HomeMy WebLinkAboutMINUTES - 05092006 - C.43 TO: BOARD OF SUPERVISORS Contra
FROM: DR WILLIAM WALKER, g ,,,�,�
Costa
HEALTH SERVICES DIRECTOR �o
DANNA FABELLA,
c�STA COUtt'� ~~ County
ACTING EMPLOYMENT & HUMAN SERVICES DIRECTOR
DATE: MAY 9, 2006 3
SUBJECT: AB 2469 (EVANS) — REALIGNMENT AMENDMENT
I
SPECIFIC REQUEST(S)OR RECOMMENDATION(S)8 BACKGROUND AND JUSTIFICATION
RECOMMENDATIONS:
OPPOSE AB 2469 (EVANS) which would amend the realignment agreement to allow small counties
to receive advance payments from the Sales Tax Growth Account.
BACKGROUND/REASONS FOR RECOMMENDATION:
Realignment is a complex funding mechanism that supports 19 mental health and social service
programs through a portion of the Vehicle License Fee and sales'tax. Revenues are deposited in
the Local Revenue Fund which is divided into a number of accounts, including the Sales Tax
Account and Sales Tax Growth Account. The Sales Tax Account was originally funded by the
revenues generated by the sale tax increase in its first year of existence, FY1991/1992. Each year
since then the "growth" in the sales tax revenue is put in the Sales Tax Growth Account. This base
amount plus the growth amount becomes the following year's base. Sales Tax Growth Account
funds are used to fund case load growth in the realigned programs, although in many years the
growth in revenues have not been sufficient to offset increased costs.
In recent years, expansion of the InjHome Supportive Services (IHSS) Program in California has
consumed most of the growth revenue, resulting in overall shortfalls that have reduced funding
available to other programs.
AB 2469 (Evans) would amend the realignment agreement to allow small counties to receive
advance payments from the Sales Tax Growth Account in order to fund their IHSS Program.
Supporters of AB 2469 argue that the bill would allow small counties with constrained budgets to
expand their IHSS Programs. Opponents argue that AB 2469 sets a precedent of prioritizing one
realigned program over another, that is, assuring funding for IHSS at the expense of child welfare,
adult protective services and mental health. Opponents also argue that since realignment money is
allocated as a block grant, counties can now spread any sales tax shortfall across all programs.
This flexibility would be eliminated u n� der AB 2469 since IHSS would be "pre-funded." In addition,
opponents argue that once a county claims a funding advance they would have to make such
claims in perpetuity, since no county would likely be able to afford the two-year transition back from
advance funding.
CONTINUED ON ATTACHMENT: X YES SIGNATURE:
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_v<ECOMMENDATION OF COUNTY ADMINISTRATOR RECOMMENDATION OF BOARD COMMITT
PROVE OTHER
SIGNATURE(S): 3 -�
-------- `— `�` ` — — ACTION OF
BOARD ON APPROVE AS RECOMMENDED__ V OTHER
VOTE OF SUPERVISORS I HEREBY CERTIFY THAT THIS IS A TRUE
AND CORRECT COPY OF AN ACTION TAKEN
UNANIMOUS(ABSENT Or AND ENTERED ON THE MINUTES OF THE
BOARD OF SUPERVISORS ON THE DATE
AYES: NOES: SHOWN.
ABSENT: ABSTAIN; /
ATTESTED
CONTACT: Sara Hoffman 335.1090 JOHN CUL EN,CL RK OF THE BOARD OF SUPERVISORS
AND COUNTY ADMINISTRATOR
CC: County Administrator's Office -
Dorothy Sansoe,CAO
William Walker,HSD
Dana Fabella,EHSD
Cathy Christian,Nielsen Merksamer
CSAC(via CAO) BY DEPUTY
^ • 1
Board of Supervisors
May 9, 2006
OPPOSE AB 2469 (Evans) — Realignment Amendment,
Page 2
Regardless of the merits of these arguments raised by supporters and opponents, key issue is
that AB 2469 would invite other legislation which could unravel the entire structure of realignment.
Contra Costa County has joined with other counties in the past to oppose all attempts to amend
realignment, even when the particular amendment would have benefited the County. The
realignment structure is not perfect, as acknowledged by all, but it is a complex mechanism that
has worked fairly well in the past. Once amended, it is likely that there will be other proposed
amendments to realignment. Contra Costa County received approximately $97.7 million in FY
2004/05 in realignment revenues ($133 million from vehicle license fees and $64.7 million from
sales taxes). These funds are vital for critical Health and Human Services programs. AB 2469
would set a dangerous precedent by altering the current funding structure.
r
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AMENDED IN ASSEMBLY APRIL 19, 2006
CALIFORNIA LEGISLATURE-2005—o6 REGULAR SESSION
ASSEMBLY BILL No. 2469
Introduced by Assembly Member Evans
(Coauthors: Assembly Members Baca, Bass, Berg, Calderon,
Dymally, Frommer, Garcia, Goldberg, Jerome Horton, Jones,
Karnette,Laird,Lieber,Lieu,Matthews,Negrete McLeod,Pavley,
Ridley-Thomas, and Wolk)
(Coauthors: Senators Cedill9, Denham, and Soto)
February 23, 2006
An act to add Sections 12300.3 and 12300.4 to the Welfare and
Institutions Code, relating to public social services.
LEGISLATIVE COUNSEL'S DIGEST
AB 2469, as amended, Evans. In-home supportive services and
personal care services: funding.
Existing law provides for the In-Home Supportive Services (IHSS)
program,under which, either through employment by the recipient, or
by or through contract by the county, qualified aged, blind, and
disabled persons receive services enabling them to remain in their own
homes. Counties are responsible for the administration of the IHSS
program. Existing law also provides for the Medi-Cal program,
administered by the State Department of Health Services,under which
qualified low-income persons are provided with health care services.
Services known as personal care option services, and that are similar
to those provided under the IHSS pr I ogram, are provided to certain
Medi-Cal recipients. Various IHSS program requirements, including
those relating to the manner in whIich each county may provide
in-home supportive services, are applicable to the provision of
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AB 2469 —2—
personal
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personal care option services. Under existing law,the state and county
share the annual cost of providing inihome supportive services and
personal care services.
Under existing law, the Controller allocates specified funds,
commonly referred to as realignment revenues, from the Local
Revenue Fund to counties, for the ,purpose of financing various
programs for the provision of services for needy persons.
This bill, notwithstanding existing law, would require the state to
annually pay a county with 250,000 persons or fewer, upon
submission of a claim, amounts previously paid by the county for the
provision of in-home supportive services and personal care services
during a current or prior fiscal year, for which the county is awaiting
reimbursement from realignment revenues. It would provide that the
state would be repaid from certain future realignment revenues due to
the county for caseload growth, for that portion of the amount paid to
the county that is attributable to caseload growth.
This bill would authorize any county to repay its general fund
amounts previously expended by the county on caseload growth that
were not previously reimbursed from realignment funds.
Vote: majority. Appropriation: no. Fiscal committee: yes. --
State-mandated local program: no.
The people of the State of California do enact as follows:
1 SECTION 1. The Legislature finds and declares as follows:
2 (a) Counties are currently awaiting reimbursement for a
3 portion of the in-home supportive services caseload growth that
4 occurred, and was paid for by counties, in-2003--04 2002-03.
5 (b) The delay in reimbursement to counties of realignment i
6 revenues to cover the cost of caseload growth for in-home
7 supportive services has caused small counties to suffer financial
8 hardship.
9 (c) It is appropriate for the state to ameliorate this hardship by
10 advancing the funds necessary to cover the full cost of the
11 In-Home Supportive Services program, against future
12 realignment revenues.
13 SEC. 2. Section 12300.3 is added to the Welfare and
14 Institutions Code, to read:
15 12300.3. (a) Notwithstanding Section 12306 or any other
16 provision of law, the Controller shall annually advance from the
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-3— AB 2469
1 General Fund to a county with a population of 250,000 or fewer
2 that makes a claim under this section, an amount equal to the
3 share of cost for provision by the county of in-home supportive
4 services and personal care services, and IHSS Plus waiver
5 services for either or both of the following:
6 (1) A prior fiscal year, for wliich the county is awaiting an
7 allocation from realignment revenues.
8 (2) The current fiscal year, from the county's anticipated
9 realignment revenue allocation.
10 (b) In order to receive a payment under this section, an eligible
11 county shall present a claim to the state. A county that elects to
12 make a claim for payment under, this section shall provide the
13 state with appropriate documentation in support of its claim.
14 (c) Notwithstanding any other) provision of law, an amount
15 equal to that portion of a payment made pursuant to subdivision
16 (a) that is attributable to caseload growth shall be repaid to the
17 state from any future allocation due to the county from the Sales
18 Tax Growth Account of the Local Revenue Fund that is
19 attributable to caseload growth for services provided under this
20 chapter and under Sections 14132.95.and 14132.951. Nothing in -.
21 this subdivision shall authorize repayment to the state in any
22 year of more than the amount of caseload growth enumerated for
23 the county for in-home supportive services, personal care
24 services, or IHSS Plus waiver services, in the allocations
25 schedule developed annually by the Department of Finance in
26 consultation with the California State Association of Counties,
27 pursuant to subparagraph (A) ofparagraph (1) of subdivision (b)
28 of Section 17605.
29 SEC. 3. Section 12300.4 is added to the Welfare and
30 Institutions Code, to read:
31 12300.4. Any county that receives an allocation from the
32 Sales Tax Growth Account of the Local Revenue Fund may
33 repay its general fund from that allocation for any amount
34 previously expended by the county to make up a shortfall as a
35 result of caseload growth for services provided under this
36 chapter, which was not previously reimbursed from Sales Tax
37 Growth Account allocations.
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AB 2469 Assembly $ill - Bill Analysis Page 1 of 7
AB 2469
Page 1
Date of Hearing: April 25, 2006
ASSEMBLY COMMITTEE ON HUMAN SERVICES
Noreen Evans, Chair
AB 2469 (Evans) As Amended: April 19, 2006
SUBJECT In-home supportive services (IHSS) and personal care
services: funding.
SUMMARY This bill allows eligible counties to request advanced
payments from the Sales Tax Growth Account to fund IHSS program
expansion. Specifically, Ithis bill
1)Allows counties with a population of 250, 000 or fewer to make
a claim with the State Controller's Office (SCO) to receive
from the General Fund an amount equal to a county's share of
cost_ forIHSS services for either or both of the following:
a) A prior fiscal yeal for which the county is awaiting an
allocation from realignment revenues; or
b) The current fiscal year, from the county's anticipated
realignment revenue allocation.
2)Requires that counties that make this claim provide the state
with appropriate documentation in support of its claim.
3)Requires that the amount of the payment to the county
attributable to caseload growth be repaid to the state from
any future allocation due to the county from the Sales Tax
Growth Account of the Local Revenue Fund that is attributable
to caseload growth.
4) Prohibits any repayment to the state from exceeding the amount
of that county's IHSS caseload growth, as identified by the
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Department of Finance (DOE) and the California State
Association of Counties.
EXISTING LAW
1)Establishes the IHSS program to provide personal services and
home care for eligible poor aged, blind and disabled
individuals.
2)Requires every county to establish an employer of record for
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AB 2469 Assembly Bill - Bill Analysis Page 2 of 7
AB 2469
Page 2
IHSS providers for purposes of collective bargaining and
resolving disputes regarding wages, hours, and related terms
of employment.
3)Establishes the Local Revenue Fund, which includes Sales Tax
and Sales Tax Growth Accounts, and their associated
subaccounts.
FISCAL EFFECT Unknown. Possible General Fund pressures from
short-term loans to eligible counties, with subsequent repayment
from realignment accounts, resulting in no net General Fund
impacts.
COMMENTS During the 1991-1992 fiscal year, California faced a
budget deficit of $14 .3 billion. This budget crisis brought
into focus the difficulties local governments experienced
financing critical health, mental health, and social service
programs. This difficulty was the result of the dependence of
counties upon the state to access revenues, a condition that
other local governments did not face to the same degree. The
Governor and the Legislature concluded that the $14 .3 billion
deficit was too large a gap to close with tax increases or
budget cuts alone, and that a combination of the two was
necessary. Counties, the Administration, the Legislature, and
other interest groups negotiated a tax restructuring plan which
included increases to the vehicle license fee and a cent sales
tax increase. This plan -included a shift in some program
responsibilities, including state/county sharing ratios, in
exchange for that cent sales tax increase to go directly to
counties. This plan was called State/Local Program Realignment
(realignment) .
Under realignment, 19 health, mental health, and social service
programs, including the IHSS program, would be funded under a
newly-created Local Revenue Fund. This fund would be divided
into a number of accounts, including the Sales Tax Account and a
Sales Tax Growth Account. The Sales Tax Account was funded by
the revenues generated by the cent sales tax increase in the
1991-92 fiscal year. In each subsequent year, the same amount
of sales tax revenue is deposited into the Sales Tax Account,
which then serves as the "base" funding for the 19 realigned
programs. The amount of sales tax revenue in excess of the base
is deposited into the Sales Tax Growth Account. These excess
sales tax revenues are used, in part, to fund caseload growth in
the 19 realigned programs.
AB 2469
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AB 2469 Assembly Bill - Bill Analysis Page 3 of 7
Counties receive realignment money after a complex process of
caseload estimation and re iew occurs between DSS, Department of
Health Services (DHS) , Department of Finance (DOF) , ;and the
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California State Association of Counties (CSAC) . State law
requires that this review process must be completed, and a
caseload schedule submitted, to the SCO on or before March 15 of
each year . According to the DOF, this deadline has not been met
in the last five years. This review process is critical to the
successful implementation of realignment, but time-consuming.
The problem, according to the author, is that counties can
expect a 15- to 18-month delay in receiving these caseload
growth funds. Larger counties who wish to expand the IHSS
program by giving a raise to the IHSS workers, for example, can
do this because they can afford to "float" the increased costs
for 18 months, knowing that reimbursement will eventually come.
Smaller counties, however, cannot afford to wait those months
for reimbursement. The result, according to the author, is an
impairment in the state's ability to improve the IHSS program in
smaller counties. The author states that this bill will allow
smaller counties to receive their IHSS caseload growth money
sooner, should they choose, and a barrier to the improvement of
the IHSS program will be removed.
Eligible counties According to the most recent population
estimates of the US Census Bureau, 33 counties have a population
of 250, 000 or fewer. They are:
(Alpine (Glenn (Madera (Nevada (Tehama I
I I I IPlumas I I
IAmador (Humboldt (Mariposa I (Trinity I
I I I ISan Benito I I
(Butte [ Imperial (Mendocino IShasta (Tuolumne I
I I I I I I
ICalaveras [ Inyo IMerced ( Sierra IYolo I
I (Kings IModoc I I I
IColusa ]Lake I ISiskiyou (Yuba I
I I IMono I I I
IDel Norte [Lassen I ( Sutter I I
I I (Napa I I I
IE1 Dorado I I I I I
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AB 2469
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Previous legislation SB 64 (Ducheny) 2005 would have relieved
counties with populations of 250, 000 or fewer with 1.4 percent
or more of their population receiving IHSS services of the
county's share of cost for IHSS services. This bill died in
Senate Appropriations Committee. AB 2747 (Garcia) , :statutes of
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AB 2469 Assembly Bill - Bill Analysis Page 4 of 7
2004, required DOF to recommend to the Legislature 'a means for
expediting the payments to county social services realignment
accounts. Originally, AB 2747 addressed the same cash flow
problem that AB 2469 seeks to remedy. Its approach was similar
in that it required the SCO to deposit into the casieload
subaccount an estimated amount of money to fund IHSS caseload
growth, rather than allow counties to make a claim,' envisioned
by AB 2469.
DOF report In their report required by AB 2747, DOF
identified a number of barriers to the expedited flow of
realignment money to counties, and offered some
recommendations. The DOF noted that caseload data is reported
to them by DHS and DSS by late April or May, well past the
March 15 statutory deadline. Data submitted by DHS was also
reported to trail data submission by DSS by approximately four
to six months, due to DHSjs practice of using data from the
most current fiscal year in their caseload calculations. DOF
cites further review as causing further delay in the caseload
schedules being submitted to SCO. Finally, DOF reported that
caseload growth is unfunded by an estimated $275. 6 million
through the 2003, 2004 fiscal year. This is a result of sales
tax revenue growth being outpaced by program caseload growth.
The DOF offered two recommendations in their report. The first
recommendation was to change the statutory deadline from March
15 to a later, more realistic date. The second recommendation
was to conform DSS and DHS caseload estimation methodologies.
This would allow DOF to submit caseload schedules to SCO
several months earlier, according to DOF.
Arguments in support Supporters of this bill note that the
steady expansion and improvement of the IHSS program has come as
a result of improving wages and benefits offered to workers.
Some counties, it is noted have had difficulty in keeping up
with this trend, due to their small size and more constrained
operating budgets. These counties are unable to expand the IHSS
program due to the slowness in receiving reimbursements from the
state. Smaller counties cannot afford to wait for this
reimbursement, so they are reluctant to offer higher wages and
AB 2469
Page 5
benefits to IHSS workers.
Arguments in opposition: Opponents of this bill argue that AB
2469 sets a precedent of prioritizing one realigned program over
another, asserting that other important social service programs,
such as child welfare, adult protective services, and mental
health, would bear the cosi. Further, this legislation would
invite sirailar legislation, which could unravel the structure of
realignment. Opponents also advance the argument that, once a
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AB 2469 Assembly Bill - Bill Analysis Page 5 of 7
county elects to make a claim for an advance on funding, they
must continue to make such claims in perpetuity, since no county
would likely be able to endure a two year period to transition
back. Opponents assert that, since realignment money is
allocated as a block grant to the counties for all the realigned
programs, counties can spread any sales tax shortfall across all
programs. AB 2469, they believe, will spare IHSS from such
county budget reductions. Finally, opponents fear that the use
of the word "claim" in the bill may trigger a "poison pill",
making realignment inoperative should a California appellate
court find that any provision of realignment constitutes a state
mandated local program requiring state reimbursement in excess
of $1 million.
County prerogatives under AB 2469 Opponents claim that
counties will be locked into advanced realignment funding in
perpetuity, and that they will be unable to make necessary
budget cuts equitably. This bill is permissive in nature,
making it possible that no county will make use of its
provisions if that county does not believe it is to its
advantage to do so. Should a county choose to make a claim for
advance realignment money, there is no requirement that it use
that money on the IHSS program. In order to qualify for funds,
an eligible county need only show documentation that IHSS
caseload growth is expected, presumably as a result of a wage
increase negotiated by the county. Once a portion of their
expected realignment revenues are advanced, a county may elect
to direct those advanced funds toward IHSS, as the bill
suggests, or allot the money to other programs within the same
subaccount, or shift up to110% of this money across subaccounts,
as currently provided by statute. When the balance of
realignment money is allocated to counties, the county retains
the prerogative of allocating it among the different programs in
each subaccount, in a manner of its own choosing.
Precedent of changing realignment Opponents express the
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AB 2469
Page 6
concern that realignment, Ihich is a complex and sensitive
arrangement between state and county governments, could undergo
further change should this bill establish such a precedent.
Opponents further note that the concept of advanced payments was
considered by the DOF workgroup formed pursuant to AB 2747.
This workgroup concluded that advanced payments to counties
added complexity and workload to the existing realignment
process. While this may be true, it does not obviate the basic
policy question of whether or not realignment works effectively
to achieve public policy goals. The problem AB 2469 seeks to
remedy is an already cumbersome and complex realignment process
that causes unacceptable delay in the flow of money to counties.
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Technical amendments Opponents argue that the use of the word
"claim" may activate the state mandate poison pill. According
to CSAC, this particular provision of realignment was sponsored
by the Administration and strongly supported by both Senate and
Assembly Republicans as a strong disincentive to the Legislature
and interest groups from adding new mandates on local government
as a part of realignment. The author agrees to the amend the
bill as follows:
Page 2, line 18; Page 3, lines 4 through 6 inclusive, strike
"claim" and replace with "irequest".
REGISTERED SUPPORT / OPPOSITION
Support
Service Employees International Union (SEIU) (sponsor)
SESU Local 434B
American Federation of State County and Municipal Employees
(AFSCME)
California Alliance for Retired Americans (CARA)
California Association of Homes and Services for the Aging
(CAHSA)
Gray Panthers California
United Domestic Workers of American (UDW)
Opposition
California State Association of Counties (CSAC)
California Mental Health Directors Association
California Health Executives Association of California
AB 2469
Page 7
Sacramento County Board of Supervisors
Analysis Prepared by JohniBoisa / HUM. S. / (916) 319-2089
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