Overview

Expenditure Proposal and Trends

Caseload Trends

Spending by Major Program

Major Budget Changes

Policy Changes

Crosscutting Issues

Federal Funds Risk

Legislature Needs More Information on Federal Funds Maximization Proposal

Workforce Development

Governor Proposes to Restructure The Workforce Development System

Summary of the Governor's Proposal

Process for Reforming the Workforce Development System

Criteria for Evaluating the Reform Proposals

Comments on the Reform Proposals

The Proposed Labor Agency

Apprenticeship Consolidation Proposal

Vocational and Adult Education Consolidation Proposal

Increasing Local Flexibility Through Block Grants

Increasing Accountability

Shifting the Focus to Economic Development

Conclusion

Tobacco Settlement Fund

Background

Securitization of Tobacco Settlement Revenues

The Governor's Budget Proposal

Does Securitization Make Financial Sense?

Is Securitization a Sound Health and Budget Policy?

Settlement Fund Could Have Shortfall

List of TSF-Supported Programs Would Change

Hospitals Facing Financial Headaches

Background

Hospitals Face A Number of Financial Pressures

New Federal Rule Could Increase State Costs

Lawsuit Settlement Provides Some Relief

Ensuring a Stable Hospital System

Conclusion

Departmental Issues

Department of Alcohol And Drug Programs (4200)

Assessing the Governor's Proposed Budget Reductions

Details Lacking on Reduction Proposal

Drug Court Reduction Could Be Counterproductive

Reductions Could Be Offset With Federal Funds

Asset Forfeiture Proceeds Could Bolster Treatment Efforts

California Medical Assistance Program (4260)

Medi-Cal Benefits and Eligibility

What Benefits Does Medi-Cal Provide?

How Medi-Cal Works

Who Is Eligible for Medi-Cal?

Most Medi-Cal Spending Is For the Elderly or Disabled

Medi-Cal Expenditures

Moderate Overall Spending Growth in the Current Year

General Fund Deficiency in 2001-02$54 Million

Budget-Year Expenditure Growth

Medi-Cal Cost and Caseload Trends

Budget Forecasts Continued Caseload Growth and Dropping Costs

Overall Caseload Estimate Reasonable

Assessing the Governor's Budget Reduction Proposals

Assumption on Federal Relief is Risky

Provider Rate Reductions Could Reduce Access to Care

Proposed Copayments Decrease Provider Rates

Drug Budget Savings Rely on Filling Pharmacists Positions

Cuts Proposed in Medi-Cal Hospital Funding

Medi-Cal Managed Care: Where Do We Go From Here?

Managed Care Rates Lack Basis

Increasing Competition Could Reduce Costs

Expanding Managed Care to the Elderly and Disabled

Options

More Oversight Needed for Antifraud Activities

Nursing Home Proposal Would Add 55.5 Positions

Dual Enrollment in Healthy Families and Medi-Cal

Public Health

Child Health and Disability Prevention Program

Background

Advantages of the Governor's Proposal

Governor's Proposal Needs Work

Analyst's Recommendation

Tobacco Prevention Programs

Background

Budget Year Program Expansion Not Justified

Managed Risk Medical Insurance Board (4280)

Healthy Families Program

Background

The Budget Proposal

Caseload Issues

Budget Reflects Growing Children's Caseload

Elimination of CHDP Would Increase Caseload

Healthy Families Parent Expansion

Background

Implementing the Expansion

State Faces Potential Loss of SCHIP Funds

Background

Dual Enrollment in Healthy Families and Medi-Cal

Department of Developmental Services (4300)

The Regional Center System: Its Mission and Funding Are Misaligned

Background

How and Why RC Costs Are Growing

Regional Center Expenditures Growing Rapidly

Entitlement Drives Service Costs

Lack of Statewide Standards

State Could Be Receiving More Federal Funds

Community Services and Operations Face Financial Problems

Governor's Budget Proposes Modest RC Savings

Recommendations and Options

First Steps to Control Growth in General Fund

Analyst's Recommendations

Share-of-Cost Options

Other Options

Conclusion

Budget Adjustments

Community Placement Plan Funding Should Be Offset With Federal Funds

Technical Budget Adjustment for Leased Facilities

Department of Mental Health (4440)

State Hospital Issues

Hospital Growth Projections Lowered

Patient Caseload Overbudgeted

Additional Beds Not Needed Yet

New Prison Facility May Face Delay

Budget Should Be Realigned

Community Services Program Issues

Mental Health Services For Special Education Pupils

Background

Budget Proposal

Legislature Has Little Authority to Direct Resources for "Mandated" Programs

Significant Controversy Regarding Mandate Claims

LAO Recommendation

TBS Costs of New Services Almost Double

Employment Development Department (5100)

Budget Issues

Workforce Investment Act Discretionary Funds

Use WIA Funds To Offset Employment Services Costs

Assessing the Faith-Based Initiative

Background

Theories Behind Faith-Based Social Service Delivery

Key Theories

Research Assessing the Key Theories

California's Faith-Based Initiative

First Year: 2000-01

Second Year: 2001-02

Legal Issues

LAO Findings and Recommendations

Allocation of Funds Appears Inconsistent With Legislative Intent

Avoiding Pervasively Sectarian Service Delivery

Department of Rehabilitation (5160)

Budget Suspends Statutory Rate Adjustment

Legislature Needs More Information on Proposed Savings in the Habilitation Services Program

Department Of Child Support Services (5175)

Assumed Federal Law Change Creates a General Fund Risk

Increased Revenues Not Reflected in Budget

Withhold Recommendation on Automation Oversight

Department of Social Services CalWORKs Program (5180)

Caseload and Grants

Caseload Decline Ends

Budget Suspends Statutory Cost-of-Living Adjustment

The CalWORKs Time Limit: Implementation Issues

Background

Unresolved Policy Issues

Issue 1: How Should Counties Apply Exemptions From the Time Limit?

Issue 2: Post Time-Limit Services

MOE Spending Requirement

Achieving General Fund Savings While Meeting MOE Requirement

Count Additional Spending Toward MOE Requirement

Other Budget and Policy Issues

Budget Proposes Redirecting County Performance Incentives

Budget Expands County Block Grant But Proposed "Holdback" Is Disruptive

CalWORKs Needs Long-Term Budget Plan

Eliminate CalWORKs Grant Payments Under $150

Reinstate Senior Parent Deeming

The CalWORKs Child Care Program

No Penalty for Cash Management Violation

Withhold Recommendation on Impact of Federal Eligibility Changes

Community Care Licensing

Positions Exceed Estimated Complaint Investigation Workload

Foster Care

Supportive Transitional Emancipation Program Is Overbudgeted

Examining the Role of Foster Family Agencies

Background

History of Foster Family Agencies

Foster Care Length of Stay

Do Child or Family Characteristics Explain Length of Stay Differences?

Conclusion

Options for Reducing FFA Placements and Costs

Analyst's Recommendation

Assessing California's Foster Care Program Performance

Federal Government Shifts to New Review System

Components of the Reviews

How Performance Is Measured On the Statewide Assessment

What if California Doesn't Meet Federal Review Standards?

How Would the State Fare Under Selected Measures?

California Struggles With Federal Performance Measures

How Can the Legislature Aid in Improving Program Performance?

Conclusion

Food Stamps Program

California Food Assistance Program

Assumed Federal Eligibility Restoration Creates Some Budget Risk

Supplemental Security Income/State Supplementary Program

Budget Proposes to Suspend State Cost-of-Living Adjustment

In-Home Supportive Services

Maximize Federal Funds Through Eligibility Changes

Governor Proposes to Suspend State Participation in Wage Increase

Child Welfare Services

Maximize Federal Funds by Drawing Down Title IV-E Funds for Case Management

Health Insurance Portability And Accountability Act Compliance (9909)