BILL ANALYSIS
Senate Appropriations Committee Fiscal Summary
Senator Tom Torlakson, Chairman
100 (Ducheny)
Hearing Date: 7/2/07 Amended: 6/25/07
Consultants: John Miller, Bob Franzoia, Policy Vote: N/A
Miriam Barcellona Ingenito, Nora Lynn
_________________________________________________________________
____
BILL SUMMARY:
SB 100, an urgency measure, would appropriate $140.547 million
from the General Fund and $423,000 from non-governmental funds
(Inmate Welfare Fund) for 2006-07 budget deficiencies related to
caseload growth at the Department of Mental Health (DMH) and the
Department of Developmental Services (DDS); increased
reimbursements and claims to the Office of Emergency Services
(OES); salary enhancements at the Department of Corrections and
Rehabilitation (CDCR) for specified personnel pursuant to a
court settlement; inmate population increases at CDCR; increased
costs at the Department of Forestry and Fire Protection (DFFP)
related to employee retirement; increased costs to the
Department of Drug and Alcohol Programs (DADP) associated with
Drug Medi-Cal services; and increased salary costs to the
Department of Mental Health (DMH) resulting from providing
salary parity to its clinicians located at specified prisons.
_________________________________________________________________
____
Fiscal Impact (in thousands)
Major Provisions 2006-07 2007-08 2008-9 Fund
Appropriation $17,685 General
Appropriation $6,538 General
Appropriation $515 General
Appropriation $5,195 General
Appropriation $28,708 General
Appropriation $2,584 General
Appropriation $59,727 General
Appropriation $4,313 General
Appropriation $15,282 General
Appropriation $423 Special*
_____
* Nongovernmental cost funds (Inmate Welfare Fund)
_________________________________________________________________
___
STAFF COMMENTS: This bill meets the criteria for referral to the
Suspense File; however, the Department of Finance has determined
that additional funding is needed for these departments'
operations during the 2006-07 fiscal year.
The 2006-07 Budget Act includes $50 million for contingencies
and emergencies. SB 100, the second of two supplemental
appropriations bills sponsored by the Department of Finance,
would provide a $140,970,000 augmentation in funding for
unanticipated shortfalls in existing programs as specified:
-- 1 --
SB 100 (Ducheny)
Page 2
DMH: caseload growth in the Early and Periodic Screening,
Diagnosis and Treatment Program
The Early and Periodic Screening, Diagnosis and Treatment
Program (EPSDT) is a federally mandated program which provides
medical and mental health testing and diagnostic and treatment
services for children and adolescents. In November of 2006 the
Department of Finance notified the Legislature that the program
had a deficiency of $243 million in General Funds for prior year
claims of 2003-04, 2004-5 and 2005-06 and a current year
deficiency of $58.3 million. The prior year's deficiency was
attributed to inaccurate forecasting of costs and, principally,
to differences in accounting methodology. The Joint Legislative
Budget Committee expressed concern that the inaccurate
forecasting and incompatible accounting were not discovered for
two fiscal years, and sought to resolve the shortfall within the
budget process. Subsequently, during the 2007 budget review, the
Legislature approved an appropriation of the $243 million and an
additional $17.2 million for past years which was to be divided
into three payments over a three year period. The first payment
of $86.7 million is appropriated in the current year budget. The
Committee further approved inclusion of the current year
deficiency of $59.7 in the supplemental appropriation process
which is included in this measure.
DDS: caseload growth and the increase in the minimum wage
affecting the Purchase of Services component of the Community
Services Program.
The Lanterman Developmental Disabilities Services Act entitles
disabled consumers to services and supporters that should lead
to more independent lives. These services are provided through
21 regional centers which identify and implement each consumer's
individual program plan. The Department has requested a General
Fund augmentation to fund deficiencies in the Purchase of
Services (POS) portion of the Community Services program. The
deficiency results from two unanticipated adjustments: an
increase of $18,340,000 resulting from the minimum wage
effective January 1, 2007, and an increase of $10,368,000
resulting from updated POS service utilization and increased
caseload projections.
The increase in the minimum wage from $6.75 to $7.50 per hour
affects entry-level staff who provide services in community care
facilities, day and work activity programs, respite care and
supported living. These costs were not included in the Budget
Act provisions for wage increases.
The Department of Developmental Disabilities bases their
November and May budget projections on prior years actual
expenditures. However, the department discovered fourth quarter
increases were inconsistent with earlier projections and
increased their projected costs by $33,432,000 in January. These
increased costs were based on increases in the number and costs
of services provided to consumers who proved older, more fragile
and increasingly autistic. This reduction was subsequently
revised and reduced by $13,422,000 through operational savings,
reduced POS utilization, and a fund shift to federal
reimbursements of $9,642,000. The Department has contracted
SB 100 (Ducheny)
Page 3
with a consultant to determine the cause of the unusual
expenditure trends and assess programmatic effects over the last
several years as well as providing a re-assessment of the
permanent and temporary cost containment measures initiated in
2003-04. The growth of costs in Regional Centers has been
dramatic in recent years - having increased 34% in only the last
three years. This substantial cost expansion and the failure of
cost control efforts by the Department have generated
controversy on this issue.
OES: local assistance disaster reimbursements
The bill would appropriate $17,685,000 for the following
disasters:
1994 Northridge earthquake $7,000,000
1995 Winter storms and 1995 late winter storms $32,000
San Simeon earthquake $600,000
January 2005 Winter storms $4,000,000
2005/2006 Winter storms $5,700,000
CDAA only $417,000*
Total $17,685,000
* CDAA
San Bernardino fire (Sawtooth) $115,000
Trinity levee erosion $79,000
Trinity fire (Junction) $107,000
Ventura fire (Day) $40,000
Riverside fire (Esperanza) $10,000
Trinity fire (Pigeon) $36,000
Siskiyou winter storms $30,000
Total $417,000
CDCR: Perez
Filed in 2005, Perez contends that CDCR provides its inmates
with inadequate dental care. The lawsuit was filed concurrently
with a settlement agreement between the plaintiffs and the state
that requires the state to phase in new policies and procedures
to improve the quality and access to dental care for inmates
over a six-year period (LAO Analysis of the 2007-08 Budget
Bill).
The Governor's 2007-08 Budget as proposed in January included
$18.8 million in current-year funding for salary enhancements in
anticipation of the Perez court issuing court orders. Since that
time, the Department of Personnel Administration has negotiated
with the affected bargaining units based on court experts'
recommendations, thereby avoided the issuance of an order for
the wage increases.
Salary enhancements proposed to be funded through SB 100 are
conditioned upon approval of two memoranda of understanding (AB
754 and AB 756) and would be retroactive to April 1. SB 100
would fund $16.115 million in dental salary increases --
SB 100 (Ducheny)
Page 4
$11.115 million for the Division of Adult Operations and
$500,000 for the Division of Juvenile Operations.
CDCR: population
In late January CDCR submitted a request to the Department of
Finance for a $9.6 million General Fund funding increase for the
current year based on revised fall caseload and population
projections, the need to contract for out-of-state beds, and
increased health-care related costs, particularly for mental
health care. In May the department requested an additional $14.6
million General Fund and $423,000 Inmate Welfare Fund, for a
total, less some offsetting savings, of approximately $24.2
million.
During the Conference Committee process, however, CDCR has been
able to provide more updated information, and the department's
General Fund deficiency related to population has been reduced
for the current year to $7.9 million, the amount reflected in SB
100. These reductions are the result of revised projections for
out-of state transfers and the department's having addressed its
use of outdated data in calculating mental health population.
CDFFP: retirement buy-out
SB 100 appropriates $6.538 million from the General Fund to
cover the costs associated with higher than normal retirements
in the California Department of Forestry and Fire Protection
(CDFFP). Staff notes that a similar deficiency request was
submitted to the Legislature and approved last year. CDFFP has
anticipated a total of 194 retirements for the 2006-2007 fiscal
year, which is almost the same number of retirements as
requested in last- year's deficiency request. The demographic
of the department is known and CDFFP should be able to better
estimate its retirement costs and submit funding requests
through the normal budget process.
According to CDFFP, the average retiring employee has 847 hours
of vacation or annual leave, 32 hours of compensated time off,
and 197 of personal leave program (PLP) hours, 10 hours of PARR,
and 5 hours of excess hours. (PLP relates to two separate
instances where the state employees had their take home pay
reduced but received additional leave credits in an effort to
balance the state budget. Excess hours apply to employees
working an alternative work schedule. PARR time relates to a
lawsuit filed many years ago, where partiers where granted hours
accrued.) This deficiency request assumes only 640 hours of
vacation or annual leave plus all of the other averages for
leave balances. It is unclear how CDFFP will fund the
additional 207 hours of vacation or annual leave that the
average retiring employee would be entitled to.
Under existing law, departments are required to pay employees,
in lump sum, the balances owed to them within 72 hours of the
separation date. Of the $6.538 million, SB 100 schedules
$131,000 is for retirements in the Office of the State Fire
Marshal, $6.015 million is for retirements associated with fire
protection, and $392,000 for non-safety retirements working in
the resource management. Staff notes that this schedule is
incorrect. According to CDFFP, and confirmed by the Department
of Finance (DOF),
SB 100 (Ducheny)
Page 5
$35,000 should be for retirements in the Office of the State
Fire Marshal, $6.392 million for fire protection positions, and
$111,000 for resource management positions. Preliminarily, DOF
has indicated it would address this issue pursuant to Control
Section 26.0 which allows for the transfer of funds between
schedules. Control Section 26.0 states that "any transfer in
excess of $200,000 may be authorized pursuant to this section
not sooner than 30 days after notification in writing of the
necessity therefor is provided to the chairpersons of the
committees in each house of the Legislature that consider
appropriations and the Chairperson of the Joint Legislative
Budget Committee, or not sooner than whatever lesser time the
Chairperson of the Joint Legislative Budget Committee, or his or
her designee, may in each instance determine."
DADP: increase in the costs of Drug Medi-Cal services
The supplemental appropriation for the drug and alcohol programs
results from unanticipated utilization and caseload growth in
the Drug Medi-Cal Program, specifically in the outpatient,
perinatal residential and day care rehabilitation programs.
DMH: Coleman
Filed in 1992, the Coleman case alleged that the Department of
Corrections (CDCR) failed to provide constitutionally adequate
psychiatric care for inmates. A federal court found the state to
be in violation of federal constitutional standards for inmate
medical care and appointed a special master in 1995 to monitor
efforts by the state to remedy cited problems (Legislative
Analyst's Office, Analysis of the 2007-08 Budget Bill).
In November of last year, the Coleman special master recommended
salary increases for CDCR mental health clinicians and
supervisors. In conjunction with CDCR, DMH staffs psychiatric
treatment programs at the California Medical Facility-Vacaville
and Salinas Valley State Prison. Compensation increases for CDCR
mental health program staff at these facilities posed a salary
disparity for DMH clinicians in similar staffing
classifications.
DMH is requesting $2.584 million in SB 100 to fund current-year
parity salary increases for its staff at the psychiatric
programs at Salinas Valley and Vacaville.
CDCR: Inmate Welfare Funds
An additional $423,000 in Inmate Welfare Funds are needed as a
result of a shift in population between bed types - more inmates
than projected are being held in state facilities than in
contract beds facilities , thereby changing the number who are
eligible to receive canteen services and increasing those costs
proportionally.