DMH—Governor’s Proposal for Budget Display Could Be Improved

Background. The DMH budget display shows expenditures by programs, which are further broken down into program elements in order to provide additional spending detail. The DMH’s Long–Term Care Services program is generally comprised of the department headquarters and five other elements. These elements are (1) Lanterman–Petris–Short, (2) the Penal Code and Judicially Committed, (3), CDCR, (4) Other Long–Term Care Services, and (5) the Conditional Release Program.

Governor Proposes to Eliminate One Program Element. The Governor’s budget proposes to eliminate the “Other Long–Term Care Services” program element. According to DMH, this element, which includes $3.4 million in reimbursements in the current year, was established to track various miscellaneous spending items, such as the provision of adult education services and the collection of rent from employees residing on hospital grounds. The DMH states that there is not a compelling need to separately track these reimbursements and they will instead be rolled up into the Penal Code and Judicially Committed program element.

Overall, More Detail Is Needed in Budget Display. We do not take issue with the Governor’s proposal to eliminate the Other Long–Term Care program element. However, if the administration is proposing to change its budget display for DMH Long–Term Care Services, in our view this is the appropriate time to consider making other improvements. We have identified additional modifications that could be made to provide more useful information on program expenditures.

Spending Information by Facility. The current budget display lacks detailed spending information on a facility–by–facility basis that would allow for improved legislative oversight. Tracking spending on a facility–by–facility basis is important because each of the five state hospitals, as well as DMH–run psychiatric programs at two state prisons, are somewhat unique. For example, Coalinga State Hospital was built in 2005 and primarily houses SVPs, while Napa State Hospital was built in the late 1800s and generally houses all commitment types except SVPs. These differences have important cost implications for the state as it manages a growing $1.2 billion General Fund Long–Term Care Services Program. Displaying expenditures on a facility–by–facility basis would allow the Legislature to more easily and accurately track long–term expenditure trends.

Modify Governor’s Proposal to Require Facility–Specific Expenditure Data. We concur with the Governor’s proposal to eliminate the Other Long–Term Care spending element. However, we recommend that the Legislature modify the request by directing the Department of Finance (DOF), which prepares the Governor’s annual budget plan, to take a technical budget action to include in its Long–Term Care Services budget display a breakout of expenditures by state–operated facility. This would allow for better tracking of facility–by–facility expenditures over time.