DSHS Budget Reduction Options Published

Executive Summary Department of Social and Health Services Budget Reduction Options

September 23, 2011

Current Fiscal Climate
The Washington State Economic and Revenue Forecast Council released its most recent revenue forecast on September 15. It projects General Fund-State revenue for the 2011-13 biennium down by more than $1.4 billion. Since September 2008 state revenue forecasts have declined by more than $7.5 billion.

The 2011-13 budget that was signed into law last spring included about $4.6 billion in reductions. In anticipation of the September revenue forecast, Governor Gregoire asked all state agencies to prepare budget reduction options of up to 10 percent for the remainder of the 2011-13 biennium. For the Department of Social and Health Services (DSHS) this equates to more than $573 million General Fund-State, with an additional reduction of close to $300 million in other funds, primarily federal.

How is the Department of Social and Health Services Funded?
The total Department budget for the 2011-13 biennium is just over $11 billion dollars - $5.7 billion General Fund-State, $5.1 billion General Fund-Federal, and approximately $300 million other funds. Many reductions made to General Fund-State result in additional reductions to General Fund-Federal.

The Department’s budget is distributed as follows:
Cumulative Reduction Impacts
Since the beginning of the 2009-11 Biennium (July 1, 2009), the Department has reduced spending by $2.2 billion ($1.6 billion General Fund-State). Administrative expenses have been reduced by close to 30 percent. Service reductions total more than $2 billion. Services have been cut in programs throughout the Department.

Between July 1, 2008 and June 30, 2011, the number of people (headcount) employed at the Department has been reduced by 2,902 (or more than 14 percent). Management positions have been reduced by almost 20 percent. While direct care positions have been reduced by eight percent, non-direct care positions have been reduced by 20 percent. Direct Care staff is defined as those positions exempt from the temporary layoff implemented through SB 6503, Sec. 3(4) in the 2010 legislative session.

Guiding Principles
As the Department deliberated on this next round of budget reduction options, we established the following principles to guide our decisions:
Strengthen and expand existing home and community based service delivery systems.
Continue with strategic program redesign.
In this economy, ask, “What is the role of the State? Should we continue with this program or service?”
Protect the most vulnerable
Maintain public safety.
Optimize efficiencies.
Be consistent with our Strategic Framework for the Future.

What Have We Preserved?
As we have implemented budget reductions since 2008, our guiding principles and strategic framework have enabled us to make decisions that continued to preserve services for the most vulnerable to the extent possible and to propose options which strive to continue to maintain and expand a system of home and community-based care. Programs were preserved, where possible, that encourage permanency for children in out of home situations, encourage independence for clients with functional or developmental disabilities, and provide assistance for families struggling in the current economic climate. Our Developmental Disabilities System of Care was enhanced by expansion of community services and supports to enable the closure and downsizing of Residential Habilitation Centers. Family Caregiver support was expanded in long term care to allow individuals to remain in their own homes for as long as possible. However, budget reductions of this magnitude cannot be accomplished solely through efficiencies and program redesign. Many of the reduction options listed below, if implemented, would eliminate services and impact our state’s most vulnerable citizens.

Budget Reduction Options
Following are decision packages that describe budget reduction options for the Department of Social and Health Services. These options total a 10 percent reduction in General Fund-state for the Department. While many of our proposed reductions are ones we believe are strategic, many others, if chosen, would have dramatic impact on the services and supports so many of our citizens depend on. Within these more drastic reduction options, we have provided alternative suggestions which closely align with our Strategic Framework for the Future, or at the very least are less painful to our most vulnerable clients. We did propose the most painful of options only in order to reduce the Department’s budget by the 10 percent target.
We have listed below several of our reduction options. This is not an exhaustive list. A complete list of reduction options will be posted at http://www.dshs.wa.gov/Budget/ .

Our budget reduction options can be seen in one of three ways:
Options that are strategic and aligned with our new Economic Realities.
(These reductions and program eliminations, if taken together, would reduce the Department’s budget by approximately three percent, or approximately $170 million gf-s. Many of these options are not feasible if options in the last category are taken. )
Program
Brief Description
CA
Continued payment integrity efforts, maximization of federal funding, and continuation of savings and efficiency measures implemented in previous budget cycles.
CA
Adjustments to Foster Care Funding which eliminates expenditures for programs no longer core to system performance, and prioritizes expenditures for areas that are consistent with the administration’s goals. Programs eliminated include Receiving Care Support Services and elimination of the Pediatric Interim Care Facility.
JRA
Phased closure of Naselle Youth Camp, consistent with the Department’s commitment to place youth close to families and community supports. (260 youths)
ADSA
Within the Major Eligibility and Program Reduction Package are alternative options which remain strategic and aligned with our new economic realities. These include:
Refinancing personal care under the Community-First Choice Option
Implementation of a public utility assessment on community residential providers and home care agencies
Additional investments in the home and community system of care for people with developmental disabilities resulting in continued consolidation of state-run Residential Habilitation Centers
Additional investments in the LTC Family Caregiver Support program
MH
Community redesign by reducing the number of existing Regional Support Networks to promote greater accountability and oversight, improved consistency in rate setting, and greater capacity to leverage limited resources.
MH/LTC
Closure of two decertified wards at Western State Hospital and increasing services in community Long Term Care settings for individuals with dementia or Traumatic Brain Injury. (82 clients).
MH
Delay in implementation of changes to the Involuntary Treatment Act from January 1, 2012 to July 1, 2015
DD/LTC
Increase Adult Family Home fees to cover 100 percent of the cost of critical oversight.

Options that are difficult but doable
(These reductions and program eliminations would reduce the Department’s budget by approximately 2.5 percent, or approximately $145 million gf-s)
Program
Brief Description
CA
Reduction and elimination of programs in support of children in out of home placements, which is achievable through successful efforts to reduce the number of children and length of stay for children in out of home placements. Programs eliminated included Foster Care Assessment Program, Comprehensive Assessment Program, Continuum of Care Program, Child Advocacy Centers, and research and training services.
JRA
Reduction to the JRA Residential Caseload, Institution Costs, and Juvenile Court Funding. (21 youths)
MH
Reduction to Medicaid capitation rates for RSNs, and elimination of funding for respite, clubhouses, and supported employment.
MH
Additional downsizing of the state hospitals by closure of four civil wards could be accomplished with investment in community capacity and supports.
DDD
Suspension of Individual and Family Services. (1,000 families)
LTC
Eliminate Adult Day Health Services. (1,000 clients)
ESA
Elimination of Refugee/Limited English Proficiency (LEP) Assistance for a number of clients, while preserving employment services for clients receiving LEP Pathway services. (4,900 clients received services in FY2011)
ESA
Elimination of Naturalization Services. (3,874 clients received services in FY2011)
ESA
Reducing the number of months families are eligible to receive TANF cash grants, eliminating the State Family Assistance monthly cash grant, and implementing a two percent ratable reduction to the monthly TANF cash grant. (58,580 families)
ESA
Elimination of the Aged, Blind, or Disabled and Pregnant Women Assistance Program monthly cash grants. (15,500 clients)
ESA
Elimination of the State Food Assistance program. (13,000 clients)
ASA
While the decision package to achieve a 10 percent reduction requires elimination of all alcohol and substance abuse services for adults, alternatives to consider include elimination of residential services, limiting detoxification services, and reductions in Parent Child Assistance Program.
DVR
Reduction of general fund-state dollars for the Basic Support Grant, which will eliminate these services for a number of clients. (14,000 clients served in FY2011)
Admin
Elimination of TeamChild and Washington Mentoring Program.



Options that are necessary to build to a 10 percent reduction, but in many cases will conflict with our guiding principles and our strategic framework for the future and create lasting consequences and long-term negative budget impacts.
(These reductions and program eliminations, if taken in total, would reduce the Department’s budget by approximately six percent, or approximately $340 million gf-s. However, if these reduction options are chosen, we will not be able to implement some of the options listed in the previous two sections.)
Program
Brief Description
ADSA
Major Eligibility and Program Changes – A reduction of this magnitude will have significant impact on our ability to maintain a balanced system of home and community based care. This decision package has alternative options, which are strategic and promote a more balanced system of care, listed in the options above. (more than 80,000 clients)
CA
Additional reductions to Behavioral Rehabilitation Services and Domestic Violence Services to children (more than 4,500 children)
ASA
Elimination of all alcohol and substance abuse services for adults, while retaining services for youth and pregnant and parenting woman. Alternatives to this option are described above. (more than 55,000 clients)
Admin
Elimination of Juvenile Detention Alternatives Initiative.

Next Steps
Secretary Dreyfus will meet with stakeholders and partners in the very near future to educate them about the cumulative reductions we have taken in recent years, to candidly discuss the impacts of the options presented here, and to invite them to join in the conversation and engage in the process.