Thursday, January 14, 2010

The Governor's Proposed Draconian Budget Cuts for 2010

Governor Proposes New Cuts to IHSS
Faced with an estimated $19 billion budget deficit for the upcoming fiscal year, Governor Schwarzenegger on January 8th released a new budget proposal that would close the gap by shifting funds, imposing cuts to various programs, and obtaining additional funding from the federal government. Included in the governor's proposal are cuts/changes to many programs that are utilized by the senior and disability communities, including In-Home Supportive Services (IHSS), SSI/SSP, and Medi-Cal. Many of the proposals are similar to proposals the governor made last year that were either rejected by the legislature or overturned by the court system.

Below is a listing of some of the governor's proposed cuts and changes. It is important to remember that, at this time, these are only proposals. Each of the proposals must be passed by both the state senate and assembly and then signed into law before being implemented. Under normal circumstances, the passage of a state budget takes several months and, by law, should be completed by June 15th. However, the governor has declared a fiscal emergency in California requiring the legislature to act on the proposals within 45 days.

In-Home Supportive Services (IHSS)

The elimination of all IHSS services for consumers who have a functional index of less than 4. When being assessed for IHSS, applicants are given a functional index score, which is an average measure of their relative dependence on human assistance for performance of basic program tasks. Scores rank from 1 to 6, with 1 representing the least functional limitation and 6 representing the greatest functional limitation. Under this proposal, any IHSS consumer with a functional index score of 3.99 or less would lose eligibility for the program. This would eliminate services for nearly 87% of IHSS consumers, including consumers who receive paramedical services and/or protective supervision. Consumers who do not know their functional index score can contact their social worker to see if they would be affected by this proposal. The governor has requested an effective date of June 1st for this proposal.

Note: The governor proposed a similar reduction in services as part of last year's budget and the legislature eventually agreed to eliminate services for consumers with a functional index score of less than 2. That reduction in services was blocked by a federal court order in November 2009 and is pending an appeal.

The reduction of state participation in IHSS worker wages to the minimum wage of $8.00/hour. This proposal could impact wages for over 381,000 providers in 46 counties across the state, and in L.A. County would reduce wages from the current level of $9.00/hour to minimum wage, unless the county is able to pay the difference out of local funds. Health benefits for providers would not be affected under this proposal. The governor has requested an effective date of June 1st for this proposal.

Note: The governor proposed a similar reduction as part of last year's budget, and the legislature eventually agreed to reduce wages to $9.50 per hour. That reduction was blocked by a federal court order in June 2009 and is pending an appeal.

A reduction in funding for county administration of the IHSS Program. The governor's budget proposal also assumes an unspecified amount of savings in funding for administration of the IHSS Program. These savings would be relative to the reduction in caseload that results from the elimination of services based on functional index scores.

The elimination of the IHSS Program based on the governor's contingency proposal. See below.


The reduction of SSI/SSP payments for individuals to the minimum level allowed under federal law. This proposal would lower the maximum amount for SSI/SSP payments for nearly 1 million individuals to $830 per month. Payments to couples would not be lowered, because they were dropped to the federal minimum of $1,407 per month during last year's budget process. This would be the 4th reduction in SSI/SSP payments since May 2009.

The Elimination of the Cash Assistance Program for Immigrants (CAPI). CAPI provides assistance similar to SSI/SSP for certain legal immigrants who are seniors or persons with disabilities, but have been denied SSI/SSP benefits because of their immigration status (i.e., those who have been in the U.S. for five years or less). There are currently over 10,800 individuals enrolled in CAPI.


In addition to the cuts proposed for IHSS, the governor has proposed several other key changes to Medi-Cal that could affect the IHSS community, including:
• The elimination of Adult Day Health Care Programs
• The elimination of full scope Medi-Cal for certain immigrants
• The implementation of "cost containment" measures that will eliminate certain Medi-Cal services while imposing new or increased co-pays for others
• An increase in anti-fraud measures within the program
It is uncertain how many individuals would be impacted by these changes.

Contingency Proposals

The governor's budget proposal relies on nearly $6.9 billion in additional federal funding for services such as Medi-Cal, Medicare and special education, and from the extension of the American Recovery and Reinvestment Act. Under the governor's proposal, the Director of the Department of Finance would have to certify that the additional federal monies were received by July 15th, or the following additional service reductions, along with others, would be implemented:
• IHSS - The IHSS Program would be eliminated.
• Medi-Cal - Several Medi-Cal services would be reduced or eliminated, including any remaining Medi-Cal optional benefits.
• CalWORKs - The CalWORKs Program would be eliminated.
• Healthy Families Program - The Healthy Families Program would be eliminated.
• Health Services - Various health services provided under Proposition 99 would be eliminated.
More information on the governor's proposals and the budget process will be posted on PASC's website at, and in future editions of PASC E-News as it becomes available. To subscribe to PASC E-News, click here.

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