicated whether or not that program will be subject to the 30-day payment delay. It is estimated that 10,000 legal immigrants rely upon CAPI and that the loss or delay in their payments threatens their ability to pay for food, shelter, and transportation.

It also important to keep in mind that the State Controller has determined that another vital program our consumers rely upon, the In-Home Supportive Services (IHSS), also falls within the category of mandated and protected programs. Once again, for now IHSS workers will continue to receive checks for their salaries and benefits for the month of February.

STATE CONTROLLER CHAING’S PAYMENT DELAYS

WILL IMPACT OTHER PROGRAMS AND SERVICES

AND THE STATE ECONOMY IF THE STATE

BUDGET STALEMATE CONTINUES

While CFILC supports the decision to continue funding for the IHSS and SSI/SSP programs, the proposed 30-day payment delays will have a major negative implications for vendors doing business with the State; other state programs that provide payments to 1.3 million aged, blind, and disabled Californians; and to state agencies that rely upon these payments to administer public services ranging from public safety to health and welfare. Among the programs that could be delayed are CalWORKS, County administration costs for the Medi-Cal program; additional county local assistance administrative funding costs; mental health treatment and rehabilitative services; Department of Development Services Regional Centers; and county alcohol and drug abuse prevention, treatment, and recovery programs.

You may have heard that advocates were also critical about some gaps and misinformation contained in the SOC website. For example, the website lists regional centers funded by the Department of Developmental Services among the categories for which payment delays made be imposed, although the website erroneously refers to them as “regional developmental centers.” This caused confusion because while funding for regional center payments will be delayed, developmental centers funded by Medi-Cal will continue to be paid in February, as will Medi-Cal providers operating nursing homes and health facilities and certain other non-institutional providers such as doctors providing services under Medi-Cal. There is still a degree of uncertainty about other non-institutional providers CFILC hopes will be resolved by the SCO in the near future

It is also possible that the payment delays will also apply to tax refunds for individuals and businesses. Such delays may be extremely difficult for individuals and business owners to absorb in the current waning national and state economies. There are predictions that it may lead to business closures and layoffs for many businesses if they do not receive tax refunds built into their operational budgets. At a minimum, however, the payment delays will cost the State even more money due to the fact that interest must be paid for those deferred tax refunds.

As we reported earlier, the Governor vetoed the December Democratic budget plan, in large part, because he claimed that it lacked an adequate economic stimulus plan he demanded be included in the ensuing budget negotiations. However, in reality his assessment about the impact of an economic stimulus package may be substantially diluted if the budget impasse continues. The State Controller indicated that a continuing cash flow shortage scenario should be characterized as an “anti-economic stimulus package” because it would be difficult to effectuate the planned to jump start the state economy amid all of the other fiscal problems. He also underscored the fact that if the Governor and the Legislature fail to reach an agreement by the end of February, he will be forced to impose another 30-day payment delay and eventually will be forced to issue IOUs in the form of registered warrants.

Although registered warrants have been issued in the wake of previous state budget delays because banks and credit unions had dealt with them in the past as a short-term fix, State Controller Chiang warned that they may not be a viable option today. He noted that in these financially precarious climate that financial institutions may not accept registered warrants. This is particularly true if financial institutions perceive that the registered warrants will not be redeemed by the State for several months.

After our experience with the financially tumultuous 2008, we all appreciate how various segments of the national and state economy are intertwined and can tend to escalate into a negative domino effect in other segments of the state economy. If the predictions that our fragile state economy are true the economy will worsen if payment delays are imposed, registered warrants of dubious merit are issued, and individuals and businesses are denied or receive delayed payments. The status quo threatens our ability to achieve long-term solutions toward an economic recovery.

Advocacy organizations such as the Western Center on Law and Poverty, Disability Rights California, and others that employ staff attorneys are carefully examining available legal options to respond to this post-February 1^st fiscal environment, particularly if the Federal government declines to continue treating the non-payment of State share contributions to SSP as repayable loans and withholds the State share from checks to recipients. There are concerns in this regard that current Federal SSP regulations (20 CFR Section 416.2090) may be interpreted as meaning that the Social Security Administration will not make such payments if it does not have state funding in hand by the 5^th business day of the month before the payments are due.

The preliminary assessment is that the regulations do not clearly state what are the consequences of a state’s failure to make its required share to the program. Similarly, there are unresolved due process concerns if the Social Security Administration does not pay SSP in the absence of a timely notice (at least 10 days) of a reduction action.

As of the date of the publication of this e-mail newsletter, no final legal analyses have been issued or legal decisions made. CFILC will continue to monitor these developments and will discuss the potential outcomes in future editions of Public Policy Perspectives and action alerts if it is deemed appropriate to launch an advocacy campaign.

CFILIC ISSUES ACTION ALERT TO MOBILIZE

OUR STAKEHOLDERS IN LAUNCHING ANOTHER

STATE BUDGET LETTER CAMPAIGN TO THE

GOVERNOR AND MEMBERS OF THE LEGISLATURE

In light of all of these developments regarding the condition of the General Fund cash flow shortage and continued uncertainty regarding the negative impact of payment delays, the issuance of registered warrants, and the continued threat of a deteriorating state economy, CFILC has issued another budget Action Alert on our website. We have included a series of talking points that summarizes the more detailed discussion in this edition of the e-mail newsletter, as well as a sample draft letter our stakeholder can refer to in drafting their own letters.

The issuance of the Action Alert marks the first time that we are utilizing the Public Policy Perspectives e-mail newsletter to explain the reasons for the proposed Action Alert. Clearly, we need to move aggressively in urging the Governor and the Legislature and the Governor to reach an agreement on the underlying issues relating to a state budget agreement.

Continued negotiations between the Governor and the Democratic and Republican Caucuses reconvened on Thursday, January 22^nd. Although the Democratic Leadership suspended negotiations to enable them to travel to Washington D.C. to participate in the Presidential Inauguration of Barack Obama, the Republican Caucus participated in an internal two-day policy conference in Sacramento on the state budget negotiations.

According to the Sacramento Bee, it appears that Republicans are now prepared to retreat to some extent from their rigid “no taxes” pledge that contributed to making the 2008-2009 Fiscal Year Budget Act the most prolonged budget battle in California history and that effectively doomed real prospects for an agreement during the November Special Session. The Republican Leadership apparently recognizes that revenue enhancements will be an essential component of any budget accord, although they continue to insist upon the same concessions from Democrats on permanent spending cuts, the imposition of a “hard spending cap” on future expenditure growth, and other pro-business environmental and labor regulation waivers. They claim they can only accede to revenue enhancements if they are able to inform their constituents that they achieved fundamental state spending and caseload growth changes for future state budgets.

Although our Advocates have faced major obstacles in advocating on behalf of issues affecting the disability community where Republicans represent “red” legislative districts, it appears that they may be more open to concede that the State is in the midst of a massive economic crisis. The Republican Caucus continues to debate the pros and cons of whether the Governor’s proposed temporary increase in the state sales tax is preferable to an increase in vehicle license fees or other proposals they prefer to characterize as “fee-based” revenue increases than as tax increases. In any case, we need to re-double our efforts in those districts to emphasize the need to protect our fragile state economy and to ensure that they receive a strong message that the costs savings that are realized by promoting opportunities for independent living versus more costly institutionalization are essential to the disability community.

These developments also highlight the critical importance of launching an advocacy campaign that clearly identifies the need to reach a budget agreement to avoid the State Controller’s payment delay and issuance of registered warrants proposals. At the same time, we must continue to insist upon protecting vulnerable population groups who are at the greatest risk of serious harm.

Retreating from our core principles is not an option at this particular point in time. Diluted advocacy efforts that give any real or perceived indication that the disability community is willing to accept additional cuts in programs and services undoubtedly would be seized upon by budget negotiators. We must continue to send a clear message that the disability community opposes any agreement that would include any additional permanent cuts in health and human services programs that Republicans are insisting upon cannot be incorporated into any proposal that would meet their pre-condition for further good faith negotiations or the delivery of the votes necessary to reach a budget agreement.

QUESTION OF THE DAY: IS CONGRESS PREPARED

TO INCLUDE INCREASED FUNDING FOR SERVICES TO PEOPLE WITH DISABILITIES IN THE ECONOMIC STIMULUS PLAN TO BE SENT TO PRESIDENT OBAMA?

Although Governor Schwarzenegger joined governors from other states after the November Election in lobbying for bailouts that would provide Federal funding to meet state budget deficits associated with the declining financial and housing markets, most media reports have concluded that many Members of Congress are reluctant to includes states in any proposed Federal economic stimulus package. Many of them view states as having been irresponsible in their fiscal decision-making and are reluctant to have the Federal government set precedent for such actions

However, disability community advocacy organizations are hopeful that President Barack Obama past statements in support of disability issues may encourage a renewed emphasis in supporting additional funding for programs and services for people with disabilities. He has issues an encouraging public statement in that regard and has been quoted as stating: "We must build a world free of unnecessary barriers, stereotypes, and discrimination.... policies must be developed, attitudes must be shaped, and buildings and organizations must be designed to ensure that everyone has a chance to get the education they need and live independently as full citizens in their communities."

Today’s news reports are indicating that President Obama and the Democratic Congressional Leadership are making progress in overcoming that lack of support for a large economic stimulus package that would include aid to states. Both the President and the leadership team have made concerted efforts to be more inclusive in framing those proposals by including Republicans in hearings and behind-the-scenes meetings. President Obama is urging Congress to fast track such legislative proposals and the Republican Leaders announced today a tentative agreement to transmit a major bill to the President by February 16^th.

Of course, the devil is in the details and Republicans would insist upon tax cuts for businesses as a major component of a stimulus package. So far, the President has indicated his receptivity to their ideas and Republicans are viewing his posturing as genuine, particularly give the clear message that voters throughout the nation delivered in electing him and Democratic Members of Congress with the expectation that the bipartisanship he promised throughout his campaign will be put into place.

Disability advocacy organizations operating out of Washington D.C are reporting that there are some promising indications that the President and Congress may be to incorporate increased funding for programs and services for people with disabilities as a major component of the package. The House of Representatives is continuing its work to release its versions on a proposed economic recovery package and that the Senate will soon unveil its own version as S.1. The Obama Administration has been working in close cooperation with congressional leaders on both versions of the bills.

The House bill is to be named the “American Recovery and Reinvestment Act of 2009.” In addition to $275 billion in tax cuts, the introduced versions of that bill would provide $550 billion for a broad cross-section of domestic spending programs to spur the economy, job growth, and assistance to states and local governments coping with rising deficits.

A substantial amount of this new spending will be available to protect and possibly expand disability services. Among the most critical increases to disability programs are:

$87 billion for an increased Federal Medicaid match;
$13 billion for IDEA State Grants;
$600 million for IDEA Early Intervention;
$500 million for the Vocational Rehabilitation State Grant;
One-time $450 (for individuals) and $630 (for couples) payment to all SSI recipients for a total of $4.2 billion;
$900 million to improve the Social Security Administration claims process and computerization upgrades; and
$6.5 billion for several low-income housing initiatives.

For more complete information summarizing the disability-related provisions, please access:

http://www.thearc.org/NetCommunity/document.doc?id=1464.

Given the positive signs of bipartisanship and the tentative agreement to set mid-February as a target, it is incumbent upon the disability community to renew advocacy efforts toward Congress and the Administration. The two bills will be changing rapidly, so we need to emphasize the critical importance of promoting opportunities for people with disabilities.

As we know from our ongoing state budget battles, California’s state and local governments desperately need to receive this influx of Federal funding to stem increasing job losses and growing budget deficits. Like our state, many states are currently in the process of deciding which disability programs should be targeted for reductions and elimination, so we should initiate a letter campaign to all Senators and Representatives to support these bills.

The CFILC Public Policy Committee and Systems Change Network need to make a quick decision about the best advocacy campaign strategies. At a minimum, we need to work with our stakeholders and allied partners to coordinate a letter campaign direct toward Members of the California Congressional Delegation. We will report on those developments and engage all parties in those efforts.

However, keep in mind that apart from the CFILC coordinated campaign, friends and family and every individual can begin to take immediate action to support the national advocacy campaign. There is already a system in place to enable people with disabilities to participate in an ongoing advocacy campaign.

Please feel free to log on to the existing website page located at http://capwiz.com/the arc/issues/alert/?alertid=12450471. The site will assist you in composing an e-mail message by interacting with the website’s format, or you can edit or add your own text in support of S.1 and the House American Recovery and Reinvestment Act of 2009.

NATIONAL COUNCIL FOR INDEPENDENT LIVING (NICL) LOSES VALUED POLICY ANALYST TO THE OBAMA ADMINISTRATION

In a related national development, those of you who have worked with Deb Cotter, NICL Policy may have heard that she has accepted a position with the Rehabilitation Services Administration in Washington D.C. effective at the beginning of February. She had been someone we contacted to assist us in working with NICL on the reauthorization of the Federal Rehabilitation Act and increased funding for ILCs.

While we hope that her position is filled soon. In any case, we extend best wishes to Deb Cotter. She was a valuable resource of information and will be missed. I am sure that we will soon learn about new opportunities to work with her in her new position with RSA. We’ll keep you informed.

HELP CFILC BRING A DISABILILITY PERSPECTIVE TO THE DEBATE! Donate now to support our efforts to:

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