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Last Updated: 3/15/2010
Budget Issue: Governor's Proposed Cuts Increase Demand for Regional Center Services
Program: Department of Developmental Services
Finding or Recommendation: Conforms to legislative actions on other related budget issues. Our analysis indicates that the cost of maintaining services for regional center consumers could be greater than $300 million General Fund. Recommend Legislature direct administration to provide detailed implementation plan.
Further Detail

Governor’s Proposed Cuts Increase Demand for Regional Center Services

Background. The Governor’s Budget includes a number of proposals in other program areas that affect persons with disabilities, most notably the proposal to eliminate In Home Supportive Services (IHSS) benefits for certain current recipients. When generic services for DDS consumers such as IHSS are cut back or eliminated, it often shifts costs to the regional centers (RCs). This is because, under the Lanterman Developmental Services Act, individuals with developmental disabilities must generally be provided the services included in their individual program plan via the RCs if they are not available through other programs.

Costs Likely to Far Exceed $50 Million. The Governor’s Budget includes a $50 million increase in the DDS budget to offset reductions in other programs that provide services to RC consumers. At the time of our January analysis, we indicated that we believed the costs could be greater than $50 million. Since that time, we have obtained additional information that confirms our initial finding. In particular, information provided by the Department of Social Services shows that 39,000 RC consumers would probably lose their IHSS benefits and that on average these consumers obtain over 55 million hours of assistance annually.

IHSS Proposal Alone Could Cost $300 Million General Fund. Based on these numbers, we estimate that the potential state General Fund cost to replace these services through RC purchase of services would be in the hundreds of millions of dollars, far exceeding the $50 million currently in the Governor’s budget. The exact cost would depend on the specific services that are used to substitute for the care consumers currently receive through IHSS and the cost of those services. If, for example, the RCs were able to purchase comparable services at a rate comparable to IHSS (about $11 per hour) and receive a 50 percent federal match for all consumers, we estimate it would cost over $300 million General Fund to replace the more than 55 million IHSS hours currently used by RC consumers. If not every hour of IHSS is replaced, or if RCs negotiate rates below $11 per hour, the costs could be lower. However, if regional centers are not able to negotiate rates as low as IHSS, or if not all recipients are eligible for federal funds, total costs to replace the lost IHSS hours will probably be higher. Based on our review, we think costs are likely to be higher than $300 million, particularly since not all RC clients are eligible for federal funds.

Analyst’s Recommendation. As part of our review, we sought to meet with the administration to discuss its plan for implementing the Governor’s proposal. The administration indicated, however, that it did not have a final plan to discuss. We expect that the administration will provide the details of its plan at the time of the May Revise. We recommend that the Legislature direct the administration to provide—as part of its implementation plan—details on (1) the type(s) of service that would be used to substitute for the services currently provided to RC consumers in IHSS, (2) the estimated rate for the service(s), and (3) the estimated number of RC consumers expected to obtain the service.

For our January review of this issue, click here