|Budget Issue:||Community Services Program Overbudgeted|
|Program:||Department of Developmental Services|
|Finding or Recommendation:||Recommend the Legislature reduce the Community Services Program budget to adjust for lower-than-budgeted caseload in the current year. We estimate the program is overbudgeted by $30 million to $40 million General Fund for purchase of services, and by $3.9 million General Fund for regional center operations.|
Background. The Community Services Program provides community-based services to clients through 21 nonprofit corporations known as regional centers (RCs) that are located throughout the state. The RCs are responsible for eligibility determinations and client assessment, the development of an individual program plan, and case management. The budget for the Community Services Program is based on projected population of consumers served by RCs, the cost of services, and level of utilization. The RC budget is comprised of two major components: (1) purchase of services, which covers the cost of providing community-based services, and (2) RC operations, which covers the cost of operating the RCs.
RC Caseload Growth Slows. Between 1999-00 and 2009-10, the RC caseload grew from 155,000 to more than 233,000 consumers, an average annual growth rate of about 4 percent. However, our analysis shows that in recent years the RC caseload has grown more slowly. For example, for the period 1999-00 through 2005-06, we found that the RC caseload grew at an average annual rate of about 5 percent; whereas, for the period 2005-06 through 2009-10, caseload has grown at a slower average annual rate of 3 percent. A comparison of 2008-09 to 2009-10 shows caseload growth of less than 1 percent, which represents the slowest year-to-year growth in the past 20 years. For purposes of comparison, we note that, over the last ten years, growth in the RC caseload outpaced growth in the state’s general population, which grew at a rate of 1 percent annually.
Caseload Lower Than Expected. Our review of actual data through January 2010 reveals that caseload is trending significantly below department estimates. The Governor’s budget assumes a current-year RC caseload of 242,495 consumers through January 2010, the same level funded in the 2009-10 Budget Act. As of January, however, the actual RC caseload was 236,421 consumers.
In the past, the department has generally had a good record of performance with respect to estimating RC caseload. Our caseload analysis is based on more recent data not available to the administration when it prepared its caseload estimate in the fall. Department staff have indicated that they are working with the RCs to determine what factors may explain the unusually slow caseload growth.
Recommend Adjustment for Overbudgeting. We recommend the Legislature reduce the RC budget to adjust for lower-than-budgeted caseload in the current year. We estimate the program is overbudgeted by $30 million to $40 million General Fund for purchase of services, and by $3.9 million General Fund for regional center operations. Due to the lack of information on cost and utilization of services, we are unable to provide a more precise figure for purchase of services at this time. Accordingly, the Legislature may wish to direct the department to provide an estimate of the potential 2009-10 budget savings associated with the lower than anticipated caseloads.
We expect that the administration will submit a revised caseload estimate and budget request in May. We will continue to monitor caseload trends and will recommend appropriate adjustments, if necessary, in May when DDS’ updated budget request is presented to the Legislature.