SACRAMENTO (CDCAN) - The Budget Conference Committee, chaired by Sen. Denise Ducheny (Democrat – San Diego) after meeting Thursday for an overview on local government funding issues will reconvene on Friday (June 18), at 11:00 AM at the State Capitol in Room 4203.

The Budget Conference Committee will begin going through – though not necessarily will taken final action yet – on previously heard items covering different budget areas that were kept “open” for later action and discussion on General Government, Human Services, Public Safety, Resources, and Transportation. It is not certain when the Budget Conference Committee will cover “open items” under the Health budget agenda that includes Medi-Cal, regional centers, mental health, though possibly early next week.

Meanwhile the federal legislation (HR 4213) that would, among other things, extend to June 30, 2011 the temporary increase in federal matching Medicaid funds remains stalled in the US Senate after a vote to end debate failed Thursday evening (see below for details).

All Budget Conference Committee Hearings Televised

All hearings are televised on CalChannel (check local cable listings) and webcast live on the CalChannel website at www.calchannel.com All budget conference committee hearings are open to the public - though public testimony is not taken at these hearings (public testimony was taken during the budget subcommittee process – though people can submit written comments and letters to the Budget Conference Committee and to their own legislators who represent them).

Budget Conference Committee Will Likely Meet Through End of Month

The budget conference committee phase of the budget process is longer than normal – and the committee will likely end up meeting through the rest of this month to finish up its work. After the budget conference committee finishes its work, the budget plan, currently contained in AB 190, will go the floors of both the Assembly and State Senate.

No action by the budget conference committee – or previous actions by the budget subcommittees – are final until a State budget is passed by the Legislature and signed by the Governor. With major differences on how to close the $20 billion budget gap, no one expects agreement on a budget deal anytime soon.

HUMAN SERVICES BUDGET ITEMS “OPEN”

The human services budget items that are open that the Budget Conference Committee will be going through on Friday (June 18th) total 7 items as follows:

1. Senior Community-Based Programs (Department of Aging - Budget Item 4170-101-0001, Issue 301)

Background: Governor eliminated, using his line item veto last year , October 1, 2009, $6.1 million State state general (growing to $9.6 million in State general funds on a yearly basis) for several senior community based programs under the Department of Aging: Linkages case management, Alzheimer’s Day Care Resource Center, Brown Bag, Respite and Senior Companion.
The Governor proposed to continue the elimination of state general funding for those programs into the 2010-2011 State Budget year.
Current Status of this Budget Item: OPEN
Why ThisBudget Item Is In Conference Committee:
* The Assembly restored the funding vetoed by the Governor for the 2010-2011 State Budget year.
* The State Senate did not restore this funding.

2. CalWORKS Program – (Department of Social Services - Budget Item 5180-101-0001, Issue 206)

Background: Governor proposed to eliminate CalWORKs, effective October 1, 2010, for a reduction (or savings) to the State general fund of $1.2 billion for that part of the 2010-2011 State budget year, with the annual reduction (or savings) for a full year of $1.6 billion, with corresponding loss of $3.7 billion in the federal TANF block grant [plus additional federal funds during the period of the ARRA (American Recovery and Reinvestment Act) Emergency Contingency Fund].
Current Status of this Budget Item: OPEN
Why This Budget Item Is In Conference Committee:
* Assembly rejected the elimination proposal and instead, from the “Jobs and Economic Security Fund” proposed last month by Assembly Speaker Perez, (1) appropriated $1.5 billion to fund CalWORKs employment services and child care, backing out federal TANF to use for CalWORKs grants, that will free up State general funds and (2) provided an additional $300 million to partially restore a budgeted $375 million reduction for employment services and child care in the 2010-2011 State budget year.
* Senate rejected the elimination proposal but did take up the other actions by the Assembly.

3. In-Home Supportive Services Reduction – Stakeholder Workgroup (Department of Social Services - Budget Item 5180-111-001, Issue 220)

Background: Governor proposed an unspecified reduction of $637.1 million in State general funds (with corresponding loss of about $1.1 billion federal funds), based on proposals to be developed in consultation with stakeholders and enacted July 1, 2010.
Current Status of this Budget Item: OPEN
Why This Budget Item Is In Conference Committee:
* Assembly rejected proposed reduction and instead adopted budget “trailer bill language to: 1) establish a Budget Advisory Workgroup to be convened by the Department of Social Services, and 2) institute a proposed IHSS “provider fee” to generate $150 million in State general fund savings in 2010-2011 State budget year [the “provider fee” would be similar to the quality assurance fees that some nursing homes and intermediate care facilities for the developmentally disabled pay that is matched by federal funds and in turn is returned to them.]. The Budget Advisory Workgroup would further develop the provider fee proposal.
* The State Senate rejected proposed reduction and instead adopted “budget bill language” to establish a savings (reduction) target of at least 10% of total State general funds for the IHSS Program (approximately $1.4 billion), with proposals to be developed by Administration in consultation with a budget advisory workgroup composed of stakeholders.

4. In-Home Supportive Services Fraud Prevention Cost Benefit Model (Department of Social Services - Budget Item 5180-111-001)

Current Status of this Budget Item: OPEN
Why This Budget Item Is In Conference Committee:
* The Assembly adopted “budget trailer bill language” to require the Administration to construct a cost-benefit model for analyzing IHSS fraud-prevention program changes and to report on considerations, costs, and deterrence-related assumptions.
The cost-benefit model would be required for: 1) implementation of anti-fraud activities in IHSS, and 2) any future proposals in IHSS or other social service programs. Program changes enacted in the 2009-2010 State budget year that have yet to be implemented (including unannounced home visits and targeted mailing policies), would be subject to this requirement.
* Senate did not adopt this “budget trailer bill language”.
Note “budget trailer bill language” refers to proposed legislative language that would be included in a bill that is part of the budget agreement that follows or trails the passage of the main budget bill. “Budget Bill Language” refers to specific provisions included in the main budget bill – that is good only for that budget year.

5. Supplemental Security Income/State Supplemental Payment (SSI/SSP) Benefits – (Department of Social Services - Budget Item 5180-111-001, Issue 203)

Background: The Legislative Analyst Office (LAO) recommended consideration of reversing “cash-out” policy under which persons receiving SSI/SSP grants are currently ineligible for food stamps (and as a result their incomes are not counted against the income of the rest of their household for food stamps eligibility).
Current Status of this Budget Item: OPEN
Why This Budget Item Is In Conference Committee:
* Assembly adopted Supplemental Report Language directing the Department of Social Services to convene a workgroup to evaluate estimated effects of eliminating the “cash-out” policy. The direction only takes effect if the state receives a positive response from the federal government regarding its request to consider changing the policy for only SSI/SSP recipients whose households would benefit.
* The State Senate adopted “Budget Bill Language” requiring the Department of Socail Services to report to the Legislature regarding the federal government’s response to the same request.

6. Foster Care – Training on Eligibility for Federal Financial Participation (Department of Social Services - Budget Item 5180-141-001, Issue 508)

Current Status of this Budget Item: OPEN

7. Food Stamps Administration – Department of Defense Funding (Department of Social Services – Budget Item 5180-141-001)
Current Status of this Budget Item: OPEN

CDCAN Federal Update
BILL TO EXTEND TEMPORARY MEDICAID FUNDING INCREASE TO STATES STALLS IN ANOTHER VOTE THURSDAY EVENING
Meanwhile, in Washington DC, critical legislation (HR 4213) that would, among other thins extend unemployment benefits and extend until June 30, 2011 temporary increase in federal Medicaid funding to the states remains stalled in the US Senate, with another effort by US Senate Democrats failing Thursday evening (June 17) to end debate.

The extension of the increase in federal Medicaid matching funds (through June 30, 2011) to the states that totals $24 billion remains in the bill at this point – but other provisions dealing with delaying the 20% reduction to Medicare doctors were changed. California’s share of the Medicaid funding is about $2 billion during the last six months of the State’s 2010-2011 State budget year.

The temporary increase in federal Medicaid matching funds was originally part of the American Recovery and Reinvestment Act (ARRA) that is currently set to expire December 31, 2010 unless Congress approves an extension. [CDCAN Note: The full text of the 399 page bill with proposed amendments can be viewed and downloaded from the CDCAN website at www.cdcan.us along with the 4 page summary of the amendments ]

US Senate Majority Leader Harry Reid (Democrat – Nevada) said after the unsuccessful vote to end debate on the bill that “we’re not going to give up”. However it is not clear how US Senate Democrats will win enough votes – not only from at least one US Senate Republican, but also several moderate Democrats, who are not yet willing to support the bill. It is not certain what US Senate Democrats will do next – and it is possible that another vote on the bill will not occur until after the 4th of July recess.

It is not certain if Reid and US Sen. Max Baucus (Democrat- Montana), the chair of the US Senate Finance Committee will reduce the bill’s price tag even further by eliminating certain parts of the bill or further reducing spending in the bill in order to win enough votes.
Baucus released Wednesday evening amendments to HR 4213 that included extending through June 30, 2011, the temporary increase in federal Medicaid funding to the states, but made other changes to the bill that will drop the overall cost of the legislation from $140 billion to $118 billion in order to win crucial votes of wavering US Senate Democrats and at least 1 US Senate Republican.

Reid, after the Thursday vote, angrily said in a statement that US Senate Republicans “…might think tonight’s vote wins them points with their special interest friends. They might think tonight’s vote is a political win. But tonight’s vote does nothing but help destroy our country’s economic recovery and put hard working Nevadans and Americans in a deeper hole.”

US Senate Republicans and some Democrats however argue that they might favor extending certain benefits and funding increases and other provisions in the bill if the cost of the bill can be offset with spending cuts elsewhere in the federal budget or “pay as you go”. The US Senate Democratic leadership contends the bill – especially with the reduced price tag offered by US Sen. Baucus on Wednesday evening – is largely paid for.
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Issue Has Major Enormous Impact in California

The issue has enormous impact to children and adults with disabilities – including those with autism and other developmental disabilities, mental health needs, seniors, the blind and their families, community organizations and facilities and workers who provide supports and services because if the additional $2 billion in increased federal Medicaid funding that California would receive between January 1, 2011 and June 30, 2011 is not approved, the already enormous $20 billion state budget hole would increase by that amount.

Latest Actions on HR 4213 This Week

· Thursday evening in Washington DC, (June 17), US Senate Democrats failed again in their effort to end debate on the bill – with the amendments by US Sen. Baucus that trimmed the price tag of the bill from from $140 billion to $118 billion. The vote was 56 to 40, with 1 Democrat – US Sen. Ben Nelson (Democrat – Nebraska) and US Sen. Joe Lierberman (Independent – Connecticut) voting with all Republicans present. To end debate in the US Senate, 60 votes are needed. US Senate Democrats hold 59 seats in the 100 member US Senate.
· Earlier on Thursday (June 17) US Senate Democrats rejected on a 57 to 41 vote, the US Senate Republican’s counter proposal by US Sen. John Thune (Republican – South Dakota) that would have eliminated extension of the federal Medicaid funding increase, reduced the overall cost of the bill and would have used left over economic stimulus funding and other sources to fully pay for the legislation. Only one US Senate Democrat – Sen. Ben Nelson (Democrat – Nebraska) joined the 40 US Senate Republicans in supporting the Republican proposal.
· On Wednesday (June 16) US Senate Democrats, failed to get the necessary 60 votes to end debate on the bill, with 12 US Democratic Senators unwilling to support the original $140 billion “extenders bill” (called that because the bill would temporarily extend unemployment and other benefits, temporary funding increases such as Medicaid or certain special taxes)

Bill Faces Uncertain Future Even If It Passes Out of US Senate

· Even if the bill passes out of the US Senate it faces a difficult and uncertain future, because it would have to go to a conference committee (composed of members of both houses) to work out differences with the House passed version of the bill.
· The US House of Representatives took out the Medicaid funding increase to the states in the version of HR 4213 that it passed last week. If agreement is reached in conference committee, the bill would have to be re-voted on again in both the US Senate and the House of Representatives /
 

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