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HomeMy WebLinkAboutMINUTES - 02131996 - D1 TO: BOARD OF SUPERVISORS :,.� Contra FROM: Phil Batchelor, County Administrator "" C�oa Coin DATE: February 13, 1996 °STq'covK`� SUBJECT: Second Quarter Budget Report and Potential Impacts from Budgets of the State and Federal Governments SPECIFIC REQUEST(S) OR RECOMMENDATION(S) & BACKGROUND AND JUSTIFICATION RECOMMENDATION(S►: 1. ACCEPT this report and DIRECT the County Administrator to continue to monitor the budget and implement corrective plans, where necessary. 2. ACKNOWLEDGE that AB 1483 will provide a State subsidy for the Probation Department's ranch program which will assist the Department in achieving-a balanced budget for the current fiscal year. 3. ACKNOWLEDGE that continued overcrowding at Juvenile Hall increases the likelihood of the Probation Department budget becoming out of balance and REQUEST the County Probation Officer to develop a Juvenile Hall population control plan which will control in-custody costs. 4.- ACKNOWLEDGE that the loss of Federal. IV-A funds creates an approximately $4.1 million revenue problem for the Probation Department next fiscal year and REQUEST the County Probation Officer to develop a budget reduction and/or revenue enhancement plan which will mitigate the loss of these funds. CONTINUED ON ATTACHMENT: —YES SIGNATURE: _RECOMMENDATION OF COUNTY ADMINISTRATOR—RECOMMENDATION OF BOARD COMMITTEE APPROVE OTHER SIGNATURE(S): ACTION OF BOARD ON Feb . 13g. APPROVED AS RECOMMENDED OTHER X APPROVED the 38 recommendations as presented with the addition of directing the County Administrator to send letters to the Governor, and the County's Federal and State Legislative Delegations expressing opposition to any proposals to redirect current federal and state responsibilities to local governments without the resources to operate and administer them, and to stress the need for the investment in education, training, and employment opportunities to lead to greater self-sufficiency which at the same time provides an investment in prevention and cost avoidance_ The vote was as follows: Ayes: Supervisors Rogers, Bishop, Torlakson, Smith* Noes: None Abstain: *Supervisor Smith on Recommendations Nos. 26, 27, and 32, because of a possible conflict. Absence: Supervisor DeSaulnier I hereby certify this this is a true and cor- rect copy of an action taken and entered on the minutes of the Board of Supervisors on the date shown. cc: County Administrator Sheriff-Coroner Attested: February 13, 1996 Health Services Director Phil Batchelor, Clerk of the Board of Social Service Director Supervisors and County Administrator Probation Officer By 2Kg=4Deputy J RECOMMENDATIONS (cont'd): 5. ACKNOWLEDGE that SB 681 will increase costs to the Probation Department for the commitment of selected juveniles to the California Youth Authority and REQUEST the County Probation Officer to prepare a report on the budgetary impact of this legislation and to develop a plan to mitigate the costs. 6. ACKNOWLEDGE that the budget of the Superior and Municipal Courts were balanced this fiscal year with $2,639,010 of one-time revenue sources which will not be available next fiscal year and REQUEST the Courts jointly to develop a budget plan for FY 1996/97 which recognizes this problem. 7. ACKNOWLEDGE that the Sheriffs Department budget for the current fiscal year was balanced with $1,394,610 of one-time funds which will not be available next fiscal year and DIRECT the County Administrator to work with the Sheriffs Department to resolve this issue. 8. ACKNOWLEDGE that the Social Service Department has made substantial progress in reducing the General Assistance budget shortfall, projected at$3.6 million in the first quarter budget report and now projected at$600,000. 9. DIRECT the Social Service Department and the County Administrator's Office to continue to closely monitor the Social Service budget and return to the Board with recommendations, as necessary, to ensure a balanced budget by the end of the fiscal year. 10. ACKNOWLEDGE that the Governor's proposed budget takes positive steps towards instituting programs designed to reduce welfare dependency. 11. ACKNOWLEDGE that substance abuse, mental health, child care, transportation and job development are very real barriers to family self sufficiency and that the Governor's budget does not recommend a financing plan to address these transition issues. 12. ACKNOWLEDGE that proposed time limits on AFDC, coupled with inadequate support resources, could lead to increased County costs for General Assistance. 13. ACKNOWLEDGE that the Governor's budget proposal to eliminate SSI/SSP eligibility for noncitizens and drug/alcohol dependent recipients could also substantially increase General Assistance program costs. 14. DIRECT the County Administrator to continue to monitor efforts in Sacramento which are directed at reforming the AFDC Program and report developments to the Board of Supervisors as events warrant. 15. ACKNOWLEDGE that the Health Services Department began FY 95-96 with an estimated $6 to $12 million shortfall. 16. ACKNOWLEDGE that the Phase I, Phase II and Phase III budget reductions, approved by the Board in June 1995, November 1995 and January 1996, significantly reduced the Health Services Department projected shortfall. 17. ACKNOWLEDGE that the Health Services Department has aggressively sought to reduce the shortfall through administrative changes, operational practices and other cost containment measures. 18. RECOGNIZE that as a result of aggressive claim management in the medical malpractice area, validated through an actuarial study, a $1.2 million premium payment by the Health Services Department will not be required this fiscal year. 19. ACKNOWLEDGE that $414,850 interest earnings on disproportionate share hospital payments has been released to the Health Services Department as a result of SB 487. 20. ACKNOWLEDGE that the recent release of $450,000 in state general funds to the County, 2 previously withheld as a result of a methadone Medi-Cal lawsuit, has averted the need for further reductions in substance abuse. 21. RECOGNIZE that these actions to contain costs, to avoid costs and to maximize revenue have significantly reduced the projected Health Services Department FY 95-96 shortfall with an estimated $3 to $4 million remaining problem. 22. ACKNOWLEDGE that additional budget reductions are necessary, not only to maintain the fiscal integrity of the Health Services Department, but also as part of restructuring of the Department to prepare for medical and psychiatric managed care and to remain competitive in the health care market. 23. DIRECT the County Administrator to work with the Health Services Department and Sheriff's Office to examine the feasibility of transferring budgetary responsibility for inmate medical and psychiatric services to the Sheriffs Department, effective FY 96-97. 24. AUTHORIZE the elimination of a .5 FTE Public Health Aide (Interpreter), .5 FTE Senior Disease Intervention Technician and .5 FTE Clerk-Experienced Level in the Public Health Division, Communicable Disease Refugee Program. 25. AUTHORIZE the elimination of 3 FTE temporary Institutional Service Workers and 1 FTE temporary Dietician in the Food Services Department of Merrithew Memorial Hospital. 6. AUTHORIZE a reduction in the physician on-call and call-back expense through a modification of the East County Family Practice rotation schedule. 27. DIRECT the Health Services Director to work with the Obstetrics Department and the residency 6 611- program regarding physician back-up for coverage by first year residents. 28. DIRECT the Health Service Director to investigate potential savings in transportation services through the use of WESTCAT bus service or other means. 29. AUTHORIZE the purchase of new laboratory analyzer equipment which utilizes a 100% dry chemical process in order to reduce the number of tests sent to outside reference laboratories for an estimated annual savings of$100,000. 30. AUTHORIZE the Health Services Director to reopen negotiations with the California Medical Assistance Commission (CMAC) regarding the daily hospital rate paid for inpatient Medi-Cal services at Merrithew Memorial Hospital. 31. DIRECT the Health Services Director to aggressively pursue Disproportionate Share Hospital program revenue resources. 32. DIRECT the Health Services Director to maintain the stringent cost controls currently in place regarding the use of paid overtime. 33. DIRECT the Health Services Director and County Administrator to maintain the strict personnel freeze controls currently in place for nonpatient care activity. 34. DIRECT the Health Services Director and County Administrator to continue to closely monitor the Health Services budget, to develop further refined estimates of the Health Services Department budget status and to return to the Board with further recommendations as necessary. 35. DIRECT the County Administrator to continue to monitor developments in Washington, D.C., related to Welfare and Medicaid Block Grants and report to the Board as developments warrant. 36. ACKNOWLEDGE that the Legislature has passed and the Governor has signed SB 681 which provides additional discretion for the Board in managing the General Assistance Program, but which also imposes new fees on commitments to the California Youth Authority. 37. ACKNOWLEDGE that the Governor has proposed additional State assumption of the costs of the 3 trial courts, capping the counties' contributions at the 1994-95 level and DIRECT the County Administrator to monitor efforts in the Legislature to implement the Governor's Trial Court Funding Plan. 38. DIRECT the County Administrator to monitor the proposed Workforce Development Board legislation in Washington, D.C., which would replace the present Private Industry Council. BACKGROUND/REASON(S) FOR RECOMMENDATION ft Since 1984, the County Administrator's Office has prepared quarterly reports which analyze the status of the budget and highlight the budget units which deviate from the budget plan in terms of expenditures and revenues. Actions which are necessary to ensure a healthy budget by the end of the year are recommended as part of the quarterly reporting process. Other items which have major fiscal impacts are also reviewed as part of this period report. This report incudes a special section on the potential impacts of the State and Federal Government actions on the County, both this fiscal year and in 1996- 97. A. STATUS OF CURRENT YEAR BUDGET General County Revenue At the half-year point, it appears that General County revenues will meet the budget target. Property tax revenues should be slightly below budgeted levels, after adjusting for city redevelopment agency and no and low city revenue losses and state mandated transfers to school districts. Additionally, this revenue source has been impacted negatively by property tax refunds which are forecasted to be higher than budgeted. A major concern about property tax revenue is the significant amount of property tax assessments being appealed by private industry. One industry sector has filed over $1,000,000,000 in property tax assessment appeals which, needless to say, may have a profound effect on property tax revenue this fiscal year as well as in future fiscal years. The Assessor is addressing this concern by enhancing resources in the assessment appeals area by securing funds from a state loan program designed to improve the administration of property taxes. The other major revenue sources are showing mixed results. Motor vehicle registration fees, interest earnings and business license fees are all above targeted levels, and above last year's level for this time of year. On the other hand, sales taxes and supplemental roll property taxes are below target and below last year's level for this period of time. Sheriff-Coroner The Sheriff-Coroner Agency is within acceptable expenditure levels for the second quart of fiscal year 1995-96. In the patrol and operations division, gross expenditures were 48% while the Detention division experienced a 50% expenditure level. The Coroner division experienced 49% gross expenditures for the reporting period and has met budgeted revenue for the year thus far. Actual revenues received through the second quarter of FY 1995-96 were $11,097,721 in the patrol division and $5,845,789 in detention, 31% and 34%, respectively. Sales-Tax Public Protection revenue was budgeted county wide in the amount of$39,503,149 and expected to be realized by year-end. The Sheriff-Coroner Agency receives 82.6% of this revenue and the District Attorney received the balance. Contract City revenues, which historically lag, generate 24% of the Sheriff's $36,597,819 budget for the patrol and operations divisions. These revenues, which are currently at 32% of budget, will be received by year-end. The Department has maintained an aggressive control of expenditures and is expected to achieve a balanced year-end budget. Probation Department Second quarter budget projections indicate that the net County cost for probation services is currently on target. Probation expenditures are within an acceptable range, however, revenues received are lower than the budget plan because of the customary lag in the receipt of state and federal aid. Still 4 looming is the threatened loss of federal entitlement funds for emergency assistance, representing a • potential loss of$4.1 million in FY 1996-97. Counties are optimistic, however, that at least partial relief from that loss may be found in the proposed pass-through by the State of welfare block grant funds. The outcome of this funding decision will likely have significant impact on Probation Departments statewide. For the past several years, the primary litmus tests used to indicate the health of the Probation Department's budget have been the population level at the Juvenile Hall and the number of juveniles in placement, both measurements of which are monitored regularly.. For the first half of the fiscal year, the average daily population (ADP) was 162 as compared to 159 for the same period in the prior fiscal year. The ADP exceeded the maximum budgeted capacity of 160 beds on 61% of the total days as compared to 50% for the same period in the prior fiscal year. Population in excess of 160 are considered "overflow" and are housed overnight in the unfunded Boy's Center (closed due to budget cuts in 1990), resulting in non-budgeted expenditures that hinder the Probation Department's ability to adhere to its budget plan. In addition, costs for nursing services, transferred to the Health Services Department in fiscal year 1993-94 for cost savings reasons, have risen significantly and pose a potential budget problem for the Department. Department costs for these services are to a great extent dictated by the service levels determined by medical professionals. Nursing costs will continue to be monitored. Additionally, population management strategies including custody alternatives such as home supervision and electronic monitoring continue to be exercised. Population decreased markedly during the month of December primarily as a result of an extraordinary number of juveniles completing their sentences at the Orin Allen Youth Rehabilitation Facility (OAYRF), allowing for the transfer of some of the Juvenile Hall population to the OAYRF. The number of juveniles in group homes, foster care and out-of-County placements is on the rise at an average of 166 as compared to the current budgeted level of 150. The practice of utilizing private placements as a custody alternative enabled the Department to manage its budget in the early 1990s when placements were more feasible as compared to the expense of running Juvenile Hall units. The State/County funding ratio at that time was favorable at 95%/5%. After the adoption of realignment in fiscal year 1992-93, the ratio changed to 40%/60%, diminishing the appeal of placements as a custody alternative option. The Board authorized in fiscal year 1993-94 the formation of a Placement Diversion unit in an effort to promote family reunification and reduce the number of costly placements. However, despite the diversion program, the number of placements far exceeds the original program goal of 135. The Department continues to explore lower cost custody and custody alternative options. Despite cost overruns anticipated from the combination of overflow at the Hall and the high placement caseload,we do not anticipate a deficit this fiscal year because of the expected final Title IV-A revenues and the potential camp subsidy revenues described earlier in this report. The budget for next fiscal year represents an awesome challenge for the Department in light of the potential loss of its budget-balancing revenues. On the horizon for the Probation Department, under the direction of new County Probation Officer, Terry Starr, are several innovative ventures. The Department is currently negotiating a cooperative agreement initiated by Supervisor DeSaulnier with the cities of Concord and Walnut Creek to allow juveniles sentenced to community service to be assigned to the graffiti eradication programs recently begun in those cities. The Department is also exploring the possibility of enhancing mental health services to Juvenile Hall residents under grant funding received by the County under the Federal Office the Juvenile Justice Delinquency Prevention's "Safe Futures" program. With the cooperation of the Juvenile Court and through the careful management of the Department's placement caseload, some services eliminated in 1989 for girls may be restored. The Department is also working in partnership with the County Office of Education on supplemental educational programs for OAYRF graduates. The County Administrator's Office will continue to work closely with the Probation Department and the Juvenile Court to assist in the restructuring of probation services and to monitor the Department's adherence to the approved budget plan. Preliminary Analysis of Camp Subsidy/New CYA Fees Under AB 1483: $671,000 anticipated (based upon prior camp subsidy) 5 Under SB 681: On an annual basis: 180 commitments: 22X50%X$31,000= $341,000 (Level 5) 12X75%X$31,000= 279,000 (Level 6) 146X$125X12= 219,000 (Level 4 and lower) $839,000 Total deal on an annual basis is $168,000 unfavorable! Social Service Department The Social Service Department currently faces a potential budgetary problem of approximately $320,000, based on straight line projections for administration, categorical aid and General Assistance. Administration -As reported in the first quarter, the administrative projected $1 million deficit is driven primarily by the GAIN and Family Preservation programs. GAIN has a projected expenditure of approximately$6.1 million at this time, approximately $740,000 over its $5.4 million budget. The deficit is driven by underallocation by the state as well as overexpenditures, primarily in the child care area. At this time, it is anticipated that federal pass-through revenues will be available to offset approximately $425,000 of this deficit. The federal pass-through is assumed in the projections; however, it is not a certainty. Also, as reported in the first quarter report, the state cut its allocation for the Family Preservation program from $1 million to $700,000 and required the County to make up the difference for the federal match requirement. This program helps reduce foster care costs for both the Social Service and Probation Departments. Categorical Aid - The categorical aids budget is currently projected at a surplus of approximately $1.3 million, primarily due to improvements in realignment revenue and flattening of the AFDC and IHSS caseload. It should be remembered, however, that the state does an end-of-year adjustment of its realignment revenue based on relative caseload among the counties. Consequently, flattening of our caseload may result in lower than projected realignment revenue at end-of-year. General Assistance - As has been reported to the Family and Human Services Committee, and to the Board of Supervisors, the General Assistance program projected deficit has been declining, due to implementation of Board approved program modifications. At this time, the projected deficit is approximately$600,000. Health Services Department The Health Services Department began the fiscal year with an anticipated shortfall of$6 to $12 million. This shortfall stemmed, primarily, from two causes: • reducing net county costs by $2 million below 1994 level; • absorbing the cost of service and supply price increases, retirement expenses, interdepartmental charges, merit increases and step increases. Over the past five years, the County subsidy to the Health Services Department has been declining, both in absolute and percentage terms: FY 91-92 FY 95-96 Approved budget $248.5 million $329.6 million Net subsidy $ 41.7 million $ 34.2 million % subsidy 16.79% 10.37% 6 The subsidy includes a state required maintenance of effort of$24.6 million in FY 95-96. The remaining $9.6 million of County subsidy includes $5.5 million for detention health services. In the Health Services Phase I, Phase II and Phase III budget reductions, the Board approved expenditure reductions in the hospital and clinics, public health, mental health and substance abuse. Based on these reductions, and aggressive actions taken by the Department to control expenditures and avoid costs, the projected shortfall is now estimated at $3 to $4 million. The Department also faces significant fiscal and programmatic uncertainties due to pending health care reform. The Department currently receives approximately $15.9 million annually in Medicare funding. Under current reform proposals, the department could lose $600,000 to $700,000 in the first year of implementation with a total of $5.9 to $7.4 million over a period of seven years. From Medi-Cal, the department currently receives $60.3 million per ;year. Medi-Cal losses are estimated in a range from a low$2 to$4 million to as much as $13 million annually. While it is assumed that these losses will not begin until the 1997 federal fiscal year (October 1, 1996), it is imperative that the County begin taking actions now to develop strategic plans and to maximize cost efficiencies. A complicating factor in the health care equation is the possibility that the state will modify eligibility standards, limit the current Medi- Cal benefit package and/or reduce payments to providers to reduce their costs under the federal block grant. Overexpenditures for medical and psychiatric care for detention inmates continues to be a major fiscal concern to the Health Services Department. Expenditures are running a projected $500,000 above the approved budget. These projected overruns reflect a 14% inmate population increase. Health care for detention inmates has historically been a function of the Sheriffs Office and under state mandate, the Sheriff has responsibility for inmates. Consequently, it appears an appropriate time to initiate discussions with the Sheriffs Department on this issue. Since the January 16, 1996 report to the Board on the Phase III reductions, the Health Services Department has received positive news on several fiscal fronts: 1. The state has released $400,000 in interest earnings on disproportionate share hospital payments to the County as a result of SB 487; 2. The Department will be able to avoid a $1.2 million premium payment in the medical malpractice area as a result of aggressive claim management,which has been validated through an actuarial study; 3. The state has released $450,000 to the Substance Abuse Division that had been withheld as a result of the methadone Medi-Cal lawsuit. The release of substance abuse money will enable the Department to continue funding Discovery House, which would have closed on March 1, 1996 absent the funding release. The Health Services Department is continuing to aggressively control expenditures through operational adjustments of its service level mix and types. In particular, the Department is focusing on ensuring that professionals responsible for direct patient care minimize time spent on ancillary administrative duties. The Department plans to continue to take such administrative action as possible to control costs, including, but not limited to, use of paid overtime and other actions. B. IMPACT OF STATE AND FEDERAL BUDGETS Federal Scene: We initially approached the 1995-96 fiscal year anticipating the enactment of massive Federal Welfare and Medicaid Block Grants which might have been effective retroactive to October 1, 1995. Given the stalemate over balancing the Federal Budget by the year 2002, and the increasing possibility that no overall Federal Budget may ever be enacted for the 1996 Federal Fiscal Year (FFY), the possibility that block grants will be enacted now seems less and less likely. Therefore, while keeping a watchful eye on Washington, D.C., we are proceeding on the assumption that there will be little or no impact from the Federal Government on the balance of the County's 1995-96 fiscal year budget. However, because of the failure of the Congress and the Administration to reach agreement on the remaining appropriations bills, several federally funded programs face an uncertain future, including the Private Industry Council, 7 Community Development Block Grant and Head Start. State Scene: At the State level, however, there has already been legislation passed which will have a significant impact on the County's 1995-96 and 1996-97 budgets. The Governor's Budget also contains several features which are likely to have a profound effect on the County if they are enacted. AB 1483 (illaraigosa): AB 1483 has passed the Legislature and has been signed into law by the Governor. AB 1483 provides the $32.7 million appropriation for juvenile probation ranches and camps. There are three major criteria which must be met in order to be eligible for a portion of this funding: O The program at the ranch or camp must meet certain criteria, including having in place a residential treatment program, a structured and disciplined program for each resident, individual counseling, physical fitness training, social alternatives to gangs, drugs, and alcohol, access to an educational curriculum, and coordination with parents or guardians focussed on family reunification. © The County must maintain the same number of beds as were available June 30, 1995. ® For the 1995-96 fiscal year, the County cannot reduce total county funding for the Probation Department below the level of funding for the 1994-95 fiscal year by an amount greater than the average percentage reduction to the five largest County Departments. The bill contains an urgency clause and therefore became effective as soon as it was signed by the Governor. The bill remains in effect only until July 1, 1996 and is repealed effective January 1, 1997. It is estimated that the County will receive approximately $600,000 from the enactment of AB 1483 to maintain the current funding level for the Orin Allen Youth Rehabilitation Facility (formerly the Byron Boys' Ranch). SB 681 (Hurtt): SB 681 has likewise passed the Legislature and has been signed into law by the Governor. SB 681 also contains an urgency clause and thus will became effective as soon as it was signed by`the Governor. SB 681 provides substantial relief to the County in the area of General Assistance. It also modifies some maintenance of effort requirements. Unfortunately it also contains the fee increase for commitments to the California Youth Authority (CYA). Specifically, SB 681 does all of the following: O Repeals the Proposition 111 local maintenance of effort requirement for receipt of certain gas tax revenue from the State. This maintenance of effort requirements has been suspended for the past five fiscal years. 0 Increases the monthly fee for each person committed to the CYA from $25 to $150, effective January 1, 1997. This includes all individuals who may have been committed prior to January 1, 1997, but remain in a CYA facility after that date. ® Imposes a charge to the County on certain individuals committed to the CYA, depending on the type of offense for which the individual is being committed, with a higher fee being charged for less severe offenses. The County will have to pay 50% of the cost of care for a level 5 offender, 75% of the cost of care for a level six offender and 100% of the cost of care for a level seven offender. The reported cost of care in a CYA facility is $31,000 annually. This is obviously designed to encourage counties to avoid committing offenders to CYA for less severe offenses. This charge is in lieu of the $150 per month charge noted above. However, the charge will be imposed based on " . . . any offense that has been sustained by the juvenile court and that is included in the determination of the maximum term of imprisonment by the juvenile court. . . ." As a result, if the court sustains both a very serious and a less serious offense, the charge could be imposed based on the lesser offense. The law provides that these provisions are also effective January 1, 1997. 8 ® Reduces the mental health realignment and Proposition 99 (tobacco tax) maintenance of effort • requirements. ® Makes the following changes to the General Assistance Program: 0 Allows a county, in calculating the General Assistance standard of care, to include the monthly actuarial value of up to $40 per month of medical care. The section also provides that it is not intended to either limit or expand the extent of the duty of counties to provide health care. 0 Extends the length of time the Commission on State Mandates has to render a decision on a county's application for a finding of significant financial distress when a county files an application while the application of another county is pending. 0 Reinstates the right of a county to adjust the General Assistance standard of assistance where a recipient shares housing. The adjustment can be 15%where the recipient shares housing with one other person, 20% where the recipient shares housing with two other persons and 25%where the recipient shares housing with three or more other persons. 0 Provides for a sanction period of up to 180 days for a General Assistance recipient who is "employable," as opposed to the current language which reads "able/bodied and mentally competent" for failure or refusal without good cause to follow certain requirements detailed in the law. This provision is operative only until January 1, 1997. 0 Allows a county to impose a durational limit on the receipt of General Assistance for an employable individual who has been offered an opportunity to attend job skills or job training sessions. The limit is three months in any 12-month period, whether or not the months are consecutive. 0 Allows a county to provide General Assistance through a variety of cash, in-kind aid, two- party payment, voucher, or third-party check. 0 Permits a county to impose a requirement that adult General Assistance applicants and recipients undergo screening for substance abuse when it is determined that there is reasonable suspicion to believe that an individual is dependent on illegal drugs or alcohol. 0 Permits a county to require as a condition of General Assistance reasonable participation in substance abuse or alcohol treatment programs for persons screened pursuant to the provision above and professionally evaluated to be in need of treatment, if the services are available at no charge to the individual. 0 Repeals the existing 15 day residence requirement effective January 1, 1997. 0 Repeals the existing sanctions language effective January 1, 1997. Other Provisions of the Governor's Budget: Trial Court Fundina: • Proposes to cap counties costs for the trial courts at 1994-95 level. Counties would still be responsible for court facilities, judicial benefits, and revenue collection. • Fine and forfeiture revenue collection above the 1994-95 level would be split equally between counties, cities and the State. • Creates 20 new judicial positions and funds them. • Establishes and funds a three strikes relief team of retired judges to assist in hearing second and third strike cases. 9 Prevention Programs: • Provides an additional $71 million to expand efforts to reduce unwed and teenage pregnancy. Federal Health and Welfare Block Grants: • Assumes passage of Welfare and Medicaid block grants at the Federal level. • Advocates the following features of Federal welfare reform: ✓ End open-ended entitlement provision. ✓ Eliminate waiver system and give states the flexibility to develop innovative programs. ✓ Repeal maintenance of effort requirement. ✓ Hold sponsors of legal immigrants responsible. ✓ Encourage work over dependency. • Proposes a new State welfare system relying on the following principles: ✓ There is a mutual obligation between the recipient and the government. ✓ Fathers and mothers are equally responsible for the financial support and nurturing of their children. ✓ Work should pay more than welfare. ✓ Welfare should not contribute to family breakup. ✓ Recipients should be treated with dignity and be held responsible for the direction of their own lives. ✓ A single program design cannot meet the diverse needs of families receiving welfare. ✓ Program administration should be simple, cost-effective, and performance-based. • The new State welfare program will include these reforms: ✓ Eliminate the "deprivation" requirement for a child to be eligible for welfare and make welfare available to low-income two-parent households. ✓ Ignore the size of the family and base grants on full-time employment at the minimum wage. ✓ Recognize that there are various reasons why families are not self-supporting and tailor programs to these major causes of dependency. • Provide four tracks to reflect the various causes of dependency: ✓ Ready to Work Program - for individuals who have job skills and an employment history to help get them back to work as quickly as possible and discourage long- term dependency. Flat cash grant with reductions in grant at six months and one year. Time limited to two years assistance. ✓ Family Transition Assistance Program -for minor parents and individuals without employment history, designed to provide intensive training leading to employment. Vouchers rather than cash grant. Time limited to five years. ✓ Disabled Family Assistance Program -for individuals whose dependency is based on the disability of an adult or child. Cash assistance which is time-limited based on anticipated duration of the disability. ✓ Child-Only Assistance Program -for aiding a child whose parents are ineligible or where a child is living with relatives in lieu of foster care. Not time-limited. • Medi-Cal Program would be restructured using these principles: ✓ Maximum use of efficient managed care strategies. 10 ✓ Promote fairness to workers and promote a work incentive by unlinking the welfare • connection. ✓ Operate within fixed budget constraints. ✓ Deliver cost-effective care. ✓ Operate as a rational, simplified system of care. ✓ Address the needs of special populations. ✓ Protect public health by coordinating it with personal care services. ✓ Reform the private small group insurance market to promote access to affordable coverage. ✓ Promote personal responsibility by requiring co-payments and deductibles. What is unclear is how much of this reform of the AFDC and Medi-Cal Programs could be implemented in the absence of a Federal Block Grant and how much the Governor may press to enact without additional Federal legislation or enact conditioned on the enactment of additional Federal legislation. Employment and Training Programs: • Anticipates passage of the proposed Federal Workforce Development Block Grant legislation to consolidate up to 100 Federal employment and training programs. Enactment of this Block Grant seems more likely than that for Welfare and Medicaid. This legislation would abolish the current Private Industry Council and replace it with a Workforce Development Board. Additional implementing legislation would be needed at the State level. Bond Measures: • Supports placing a total of$7.84 billion in bond measures on the ballot in 1996, as follows: K-12 and Higher Education - $3.0 billion: ✓ $2.025 billion for K-12. ✓ $ .975 billion for higher education Public Safety - $2.2 billion ✓ $1.642 billion for new State prisons ✓ $ .150 billion for added bed capacity at CYA ✓ $ .274 billion for capital outlay for State institutions ✓ $ .150 billion for local juvenile facilities Seismic Retrofit of State Highways and Bridges - $2.0 billion ✓ $1.35 billion for State freeways and bridges. ✓ $ .65 billion for State toll bridges. Water Programs - $540 million ✓ $220 million for a comprehensive water management plan for the Bay-Delta. ✓ $320 million for local wastewater treatment plants and reclamation facilities. Infrastructure Bank - $100 million ✓ $100 million to finance infrastructure that promotes economic development. AFDC Program: The Governor's Budget makes the following assumptions for the AFDC Program, some of which are clearly dependent on the enactment of a Federal Welfare Block Grant: • Assumes that the existing AFDC grant reductions which are awaiting Federal approval will 11 be effective March 1, 1996 [2.3% from 1994 and 4.9% from 1995]. The 2.3% reduction . has apparently been tentatively approved by the Federal Government, although apparently on conditions unacceptable to the Governor. • Assumes a new 4.5% grant reduction effective July 1, 1996, for a State General Fund savings of$111 million. • Assumes implementation of a maximum family grant by not increasing the grant when children are conceived while either of the parents is on AFDC. Grant savings will be realized by February 1, 1997. • Implements the teen pregnancy disincentive [AB 908, Chapter 307, Statutes of 1995] which requires a teenager to live with his or her parents as a condition of receiving aid. • Assumes passage of Federal and State legislation permitting the State to refuse to aid sponsored legal aliens effective July 1, 1996. • Assumes that the State will receive a Federal welfare block grant based on its AFDC allocation for Federal Fiscal Year 1995 (10/1/94 - 9/30/95). It should also be noted that past AFDC annual cost-of-living increases (COLA's) were postponed. Without the enactment of additional legislation these past COLA's all become effective in the 1996-97 fiscal year. The Governor assumes that legislation will be enacted to make past grant reductions and COLA suspensions permanent. This has a $300 million impact on the State General Fund if it does not happen. [Does it also have an effect on the County's ability to reduce General Assistance grants?] Children's Services Programs: The Governor's Budget includes the following, some of which are clearly dependent on a Federal Welfare Block Grant and others of which apparently could be enacted without additional Federal legislation: • Provides an additional $7 million for an adoptions initiative designed to increase the number of children placed for adoption. • Includes funding to implement the recommendations of the Child Support Court Task Force Initiative. • Provides State funding of$31.6 million to make up for an anticipated loss of Federal funds from the Child Protection Block Grant which is anticipated (combining Child Welfare, Family Preservation, Independent Living and Adoptions). Medi-Cal Program: The Governor's Budget proposes the following, some of which is clearly dependent on the enactment of a Federal Medicaid Block Grant: • Anticipates $1.6 billion in Federal funding for illegal immigrants over the next five years, including $215.7 million in 1995-96 and $303.4 million in 1996-97. • Anticipates that prenatal benefits for illegal immigrants will be discontinued effective March 1, 1996, pursuant to Federal Block Grant legislation. • Anticipates reducing benefits to legal immigrants, pursuant to Federal Block Grant legislation, to emergency services only, effective January 1, 1997. • Anticipates that individuals who are disabled solely due to alcoholism or drug abuse will be discontinued from benefits, pursuant to Federal Block Grant legislation, effective January 1, 1997. • Eliminates funding for eight optional services. 12