The Department of Health Services administers a broad range of public health programs. Some of these programs complement and support the activities of local health agencies in controlling environmental hazards, preventing and controlling disease, and providing health services to populations who have special needs. Other programs are solely state-operated programs such as those which license health facilities.
The Governor's budget proposes $1.8 billion (all funds) for public health local assistance. This represents an increase of $72 million, or 3.9 percent, over estimated current-year expenditures. The budget proposes $332 million from the General Fund, which is less than 1 percent above estimated current-year expenditures.
We recommend (1) deletion of three of the proposed eight new positions in the department because they are not justified by workload increases, and (2) redirection of the $286,000 in savings to the Proposition 99 media campaign.
Proposition 99, the Tobacco Tax and Health Protection Act of 1988, established a surtax on cigarettes and tobacco products. The proposition provides that the revenues from the surtax are to be distributed to six accounts within the Cigarette and Tobacco Products Surtax Fund (C&T Fund), according to specified percentages, and further provides that expenditures from each account must be for specific kinds of activities.
Budget Proposal. The Governor's budget proposes expenditures of $469.6 million from the C&T Fund in 1998-99, which is a reduction of $131.4 million, or 22 percent, from estimated expenditures in the current year. This decrease can be attributed primarily to a significant increase in current-year spending in the Health Education and Research accounts, generally due to the accumulation of relatively large balances in these accounts.
Major changes proposed for 1998-99 include:
The budget plan also reflects reserves in excess of the standard 2 percent in two accounts--Health Education ($32.5 million) and Research ($7 million), pending clarification of a recent California Supreme Court decision regarding the distribution of funds from these accounts.
New Positions Requested. The budget also proposes to establish eight new positions in the DHS, at a cost of $636,000 from the C&T Fund. This would be funded by a redirection of funds from the media campaign and the evaluation component.
The department indicates that these positions are needed to accomplish the following:
Recommendation. The department's Tobacco Control Section currently has 33 positions, so the budget proposal represents a significant increase in departmental staff. Nevertheless, it is difficult to assess the potential benefits of activities such as increased technical assistance to local agencies and the proposed new initiatives against the benefits of maintaining the funding levels for the media campaign and evaluation activities. With respect to three of the proposed positions, however, we believe the department has provided insufficient justification: one Public Health Medical Officer III, who would be the Section Chief; one Office Technician to provide clerical support for the Section Chief; and one Staff Counsel III to deal with tobacco litigation.
The department indicates that it is requesting a new position to assume the duties of the Section Chief because currently there is no chief of the section. Consequently, managers of the two major units in the section report directly to the Cancer Control Branch Chief.
We note that the absence of a Section Chief is by choice of the department. The department currently has four Health Manager positions in the Tobacco Control Section, more than enough to manage the two major units in the section and have a Section Chief. Thus, we suggest that the department reorganize the section if it places a priority on establishing a Section Chief position rather than retain the current configuration.
The department indicates that the new legal counsel position is needed to deal with the increasing number of legal issues dealing with tobacco control. As one reason, the department cites the state's lawsuit against tobacco companies. We note, however, that the budget includes a separate proposal for 21 positions in DHS (including five staff counsels) and 121.4 positions (34 attorneys) in the Department of Justice specifically for activities related to this lawsuit.
The department also cites a pending lawsuit that could generate workload in the budget year. We note, however, that the state has been involved in several major lawsuits related to Proposition 99 during the past several years and we see no indication that workload related to such litigation will increase in the budget year. Thus, we believe that the department's Office of Legal Affairs--currently staffed with 59 attorneys--will be able to handle the workload without the new position.
In summary, we recommend deletion of these three positions,
and redirection of the $286,000 in savings to the
Proposition 99 media campaign which has generally been
regarded as one of the more successful components of the program.
We recommend redirecting the proposed $2.6 million General Fund augmentation to establish an early childhood family education (parenting) program into the department's existing Adolescent Family Life Program because the latter program has a similar function, is targeted to a high-risk group, has been shown to be effective, and is not fully funded to meet its need.
The budget proposes $2,606,000 from the General Fund for local assistance and $544,000 ($294,000 General Fund) for six new positions in the Department of Health Services (DHS) to establish an early childhood family education program. The new program would award grants, ranging from $50,000 to $100,000 each, to local organizations to support from 27 to 54 projects designed to educate parents of children up to age three "regarding appropriate parent-child interactions to ensure optimal social, mental, and emotional development." The department lists the following examples of the type of activities that could be funded:
The department also indicates that an unspecified amount of the funds allocated to local assistance would be used to contract for a toll-free telephone line that would respond to questions concerning child development.
Related Programs. We note that several existing programs provide information and support services related to parenting of young children. These programs, many of which are targeted to particular populations, include the Preschool, Head Start, Healthy Start, and School-Age Parent and Infant Development programs in the State Department of Education, the Early Start program in the Department of Developmental Services, the Early Mental Health Initiative and the Children's System of Care program in the Department of Mental Health, the Cal Learn program in the Department of Social Services, and the Child Health and Disability Prevention program, the California Children Services program, the Women, Infants, and Children program, and the Adolescent Family Life Program in the Department of Health Services.
Generally, these programs are targeted to specific populations, often in high-risk categories. Thus, it could be argued that there is a need for a program that could serve persons not eligible to participate in any of the existing ones. We note, however, that the proposal is not structured so as to avoid potential duplication of effort. We further note that parents have a variety of sources of information (family physicians, for example) on issues related to parenting.
Redirect Funds to Expand Existing Programs. We have no analytical basis for determining the cost-effectiveness of the proposal. We do not believe, however, that the administration has justified the establishment of a new program that, potentially, would duplicate the efforts of at least some of the existing programs. Instead, we think that it would make more sense to expand programs that have already been shown to be effective. There are several existing state programs that fall into this category--for example, the Adolescent Family Life Program (AFLP) and the Women, Infants, and Children program in DHS and the Children's System of Care program in the Department of Mental Health. Because the AFLP comes closer to the budget proposal with respect to its focus (parenting) and the general age group of the children, we recommend redirecting the proposed augmentation to this program.
The AFLP provides case management for pregnant and parenting teens, and is therefore targeted to a high-risk population. According to the department, it is not funded to fully meet its need. The department estimates that it would need over $25 million to serve all eligible persons who are not otherwise served by the Cal Learn program (a similar program in the Department of Social Services) and who would elect to participate in the program. Evaluations have indicated that the program is effective.
Rather than establish a new program, with additional funds for
administration and with no basis for predicting effectiveness, we
recommend redirecting the proposed $2.9 million in General
Fund monies to expand the AFLP. Redirecting the funds proposed
for the new program into this existing program would increase the
likelihood that these funds will be used in a cost-effective
We recommend deleting the nine new positions proposed for the Childhood Lead Poisoning Prevention Program because the budget also proposes to eliminate the program's salary savings requirement, which would permit the department to fill nine positions that the department has been holding vacant. We further recommend eliminating two existing positions because their duties would be assumed by a new contract proposed in the budget. These recommendations would result in a savings of $786,000 to the Childhood Lead Poisoning Prevention Fund in 1998-99. (Reduce Item 4260-001-0080 by $786,000.)
The budget proposes an increase of $3.2 million in the current year (federal funds) and $11.1 million in the budget year ($6.5 million from the Childhood Lead Poisoning Prevention (CLPP) Fund and $4.6 million federal funds) for the Childhood Lead Poisoning Prevention Program. The CLPP Fund is supported by industry fees (primarily manufacturers of certain products containing lead).
New Positions. The amount proposed for the budget year includes funding for nine new positions. The department indicates that the intent is to restore nine of the 14 positions that were eliminated in 1996-97 when support for the program was temporarily shifted to the General Fund, pending the outcome of a court case related to the use of the fees in the CLPP Fund. The budget is requesting the new positions on the basis that they are needed to "rebuild the core program at the state and local levels." More specifically, the positions would conduct various activities such as program monitoring, fiscal oversight, policy development, and technical support of local programs.
As part of the supporting materials accompanying the budget proposal, the department documented the workload increase that would justify nine positions. We note, however, that the proposal also includes an augmentation of $364,000 to eliminate the program's salary savings requirement. This will have the effect of permitting the department to fill nine positions that the department has been holding vacant. These positions are generally equivalent to the new positions requested in the budget, and any differences can be reconciled through position reclassifications at no additional cost. Consequently, we recommend approval of the salary savings relief proposal and rejection of the nine new positions, for a savings of $616,000 to the CLPP Fund.
Contract Services. The budget also proposes approximately $200,000 to contract for laboratory services. According to the department, these services currently comprise a major part of the workload of three positions in the program. The department intends to redirect these existing positions entirely to the "core" program, but has not justified the need to do so. Accordingly, we recommend deletion of two of the three positions (roughly equivalent to the redirection of staff resources) whose duties would be assumed under the contract, for a savings of $170,000 to the CLPP Fund.
Summary. In total, we recommend deletion of 11 positions, for a savings of $786,000 to the CLPP Fund. In conjunction with other components of the budget proposal, our recommendation would provide sufficient resources to address the additional workload documented by the department.
The budget proposes $7.2 million in federal funds to implement the federal abstinence education program. We comment on the proposal and related research.
Budget Proposal. The budget proposes to spend $7.2 million in federal Title V Abstinence Education Project Grant funds in order to implement an abstinence education program in 1998-99. This would be a competitive grant program, administered by six new positions in the Department of Health Services (DHS). The required matching funds (75 percent of the federal grant) would be provided by grantees. The proposal would include an independent evaluation, although no specific amount is set aside for this activity.
Pursuant to the authorizing federal statute, abstinence education is defined as an educational or motivational program which:
According to the department, projects may incorporate any or all of these elements, as long as they are "abstinence-only" programs and do not incorporate any elements not listed in the federal definition.
Similar Proposal Rejected Last Year. Last year, the administration advanced a similar proposal through an amendment letter to the 1997-98 budget, requesting $4.3 million in federal funds. This proposal was rejected by the Legislature. In order to meet the July 15, 1997 federal application deadline, however, the DHS applied for the initial grant in July and the state was awarded $5.8 million in November 1997. These funds are included in the $7.2 million proposed for expenditure in 1998-99.
State Funded Teen Pregnancy Prevention Programs in California. One version of an abstinence education program--the Education Now and Babies Later (ENABL) program--was implemented in California in 1992. The program's focus was on adolescents ages 12 to 14, and emphasized the postponement of sexual activity by helping adolescents resist pressures to become sexually active. The curriculum in the classroom component of the program was based on a program developed in Georgia, which was evaluated as being effective. The evaluation of the ENABL program, however, found that the classroom component did not have any effect; and the administration terminated the program in February 1996.
In the 1996-97 Budget Act, in response to a proposal by the Governor, the Legislature appropriated $20 million to establish the Challenge Grants program to fund local teen pregnancy prevention projects, which could include abstinence components or strategies. The current-year budget also appropriated $20 million for the program, and the budget proposes $20 million for 1998-99. The department indicates that of 328 grants awarded as of January 1998, 89 included abstinence as a strategy and two included abstinence-only strategies.
Finally, we note that Chapter 311, Statutes of 1995 (SB 1170, Lockyer) established a teenage pregnancy prevention grant program in the State Department of Education. The budget proposes $10 million to continue the program in 1998-99.
Research on Teen Pregnancy Prevention Programs. To provide a brief summary of the research, we relied on a review of the literature submitted by Philliber Research Associates to the Centers for Disease Control in December 1995. Thus, we caution that it does not encompass any evaluations reported during the past two years. The authors made the following points with respect to the research on teen pregnancy prevention programs generally and, more specifically, abstinence education:
Conclusion. The administration indicates that its proposal has generated considerable interest at the local level. Furthermore, it would be implemented at no cost to the General Fund. On the other hand, the research, while limited, suggests that an abstinence-only approach is not likely to be effective. In this respect, we note that both of the existing state programs for teen pregnancy prevention grants (described above) may include abstinence education but are not restricted to an abstinence-only approach as would be required by the program under which the federal funds are offered.
Should the Legislature decide to adopt the budget proposal, we
suggest that sufficient funding be set aside to ensure that the
program has a strong evaluation component.
We recommend deleting the 13 new positions proposed for the Emerging Infectious Diseases program and instead reducing the department's salary savings requirement by $573,000 so the department can fill 12 vacant positions, for a net General Fund savings of $178,000. These 12 positions would be available for the Emerging Infectious Diseases program. (Reduce Item 4260-001-0001 by $178,000.)
We further recommend enactment of legislation to establish an industry fee to support the proposed Food Safety program, for a General Fund savings of $828,000. (Reduce Item 4260-001-0001 by $828,000 and increase Item 4260-001-0177 by $828,000.)
The budget proposes $3,109,000 from the General Fund to expand the department's activities to address (1) emerging infectious diseases and (2) food safety. The proposal would add 20 new positions, and an additional 10.5 positions through contract funds.
According to the department, the augmentation is designed to (1) control outbreaks and prevent the spread of emerging infectious diseases; (2) expand infectious disease surveillance activities to include emerging infections; (3) improve laboratory diagnostic methods for these emerging disease threats; (4) educate health care providers, policy makers, industries, and at-risk communities about emerging infectious disease prevention and control; and (5) prioritize food safety and food borne illness prevention by addressing raw and minimally processed food production practices and retail food safety.
The department has several "core" infectious disease and food safety programs, under the administration of the Communicable Disease Control (CDC) Division and the Food and Drug Division. These divisions consist of several branches and laboratories, including the following that would be augmented under the proposal: the Disease Investigations and Surveillance Branch (20 positions currently), the Microbial Diseases Laboratory (56 positions), the Viral and Rickettsial Diseases Laboratory (50 positions), and the Food and Drug Branch (131 positions).
Emerging Infectious Diseases Program. Because of the size of the CDC Division, the department has some flexibility to respond to emerging infectious diseases by redirecting resources. In fact, the department acknowledges that, to some extent, it has been able to do this but has neglected its ongoing tasks with respect to existing or traditional infectious diseases. The department points out that between 1987-88 and 1996-97, the number of authorized positions in its diagnostic laboratory, infectious disease epidemiology, surveillance, and investigation programs decreased by 12 percent, while the number of reportable infectious diseases increased by over 60 percent; and the number of reported cases of communicable diseases--excluding sexually transmitted diseases, tuberculosis, and vaccine-preventable infections--increased by more than 25 percent.
While it is difficult to determine the exact number of new positions that are needed, we believe that some increase is warranted. We note, however, that the department currently has 38 vacant positions ($1.5 million) in its CDC Division, most of which are being held vacant to meet the department's relatively high salary savings requirement of about 13 percent (see our analysis of Department of Health Services State Operations). Consequently, rather than add 13 new positions to the division, we recommend reducing the department's salary savings requirement by an amount sufficient to fill 12 vacant positions in the CDC Division, which correspond generally to 12 of the 13 positions requested. (If necessary, the department can request position reclassifications to align the positions more closely with the duties assigned.) This would result in a net General Fund savings of $110,000 in salaries--a savings of $683,000 for the proposed 13 new positions offset by a cost of $573,000 to reduce the salary savings requirement.
We are excluding one of the two proposed Public Health Medical Officer (PMHO) III positions because we believe the tasks described by the department can be accommodated by one PMHO III (which is included in the 12 vacant positions). We also note that the excluded position would not have managerial responsibilities and would be assigned to an existing four-person unit that already includes two of these high-level positions.
After adjusting for differences in personnel benefits and operating expenses, our recommendation would result in a net General Fund savings of $178,000.
Food Safety and Food-Borne Illness Prevention Program. Included in the proposal is $828,000 from the General Fund (seven positions) for a food safety and food-borne illness prevention program. This program is designed to improve surveillance and investigation of food-borne illness, raw and minimally processed food production practices, and retail food safety. Activities of the new staff would include analysis of food contamination, research on food-borne pathogens, inspections of raw and minimally processed food producers, and food safety training for the food service industry.
The department currently operates food safety and inspection programs, and has a separate budget proposal to establish a food safety education and training program, for the processed food industry. These activities are funded by fees assessed on processed food manufacturers and wholesalers (with an exemption for small businesses), and deposited in the Food Safety Fund.
This raises the issue of whether the new food safety and food-borne illness program should be funded from the General Fund, as proposed, or from fees deposited in a special fund, as is the case with the aforementioned programs. The new program, if successful, would benefit the public in general; but--as the department indicates--it would also benefit the raw and minimally processed food industry and the retail food service industry by providing training for their employees, and preventing food contamination problems that can be costly to individual manufacturers and retailers as well as the industries in general. Given that the Legislature has deemed it appropriate to fund related activities through a fee assessed on the processed food industry, we believe that it would be consistent to follow the same practice with respect to the raw and minimally processed food industry and the retail food service industry.
Accordingly, we recommend legislation to authorize such a fee, and further recommend transferring the $828,000 proposed for support of the new program from the General Fund to the Food Safety Fund.
We withhold recommendation on $6.2 million ($3.5 million General Fund) proposed to establish a newborn hearing screening program, pending submission of additional justification for the cost estimate by the department.
Background and Budget Proposal. Currently, the California Children's Services (CCS) program provides for infant hearing screens for children in CCS-approved Neonatal Intensive Care Units if the child is at high risk of becoming deaf. The department indicates, however, that these hospital units do not routinely conduct hearing screens, even for "high risk" children.
The budget proposes $6.2 million ($3.5 million General Fund) to establish a newborn hearing screening program. Under this program, all hospitals approved by the CCS program (191 hospitals, which deliver about 70 percent of all newborns in the state) would be required to offer hearing screening tests to newborn infants. The proposed funding consists of (1) $3.4 million ($2.2 million General Fund) and ten new positions for the Department of Health Services state operations, (2) $2.5 million ($1.3 million General Fund) for local assistance in the Medi-Cal program, and (3) $221,000 ($111,000 General Fund) for local assistance in the CCS program. The funds allocated to the Medi-Cal and CCS programs would be used to reimburse providers, on a fee-for-service basis, to conduct the screening tests for those infants eligible for these programs.
The proposal includes $1.5 million in contract funds to establish three Regional Early Hearing Detection and Intervention Centers to certify hospitals for participation in the program and assist hospitals in start-up and ongoing management activities, including the provision of staff training and technical assistance. In addition, the centers would maintain a database and would be responsible for (1) advising physicians of the results of the screen, (2) assuring that follow-up testing and diagnostic evaluations are performed, and (3) assuring that referrals are made for further intervention when appropriate.
The proposal also includes $750,000 to contract for a public awareness educational and outreach program and $300,000 to contract for the development of a computerized tracking system.
Program Has Merit but Cost Estimates Need Better Documentation.We agree that the proposal to establish a state newborn hearing screening program has merit. Even though a very small percentage of children have a permanent significant hearing loss, early detection followed up by appropriate interventions can enable a child to realize his or her full potential in the development of language and other communication skills. This, in turn, can lead to long-term public savings by reducing the need for special school programs. We note that several other states have implemented universal newborn hearing screening programs.
The department, however, has very little documentation of the specific cost estimates for the various components of the proposal. While it is difficult to estimate the costs of a new program, we believe that the department should provide an expenditure plan for the proposed contract funds, and should better justify the need for these funds and the proposed new positions by collecting data on programs that have already been established in other states.
Regarding the state operations request, we agree that some level of state support is needed to provide coordination, monitor the tracking system, and provide technical assistance. The request for ten new positions and three regional centers at $500,000 each, however, seems somewhat excessive. We note, in this respect, that many hospitals in California have implemented, without external assistance from the state, audiology programs that include hearing screens for infants.
We also recommend the establishment of a computerized tracking system. The department, however, has submitted no basis for its estimated cost of $300,000, other than to indicate that a software package could be leased from another state for $1 per screen, or about $115,000 in 1998-99. No other alternatives were presented, nor were the remaining costs justified by any expenditure plan. We note that the department currently operates a tracking system for genetic disease testing.
Similarly, we agree with the concept of contracting for an outreach program; but the department has no basis for the estimated cost of $750,000, other than to indicate that the proposal would include brochures distributed to the hospitals, public announcements, and other materials. We also note that the budget proposal includes an additional increase of $107,000 for printing expenses. The department indicates that this would be used for items such as regulations and notices to the hospitals. We believe that the amount is excessive. To put it in perspective, the entire budget for printing expenses in 1998-99 for the Managed Risk Medical Insurance Board, which administers several health insurance programs (including the new Healthy Families Program) amounts to $55,000.
With respect to the local assistance costs, the $2.5 million proposed for Medi-Cal benefits assumes that only 30 percent of the newborns will be tested in 1998-99, due to the time it will take to implement the program. This assumes a relatively slow "ramp-up" for the program, given that the requirement for hospital screening would take effect at the beginning of the fiscal year. Finally, the Medi-Cal estimate assumes a cost per screening test of $30. We note that the corresponding cost in Colorado, according to the program administrator, is $25 per screen.
Accordingly, we withhold recommendation on the proposal, pending submission of additional justification of the cost estimate by the department.
The Governor's budget proposes $10 million ($5 million General Fund) in the current year and $10.9 million ($5.5 million General Fund) in the budget year for the Department of Health Services--and additional funds for the Department of Justice--to support litigation activities in connection with the state's lawsuit against the major tobacco companies. The lawsuit seeks damages against the tobacco companies to recover state-paid costs of medical care for tobacco-related illnesses.
For a discussion of this issue, please see the "Crosscutting Issues" in the Judiciary and Criminal Justice chapter of this Analysis.
A developmental disability is defined as a disability, related to certain mental or neurological impairments, that originates before a person's eighteenth birthday, constitutes a substantial handicap, and is expected to continue indefinitely. The Lanterman Developmental Disabilities Services Act of 1969 entitles individuals with developmental disabilities to receive a variety of services, which are overseen by the state Department of Developmental Services (DDS). The department contracts with 21 nonprofit regional centers (RCs) to coordinate educational, vocational, and residential services for approximately 140,000 clients each year. In addition to providing some services directly, such as diagnosis and case management, the RCs purchase services from providers in the community.
Individuals with developmental disabilities have a number of residential options. While most live with their parents or other relatives, thousands live in their own homes or in group homes that are designed to meet their medical and behavioral needs. An additional 4,000 live in five state-run developmental centers (DCs).
The budget proposes $1.8 billion from all funds for support of DDS programs in 1998-99, an increase of 11 percent over estimated current-year projections. The budget proposes $634 million from the General Fund, which is $87 million, or 16 percent, above estimated current-year expenditures from this funding source.
The Department of Developmental Services' Community Services Program includes community-based services provided to clients through the RCs. These services include assessment and diagnosis of children and adults, early intervention services for young children, placement in residential care facilities and daytime treatment/activity programs, arrangement for transportation when needed, and family supports such as respite care and counseling.
We recommend that funds appropriated for case management be scheduled separately in the Budget Bill in order to facilitate legislative oversight. We also recommend adoption of supplemental report language requiring the department to report on the implementation of its plan to augment case management.
Background. Regional centers coordinate the delivery of services to developmentally disabled persons residing in the community. The care centers are private nonprofit corporations under contract with the department.
Client program coordinators (CPCs) at the RCs provide case management services for RC clients. The recent federal review of California's Home and Community Based Services federal waiver program cited the state for deficiencies in case management activities. Specifically, the deficiencies were: (1) unreasonably high caseloads; (2) a lack of in-service training for case managers; (3) a high rate of turnover among case management staff; and (4) inadequate or unavailable client records, such as physical and mental health histories, which are essential to the proper management of client services. In response, the budget proposes to increase RC funding by $31 million ($21 million from the General Fund) in order to lower the actual case manager/client ratio from an estimated 1:90 to 1:62.
Actual Staffing Ratios Higher Than Budgeted. Although CPCs currently are budgeted at a 1:62 ratio, a 1997 survey by the Association of Regional Center Agencies estimates that RCs actually operate at a ratio of one CPC per 90 clients. The department indicates that RCs, on average, operate at this higher ratio for the following reasons:
According to the department, these high caseloads prevent CPCs from providing adequate case management services to clients and from making quarterly monitoring visits to clients' residences as required by state law. In order to increase the number of case management staff hired by the RCs and restore case management services to the preferred 1:62 ratio, the department proposes the following actions, phased in over a two-year period:
Proposal Contains Technical Errors. The department indicates that it completed its proposal to augment case management services before it completed the November 1997 RC caseload estimate. Because of this, the case management proposal was based on caseload numbers that have since been revised upward. In addition, the case management proposal and the RC budget overlap in a number of areas, which, if approved, would result in double-funding of the same items. The department indicates it will submit a revised case management proposal based on more recent caseload estimates and make other technical adjustments to the plan in the spring. The department also indicates it will add one or more substantive items to the proposal. The Legislature cannot fully consider the proposal without knowing what these items entail.
Analysis and Recommendations. We believe that providing additional funds to make RCs more capable of achieving a 1:62 case management ratio is reasonable. In this respect, we note that the 1997-98 Budget Actappropriated $5.6 million for increased case management staff in the RCs and required the DDS to report by April 1, 1998 on (1) the number of positions created and filled with the funds and (2) the prior and new case management ratios at each RC. We recommend that the department meet this deadline so the Legislature can consider the report in conjunction with the revised augmentation plan.
We will review the department's report and the revised plan when they are submitted, and report our findings and recommendations to the budget subcommittees.
We note, however, that the proposal does not include budget bill language to ensure that RCs use the funding solely for its intended purpose. The department indicates that it will include such requirements in its 1998-99 contracts with the RCs. To facilitate legislative oversight and control, however, we recommend that all funds appropriated for case management staff be scheduled separately in the Budget Bill.
We further recommend the adoption of supplemental report language requiring DDS to report on the outcomes of its augmentation plan, including but not limited to:
Specifically, we recommend the following supplemental report language:
The Department of Developmental Services shall, by November
30, 1999, submit a report on the implementation of its plan to
increase regional center case management staff to the appropriate
legislative fiscal committees, the Joint Legislative Budget
Committee, and the Department of Finance. The report shall
contain the number of case management positions created and
filled during 1998-99, the prior and new caseload ratios, and the
number of quarterly monitoring visits made during 1998-99 and the
outcomes of those visits.
We recommend a reduction of $3.3 million from the General Fund to more closely align proposed regional center position upgrades with actual duties and salaries. We further recommend that proposed new positions in the centers be funded at the first salary step, to be consistent with standard budgeting practice, for an additional General Fund savings of $2.9 million. (Reduce Item 4300-101-0001 by $4,511,000, Item 4260-101-0001 by $1,686,000, and Item 4260-101-0890 by $1,789,000.)
Background. The RC budget for case management and related staff is based on a salary schedule that was created in the 1970s. The schedule is based on state job classifications that the department considers to be equivalent to RC positions. Although this schedule is used to formulate the department's annual budget and is the basis for contracts with the RCs, the RCs ultimately set their own salaries because they are nonprofit organizations, not state entities. As a result, there currently exists a significant disparity between the actual salaries paid by the RCs for certain types of staff and the salary schedules that are used by the DDS to budget funds for the RCs.
Budget Proposal. The budget proposes $16.7 million ($11.7 million General Fund) to increase the salary schedule for several job classifications at the RCs (part of which is included in the case management proposal described previously). This proposal would affect 3,775 positions, including 2,484 that currently exist and 1,291 that would be created through proposals to increase the number of case management staff in 1998-99. Figure 17 compares the salaries currently used by the DDS to budget funds for RCs with the proposed salaries.
Proposed Case Management Salaries
|Client program coordinator:|
|With master's degree||28,649||37,824||32.0|
|Without master's degree||28,649||30,240||5.5|
|aOne supervising counselor is budgeted for every eight client program coordinators.|
|bOne clerical position is budgeted for every four professional positions.|
Proposed Changes Represent Position Upgrades. The current salaries for these positions are based on 1989-90 salaries for the equivalent state job classifications. Salary increases granted to state workers since then were not automatically budgeted for the RCs because RC staff are not state employees. However, a 1996 survey by the department found that RCs have been redirecting funds from other areas to pay case management staff at salaries above the budgeted levels. In response, the Governor's budget for 1998-99 proposes to increase budgeted salaries to more closely reflect the actual salaries being paid by RCs as shown in Figure18.
The budget proposes to change the state job classifications that are used in the existing salary schedule. For example, supervising counselors would receive the average salary for a Community Program Specialist III and clerical employees would receive the average salary for an Office Technician.
Our analysis indicates that the proposed classifications for three of the four types of positions represent, in effect, position "upgrades" in that they go beyond the salary increases that would be needed to reflect the cost-of-living adjustments that have occurred since 1989-90 (a total of about 13 percent). As a result of these upgrades, the proposed salaries are significantly higher than the actual salaries for three of the four positions as shown in Figure 19 (see page 86).
Position Upgrades Excessive. The position reclassifications are justified if they reflect the duties performed and are necessary to compete in the market for qualified employees. On this basis, we recommend approval of the two client program coordinator classifications. However, we believe that the proposed classifications for supervising counselors and clerical employees represent excessive position upgrades as shown in Figure 19.
Supervising counselors have a wide range of duties, from direct supervision and training of CPCs to communication with service providers, advocates, clients and their representatives, and other members of the community. While the proposed upgrade to Community Program Specialist (CPS) III would take into account the supervisory function of the position, the CPS duties are more policy-oriented and analytical in nature than is required of a supervising counselor. In addition, basing the supervising counselor salary on the CPS III classification would result in an 18 percent increase above the actual salary for existing RC staff.
Proposed Case Management Salaries
|Client program coordinator:|
|With master's degree||33,938||37,824||11.0|
|Without master's degree||30,297||30,240||-0.2|
|aEstimate based on 1996 survey by Department of Developmental Services.|
We reviewed a variety of state position classifications and found several that would be more closely related, with respect to duties and salary, to the supervising counselor position. Of these, we recommend that the department use the Rehabilitation Supervisor I (Administrator) classification as the basis for setting the salary for supervising counselor. The core duties of a Rehabilitation Supervisor I (Administrator) are consistent with those required of a supervising counselor--the position coordinates and directs staff whose jobs are similar to those of client program coordinators, performs duties in a client-oriented setting, and communicates with agencies and providers in the community. Updating the salary schedule to reflect the current Administrator salary would raise the budgeted salary by 17 percent and increase the average supervising counselor salary just above the actual salary being paid by the RCs (see Figure 18).
We also recommend a more appropriate state classification for clerical staff. We believe that the Office Assistant (Typing)--Range B job specification would be more closely aligned with the types of duties performed by RC clerical staff and would better reflect the actual salaries currently paid. Individuals in Range B of the Office Assistant classification can work independently on a variety of relatively complex clerical duties that require strong typing skills and entail regular communication with the general public. Accordingly, we recommend that the clerical positions be upgraded to the Office Assistant (Typing)--Range B level. This would raise the budgeted salary by about 25 percent and increase it to about 7 percent above the actual salary being paid by the Rcs.
Governor's Proposal and LAO Recommendations
|New position classification||Community
|Proposed average salary||$52,398||$44,628|
|Client Program Coordinator (Master's )|
|New position classification||Psychiatric
|Proposed average salary||$37,824||$37,824|
|Client Program Coordinator (Without Master's)|
|New position classification||Social Work
|Proposed average salary||$30,240||$30,240|
|New position classification||Office Technician
(Typing) Range B
|Proposed average salary||$27,096||$23,388|
Adoption of our recommendations for the supervising counselor and clerical staff classifications would result in a General Fund savings of $3.3 million in 1998-99 ($3.1 million in the DDS budget and $192,000 in the Department of Health Services [DHS] budget).
Budget New Positions at First Salary Step. The proposal to upgrade salaries does not distinguish between existing positions and proposed new positions, in that both categories are budgeted at the average or mid-range salary levels for their classifications. The department has not justified the need to budget new positions at the mid-range salary level of the relevant position classification, rather than the first step as is consistent with standard budgeting procedures. Accordingly, we recommend that the proposed 1,291 new positions for case management be budgeted at the first salary step. This would result in a General Fund savings of $2.9 million in 1998-99 ($1.4 million in the DDS budget and $1.5 million in the DHS budget).
We recommend a reduction of $4 million from the General Fund for the proposed training program for community care facility employees so the budget will be consistent with the department's planned phase-in of training classes and pay increases associated with these classes. (Reduce Item 4300-101-0001 by $1,569,000, Item 4260-101-0001 by $2,412,000, and Item 4260-101-0890 by $2,558,000.)
Background. An estimated 23,000 individuals with developmental disabilities live in 4,400 community care facilities (CCFs). These facilities are licensed by the Department of Social Services (DSS) and governed by both DSS and the Department of Development Services (DDS) regulations. The DDS training regulations require new CCF employees to complete an on-site orientation within their first 40 hours of work and receive an average of eight hours of continuing education each year.
The recent federal review of California's Home and Community Based Services federal waiver program cited the state for deficiencies in the quality of care provided in some CCFs, specifically: (1) a lack of supervision needed to ensure resident safety, (2) unsanitary conditions in bathrooms and kitchens, (3) a lack of basic necessities such as clean linens and adequate food, (4) inadequate services to help clients integrate into the community and improve their functioning ability, and (5) homes that were in disrepair to the point of being dangerous.
In response to these findings and other concerns regarding the quality of care in community facilities, the budget proposes $19.8 million ($14.5 million from the General Fund) in 1998-99 to plan and implement a formal training program for CCF employees. As part of the proposal, DDS plans to adopt regulations requiring all CCF employees to complete two 35-hour training courses within two years, beginning in January 1999. Employees would receive a 10 percent pay increase after completing each course and passing subsequent competency exams.
The department estimates that about 18,000 employees would be affected by the new regulations. However, the department intends to allow experienced staff to take the first competency test without attending classes. Those who pass would receive an automatic pay increase and be exempted from the initial 35-hour training course. The department estimates that about 1,600 CCF employees (half of those who are expected to seek an exemption) would pass the test and receive a 10 percent pay increase early in 1999.
Funding for the training program would be provided over three fiscal years. The budget proposal would fund four components of the training plan in 1998-99:
Pay Increase Is Overbudgeted. The department intends to allocate the funding for pay increases and overtime/coverage costs through CCF rate increases that would take effect January 1, 1999. The department indicates that it would grant a rate increase to all providers on this day, to cover the salary and overtime costs. The proposed rate increase, however, is based on the amount of funds that would be needed if all employees who would undergo training in 1998-99 had completed the required training as of January 1, 1999--the date on which the program will be implemented. This is unrealistic and inconsistent with the department's implementation plan, which calls for the training to be phased in throughout 1999. If training is phased in as planned, the total amount needed in 1998-99 would be $7.8 million ($4.8 million from the General Fund), taking into account the employees who are expected to be exempt from the first training course.
We recommend that the budget be adjusted so that it is consistent with the department's plan to phase in the training classes. This would result in a General Fund savings of $4 million in 1998-99.
We recommend that the Department of Developmental Services, in cooperation with the Department of Rehabilitation (DR), include services provided under the DR Habilitation Services Program in the state's request for a new Medicaid Home and Community Based Services federal waiver. This could result in a significant increase in federal funds and commensurate savings to the state.
Background. In December 1997 the Health Care Financing Administration (HCFA) refused to renew California's Home and Community Based Services waiver, which allows the state to collect federal Medicaid reimbursements for up to 35,105 developmentally disabled clients who receive community-based services as an alternative to institutionalization. In making its determination, HCFA cited instances of inadequate state oversight of the program and a lack of monitoring to ensure that waiver recipients receive quality services. The state continues to receive federal funds for existing waiver recipients under two 90-day extensions while it prepares a new waiver application to submit to HCFA. The application is due by March 28, 1998, and HCFA indicates that it plans to act on the new waiver by July 1, 1998.
In a report issued January 12, 1998, HCFA suggests that DDS consider adding "expanded habilitation services" to its allowable waiver services. "Expanded habilitation" includes supported employment services, prevocational training, and educational services that are designed to help developmentally disabled individuals develop skills that could lead to employment. These services are provided to some developmentally disabled clients at day programs funded by DDS, and the HCFA report refers to these services in its recommendation.
Department of Rehabilitation Also Provides Habilitation Services.Regional center-funded day programs are not the only providers of habilitation services to developmentally disabled clients. About 6,000 clients who receive services through the supported employment component of DR's Habilitation Services Program (HSP/SEP) could be eligible for waiver services. Not all of the HSP/SEP clients would automatically qualify for the waiver, which requires a determination that an individual would require institutionalization without the provision of waiver services. The DDS indicates that it could develop an estimate of who would be eligible. The department also informs us that it is interested in expanding the waiver to include DR clients, but has not indicated whether it intends to do so.
The budget proposes General Fund expenditures of $35 million for HSP/SEP services in 1998-99. Thus, federal funding at the Medicaid sharing ratio of approximately 51 percent could result in significant state savings, depending on the amount of expenditures that are eligible for federal funds and the increased state administrative costs to document eligibility and report the client costs. We note that the state would receive matching federal funds for these administrative costs.
Based on DDS's experience with the existing waiver, we believe it is very likely that the savings would outweigh the administrative costs. Accordingly, we recommend that DDS include DR clients in its application for a new waiver, and that the two departments report during the budget hearings, prior to the application deadline, on their intentions and the estimated fiscal effects of this action.
We withhold recommendation on the $2 million proposed for expansion of supported living services in 1998-99 because the department (1) has yet to allocate $1 million appropriated in the current year for expansion of these services and (2) is in the process of collecting data from the regional centers regarding the demand for the services.
Background. Supported living arrangements are designed to give developmentally disabled individuals the ability to live in their own homes while receiving a variety of support services that are tailored to their needs. Commonly provided assistance includes personal care (such as bathing and grooming), domestic services (such as cooking, shopping, and housecleaning), paid roommates or personal attendants, 24-hour emergency care, and adaptive equipment. These services may be provided in addition to similar services that are available through the In-Home Supportive Services program in the DSS. Supported living services are highly individualized and change as a client's needs evolve. Services generally are coordinated by supported living agencies, upon referral by a RC.
More than 1,250 RC clients live in supported living arrangements, and the department expects that number to increase due to growing interest in supported living as a residential option. The department estimates that RCs spent about $28 million for supported living services in 1996-97. The DDS is in the process of surveying RCs to determine the precise number of clients receiving supported living services, current expenditures for supported living, and the projected future demand for these services.
Current-Year Expansion. The 1997-98 Budget Act appropriated $1 million from the General Fund to expand supported living services for RC clients in the current year. At the time that this analysis was prepared, the department was receiving project proposals from the RCs and indicated that it would allocate these funds to selected projects in late February. Regional centers were encouraged to propose projects that would help start new supported living agencies; expand existing agencies; or assist consumers with one-time costs such as furnishings, appliances, rental deposits, and modifications to make homes accessible.
Budget Proposal. The budget proposes to continue the $1 million appropriated for expansion in the current year and add another $1 million to further expand services in 1998-99. However, because DDS has not yet allocated the funds appropriated in 1997-98, it has been unable to determine the actual need for continuation funds in 1998-99. The department indicates that it will adjust the budget proposal in the spring to reflect the projects funded in the current year and the results of the RC survey. The survey should also help to determine the need for further expansion in the budget year. Accordingly, we withhold recommendation on the $2 million proposed for continuation and further expansion of supported living services in 1998-99. We also recommend that the department report at budget hearings on the projects funded for the current year and the outcome of its survey.
We recommend a technical adjustment to the budget for ongoing case management services for developmental center clients placed into the community, for a General Fund savings of $375,000. (Reduce Item 4300-101-0001 by $276,000, Item 4260-101-0001 by $99,000, and Item 4260-101-0890 by $106,000.)
The budget proposes $1.4 million to provide "enhanced" case management services to 2,667 individuals who were placed from DCs into the community between 1993-94 and 1997-98 as a result of the settlement of Coffelt v. Department of Developmental Services. The goal of this funding is to provide a 1:45 case management ratio to these individuals, rather than the 1:62 ratio provided in the core staffing formula.
Our analysis indicates that the proposal to continue the baseline funding for these case managers in 1998-99 is overbudgeted due to a technical error in estimating these costs. We recommend adjusting for this error, which would result in a General Fund savings of $375,000 ($276,000 in the DDS budget and $99,000 in DHS' budget).Developmental Centers Program
The budget proposes $482 million from all funds ($39 million from the General Fund) for support of the DCs in 1998-99.
We recommend enactment of legislation directing the Department of Developmental Services to institute a process for conducting judicial reviews to determine the appropriateness of developmental center placements for current residents who have never had such reviews.
Background. Generally, the RCs and DDS determine whether a person with developmental disabilities qualifies for placement in a DC. This determination is made after consulting with a number of people, including the person who is disabled, their parents or conservator, physicians and other staff who can evaluate the needs of the person, and any other friends, relatives, or advocates who help plan the services that will be provided to the client.
To be admitted to a DC, an individual must fall into one of the legal categories for which admission is authorized. These categories are defined in various sections of the Welfare and Institutions Code and Penal Code, which generally spell out due process requirements for making such placements. In this respect, Welfare and Institutions Code Section 4825 allows for the placement of "nonprotesting" adults into a DC at the request of their parent, guardian, or conservator, without a judicial review before admission. In its 1981 decision In re Hop, however, the California Supreme Court ruled Section 4825 unconstitutional stating that persons with developmental disabilities who are unable to provide "informed consent" regarding their placement in a DC are entitled to a judicial review regarding the need for and appropriateness of such placement.
Subsequent to the Hop decision, various county entities (such as courts, district attorneys, and county counsels) adopted a variety of procedures to provide judicial reviews, often called "Hop reviews," for all new DC admissions. With a few exceptions, however, counties generally did notconduct Hop reviews for residents who had been admitted to DCs as nonprotesting adults or minors under Section 4825 prior to the 1981 decision. Therefore, although the placements of all DC residents are reviewed annually by developmental center staff and client representatives (who prepare each client's individual program plan), the ongoing placements of most residents admitted to DCs prior to 1981 have never been judiciallyreviewed.
Implementation of the In re Hop Decision Has Been Mixed. Counties, RCs, and DCs varied in their responses to the Hop decision. For example, Orange County, where Fairview Developmental Center is located, required Hop reviews for all residents who had been placed as nonprotesting adults prior to the Hop decision. These placements are reviewed annually, and the county district attorney's office is involved in the process. In contrast, nonprotesting adult residents of Agnews Developmental Center in Santa Clara County did not have Hop reviews, although residents admitted as minors have been judicially reviewed as they reached the age of 18. As of December 1997, about 1,600 current DC residents--most of whom were placed after the Hop decision--had received a judicial review designed to meet the due process standards set for Hop. In contrast, about 1,700 current residents--most, if not all of whom were placed prior to the Hop decision--had not received a judicial review (see Figure 20 below).
With and Without "Hop Reviews"
|aIncludes 44 pending cases.|
Any DC resident may file a writ of habeas corpus asking to be released at any time; however, the Supreme Court noted in Hop that it is inappropriate to place the burden of requesting release on individuals who have been determined mentally incompetent due to a disability. Failing to provide judicial hearings for these individuals also is contrary to legislative intent as expressed by Senate Concurrent Resolution 45 in 1987, which stated that persons admitted to DCs prior to 1981 were entitled to judicial review of their placements.
We note that the Supreme Court also declared unconstitutional the indefinite nature of placement under Section 4825, which requires no periodic review of the commitment to a DC. Most of the counties that have instituted Hop review procedures provide for annual or biennial review of the commitment, although some do not. Because of the Hopruling, we believe that commitments should be periodically reviewed to determine if continued placement in a DC is warranted.
Community Living Options May Exist for Many Unreviewed Clients.In recent years, the DC population and the number of annual admissions have dropped substantially as more community-based services have been developed, enabling more individuals with disabilities to live in private or group homes rather than DCs. More than 2,500 DC residents have moved into the community since 1994 as a result of the settlement of Coffelt v. DDS, which called for a reduction in the DC population and increased monitoring of community placements.
It is unknown how many of the 1,700 unreviewed DC residents could live in a less restrictive environment than the institutions. Nearly all Hop reviews conducted so far have resulted in a recommitment of the individual to the DC. However, staff at DCs, RCs, and the department suggest that a number of the unreviewed residents might be served just as well, if not more appropriately, in the community (notwithstanding the fact that the annual review of individual program plans has not led to changes in residential status). We note that reviews resulting in community placement generally would result in a net savings to the state. A 1991 study estimated that treatment in a DC costs roughly $24,000 more per year than treatment in the community.
Safeguards for Community Placements Are Increasing. Recent concern over the quality of care provided in the community has heightened awareness of the dangers developmentally disabled individuals face when moving from an institution. In response to these concerns, funds were appropriated in the current year to enhance case management and the monitoring of community-based services, and the 1998-99 Governor's Budget proposes increased quality assurance activities by DDS and the Department of Health Services. In addition, Chapter 414, Statutes of 1997 (SB 1039, Thompson) allows DC residents to be given "provisional placement" in the community for up to 12 months, with heightened monitoring of their cases and the ability to return to a DC at any time. This doubled the previous six-month provisional placement period.
Estimated Cost to Review Cases. The following types of costs are associated with judicial reviews: (1) Writing and compiling reports by physicians, case managers, and other parties at the DC and RC; (2) filing court documents to initiate the review process and notifying concerned parties that a hearing will be held, which is done by the county counsel or district attorney in a majority of the cases; (3) representing the client, generally done by a public defender (clients and their families or conservators are not required to retain private counsel, and most do not); and (4) conducting the hearings, which generally take place in Superior Court and last from 15 to 30 minutes.
We estimate a per-case cost of about $590 to $745 to review clients who already live in a DC, or a total cost of $1 million to $1.2 million for all 1,700 unreviewed residents. This estimate assumes that district attorneys or county counsels would file petitions and represent the petitioner at hearings, rather than a regional center using in-house counsel or contracting for legal work. When district attorneys do not represent the petitioner, estimated costs increase by about $235 to $280 per case--an additional $400,000 to $500,000 in total--primarily due to a significantly higher per-case cost for the regional centers within Los Angeles County. (Nearly one-third of the unreviewed residents live at Lanterman Developmental Center in Los Angeles County.)
We note that the budget proposes to add 16 health records technician positions in the DCs in 1998-99. In addition to other duties, these employees would be responsible for compiling records, processing court papers, and maintaining data on the commitment status of all DC residents. The department indicates that these activities would be directed toward processing additional cases for judicial reviews, including the 1,700 unreviewed cases. We estimate that the budget proposal, if enacted, would fund roughly $100,000 of the total costs we identified above.
Recommend Legislation Mandating Hearings for Unreviewed Clients.We recommend that legislation be enacted directing DDS to implement a process to review the nearly 1,700 DC residents whose placements have never been judicially reviewed. More community living options exist today than at the time of the Hop decision, and recent concern regarding the possible dangers of community placement is being addressed in the form of longer provisional placement, increased monitoring of cases, and enhanced quality assurance activities.
We further recommend that in developing this process, the department consider the following actions to reduce state costs:
We recommend that the Legislature augment the budget by $3.8 million from the General Fund to continue maintenance of Camarillo State Hospital and Developmental Center because California State University's proposal to assume control of the site is premature. (Increase Item 4300-003-0001 by $3,799,000.)
Pursuant to language in the 1996-97 Budget Act, Camarillo State Hospital and Developmental Center was closed in July 1997. The 1997-98 Budget Act appropriated $4.6 million from the General Fund for continued maintenance at the site, temporary administrative staff to finalize the closure, and related operating expenses. The budget proposes that these funds not continue in the DDS budget for 1998-99 because California State University (CSU) has been negotiating with DDS to assume control of the site by July 1, 1998. The budget proposal for CSU includes $16.5 million for this transfer.
As we discuss in our analyses of CSU in the Higher Education and Capital Outlay chapters, we believe this proposal is premature. Accordingly, we recommend that the Legislature continue $3.8 million in the DDS budget, which is our estimate of the amount needed for maintenance staff and operating expenses at Camarillo in 1998-99.
We recommend that most of the proposed new positions in the developmental centers be funded at the first salary step, to be consistent with standard budgeting practice, for a General Fund savings of $819,000 in 1998-99. (Reduce Item 4300-003-0001 by $97,000, Item 4260-101-0001 by $722,000, and Item 4260-101-0890 by $767,000.)
Background. Two of the state's five DCs, Fairview and Porterville, are facing sanctions as a result of recent licensing surveys by the Department of Health Services (DHS) and the federal Health Care Financing Administration. The surveys cited the DCs for numerous examples of inadequate care and understaffed residential and treatment units. As a result of the surveys, the state is currently unable to receive federal Medicaid funding for individuals who are newly admitted to the two institutions. If the state does not increase staffing in all five of its institutions, the department indicates that the DCs could all face some level of sanctions when they are next surveyed.
In response to these concerns, the budget proposes to add 1,703 positions in the DCs at a total cost of $107 million ($55 million from the General Fund) over the next four years. In 1998-99, the department would add 606 positions at a half-year cost of $31 million ($16 million from the General Fund). The proposed positions include medical and nursing staff to provide care to residents, train care providers, and assist DC residents who are placed into the community.
The largest component of this plan would provide 475 new nursing staff to treat and supervise DC clients, at a half-year cost of $10.1 million ($5.2 million from the General Fund) in 1998-99. The DCs employ several types of nursing staff, including registered nurses, licensed vocational nurses, and psychiatric technicians. Psychiatric technicians, senior psychiatric technicians, and psychiatric technician assistants comprise 75 percent of the current DC nursing complement.
New Positions Not Funded at First Step. We agree with the general intent of increasing staffing to meet federal and state licensing requirements. However, the budget proposes funding the new nursing positions at the average current salary for existing nursing staff, rather than the first salary step as is consistent with standard budgeting procedures. Due to a shortage of registered nurses in the state, we believe that budgeting registered nurse positions at the mid-range salary is justified in order for the state to compete in the market for these staff. However, the department has not justified the need to budget the remaining new positions at the mid-range level. Accordingly, we recommend that this group of positions be budgeted at the first salary step. This would result in a General Fund savings of $819,000 in 1998-99 ($97,000 in the DDS budget and $722,000 in the DHS budget).
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