Governor’s Proposed 2009-11 Budget

Governor’s Proposed 2009-11 Budget Presentation by: Kathy Leitch Assistant Secretary Aging and Disability Services Administration Presented to: ADSA Stakeholder Meeting Dec. 23, 2008

Summary: Client Impact of the Governor’s Budget: DDD: LTC: 1,000, or 2% of LTC clients, lose some service or have a reduced benefit. 50, or 0.1% of LTC clients, lose services entirely. 7,000, or 13% of LTC clients, will be served in a different way. • 800, or 4% of DDD paid services clients, lose some service or have a reduced benefit. • 150, or 1% of DDD paid services clients, lose services entirely. • 300, or 2% of DDD paid services clients, will be served in a different way. • 2,700, or 14% of DDD paid services clients, will shift from state only to a waiver. 12/23/2008 ADSA Stakeholder Meeting

Current Deficit:Comparable to the one in 1981-83, as portion of the state’s budget. W/Selected Policy Adds Maintenance Level * Chart from Senate Ways and Means Committee. These are estimated budget shortfalls based on best available information; in some cases data for prior fiscal periods might not be comparable. 12/23/2008 ADSA Stakeholder Meeting

Revenue Perspective:State general funds are in the steepest decline in over 20 years. Chart from Senate Ways and Means Committee. 12/23/2008 ADSA Stakeholder Meeting

Immediate Service Impact:Washington’s is among the nation’s most efficient care systems, so cuts have immediate service impacts. • Washington is one of only four states that met three measures of LTC progress from 1995 to 2005: • Total LTC spending per person 65+ only increased by 5% • HCBS spending increased by 32% • Nursing facility spending decreased by 37% • National average: 40 per 1,000 in nursing facility (age 65+) • Washington’s average: 17 per 1,000 in nursing facility (age 65+) • In DDD approximately 11,000 people have been determined DDD eligible , but do not have services. 12/23/2008 ADSA Stakeholder Meeting

ADSA Core Values:An efficient care system stems from ADSA’s adherence to four core values: • Prioritizing support for the most vulnerable. • Supporting what individuals and their families can do for themselves. • Prioritizing a consumer-driven system and keeping individuals in a home or community-based environment for as long as possible. • Providing the right supports, at the right time, and in the right amount, based on individual need. 12/23/2008 ADSA Stakeholder Meeting

ADSA Budget Overview:ADSA’s budget is primarily spent on services in the community. 12/23/2008 ADSA Stakeholder Meeting

2009-11 Budget Reductions:Key considerations Reductions preserved services for most ADSA clients. In ADSA, on average, for every person cared for in an institutional setting, three people can be cared for in the community. 12/23/2008 ADSA Stakeholder Meeting 8

2009-11 Budget ShortfallThe budget shortfall is nearly $6 billion (Near General Fund-State), not including $700 Million in constitutionally protected “rainy day” funds. Budget Stabilization Account End of 2009-11 $1,000 $700 $0 ($507) Net 2009 Supplemental Shortfall* What does $5 Billion mean? -State cost to run half of DSHS -State cost to run prisons and all higher ed. -15% of state revenue (2009-11 projected near GF-S) -23% of state’s operating budget, excluding basic education and debt service. ($1,000) ($2,000) 2009-11 Shortfall to Maintain Current Services ($4,407) Near General Fund in Millions ($3,000) ($4,000) Additional Shortfall w/ some policy adds-i.e. bargaining, 1-1029, vendor rates, etc. ($5,000) ($1,062) ($6,000) Total ($5,976) * The 2009 shortfall amount reflects the $174 million increase in spending offset by the reserves available in the near general fund. Data and chart from Senate Ways and Means Committee. 12/23/2008 ADSA Stakeholder Meeting

ADSA’s Budget in Context:DSHS is over one-third of the state budget.* *Omnibus Operating Budget, excludes Capital and main Transportation Budgets. 12/23/2008 ADSA Stakeholder Meeting

ADSA’s Budget in Context:ADSA is 24% of the DSHS budget. 12/23/2008 ADSA Stakeholder Meeting

Additional Federal Assistance:The Governor includes $700 million additional federal assistance in the 2009-11 Biennial Budget. • The Obama Administration is likely to propose an increase in the federal match rate for Medicaid. • Congress would need to fund. • It is presumed to be an increase of 8% for 16 months. • ADSA’s share of the additional federal assistance is $220 million. • If Congress does not approve, then deeper cost cutting would be necessary. 12/23/2008 ADSA Stakeholder Meeting

Policy Level Choices:The Governor did not fund several investments that would have added to the shortfall. • Provider collective bargaining agreements/arbitration awards and related “parity” rate increases. • $73 M GF-State, $137 M Total, cost avoided. • Additional worker training and qualification requirements (Initiative 1029 and HB2284) are delayed until 2011-13. • $21 M GF-State, $39 M Total, cost avoided. • $1.3 M GF-State, $2.6 M Total, is funded for necessary infrastructure, and additional background checks, in the meantime. • Vendor rate increases. • Collective bargaining for state employees. 12/23/2008 ADSA Stakeholder Meeting

Policy Level Choices:ADSA had requested several critical investments that were not funded.* • More staff at our regional and AAA offices to allow decrease in assessment and care authorization backlogs, more rapid investigation and resolution of Adult Protective Service complaints, and to meet standards for monitoring of in-home care plans. (Not Funded) • Expansion of programs identified in last session’s “Aging in Place” legislation that would help avoid future costs --- Aging and Disability Resource Centers and Family Caregiver Support. (Not Funded) • Transition services and employment for 2009-10 high school graduates with developmental disabilities. (Not Funded) • Increases in caseload, as well as per client expenditures, for families participating in the Infant and Toddler Early Intervention Program. (Not Funded) • Additional staff in the Resident and Client Protection Program (RCPP), within Residential Care Services (RCS), to investigate an increasing number of complaints of individuals abusing, abandoning, exploiting, or neglecting clients in residential settings. (Not Funded) *For a complete list of requests, see handout. 12/23/2008 ADSA Stakeholder Meeting

Policy Level ChoicesThe Governor’s reductions are made to the proposed “maintenance level” budget, which includes caseload and other mandatory items above the current 2007-09 budget. Some policy additions are also proposed. • Policy Choices Include: • DDD waiver placements • Training staff • Background Checks • Roads to Community Living • State Employee Health Insurance 12/23/2008 ADSA Stakeholder Meeting

Addressing the Deficit: Several broad categories can describe budget reductions and other means to solve the deficit. 12/23/2008 ADSA Stakeholder Meeting

2009-11 BienniumBudget Reductions from Maintenance Level, Page 1 12/23/2008 ADSA Stakeholder Meeting

Fiscal Year 2009Budget Reductions from Maintenance Level ADSA Reduction in the Governor’s 2009 Supplemental Dollars in Total Funds Governor Directed Freeze = -$4.7 million Governor Directed 1% Cut = -$4.3 million Governor Directed November Reduction = -$4.8 million TOTAL = -$13.8 million Savings Options for Fiscal Year 2009 • Elimination of Adult Day Health • Requiring an agency provider for some in home clients • Reduction in travel and equipment purchases • Hiring freeze for certain positions in program support, as well as the regions • State only clients move to the Basic waiver or Core waiver • Elimination, or reduction, of contracts (i.e. Fair Rental Study and AFH Dementia) • Rate reductions • Additional federal assistance 12/23/2008 ADSA Stakeholder Meeting

In Closing:There are opportunities to seek clarification and offer alternatives. • ADSA will provide more detailed information as it is known and will respond to questions. • ADSA will collaborate with other administrations to discover indirect impacts to ADSA clients, including: • ESA – Elimination of the General Assistance Unemployable (GAU) program • HRSA – Rate reduction for Regional Support Networks (RSN) • HRSA – Reduced funding for Drug, Alcohol, and Substance Abuse (DASA) programs • HRSA – Elimination of the General Assistance Medical program • HRSA – Alternate eligibility for the Basic Health program • HRSA – Elimination of funding for several pilot program (i.e. General Assistance mental health) • HRSA – Rate Reduction for inpatient and outpatient hospital rates • The Governor has invited feedback and alternative suggestions. • The legislative session is in front of us. • To be ready to implement July 1, 2009, if necessary, WAC amendment processes will begin immediately. 12/23/2008 ADSA Stakeholder Meeting

Governor’s Proposed 2009-11 Budget