BILL ANALYSIS Ó SB 72 Page 1 SENATE THIRD READING SB 72 (Budget and Fiscal Review Committee) As Amended March 14, 2011 2/3 vote. Urgency SENATE VOTE :Vote not relevant SUMMARY : Makes statutory changes necessary to implement Human Services-related portions of the 2011-12 Budget. Specifically, this bill : 1)Delays, for one additional year, to July 1, 2012, implementation of provisions enacted by AB 2488 (Leno), Chapter 386, Statutes of 2006 related to disclosure of personal information between adoptees and their biological siblings. Declares intent for implementation to continue in the interim to the extent possible. 2)Suspends, for one year, the county share of child support funds that are recovered by the government in cases where the custodial family has received cash assistance. Those funds will instead be retained by the state. This change results in $24 million General Fund (GF) savings in the 2011-12 fiscal year. 3)Makes various changes to the California Work Opportunities and Responsibility to Kids (CalWORKs) Program as follows: a) Effective June 1, 2011 or 90 days after enactment of this legislation, whichever is later, reduces the number of months parents or caregiver relatives can receive aid from 60 to 48. This change is anticipated to result in $156 million ongoing, annual GF savings. Also makes related changes, including deletion of self-sufficiency reviews and revised time limit and sanction policies that would otherwise take effect on July 1, 2011 as enacted by AB 8 X4 (Evans), Chapter 8, Statutes of 2009-10 Fourth Extraordinary Session; b) Effective June 1, 2011 or 90 days after enactment of this legislation, whichever is later, reduces the Maximum Aid Payment in effect on July 1, 2009 by an additional 8%. As a result, maximum grants for a family of three in a high-cost county would be lowered from $694 to $638 per SB 72 Page 2 month. This change is anticipated to result in $304 million ongoing, annual GF savings; c) Effective June 1, 2011 or 90 days after enactment of this legislation, whichever is later, further reduces, by 5% increments (for a maximum total reduction of 15%), grants for children in cases without an aided adult who have received assistance for more than 60, 72, and 84 months, respectively. This change is anticipated to result in $100 million ongoing, annual GF savings; d) Lowers funding for these purposes in the counties' "single allocation" by $427 million GF in the 2011-12 fiscal year. Correspondingly, extends and expands upon exemptions from welfare-to-work requirements for parents of very young children (i.e., one child up to the age of 35 months or two children under the age of six years). Also grants counties flexibility to redirect between and among specified funding for employment assistance, substance abuse treatment, or mental health services during that same year; e) Suspends for one year the case management services and sanctions otherwise available under the CalLearn program for pregnant and parenting teenagers. These teenagers would instead be eligible for regular welfare-to-work services that are available in their counties. They would also continue to be eligible for supplements or bonuses related to progress in school, as specified. These changes are anticipated to result in $45 million GF savings in the 2011-12 fiscal year; f) Amends the state's current policy of disregarding the first $225 of earned income and 50% of each dollar earned beyond $225 when calculating a family's monthly grant. Instead disregards the first $112 of earned income and then 50% of all other relevant earnings. As a result, some families who currently have qualifying earnings would have their grants reduced. This change is anticipated to result in $95 million ongoing, annual GF savings; g) Makes cost-neutral changes to expand the state's participation in an existing subsidized employment program and align the program more closely with operation of a SB 72 Page 3 related program that existed under the federal American Recovery and Reinvestment Act of 2009's (Public Law 111-5) Emergency Contingency Fund. As a result, the state would participate in half of the costs of the subsidized employment participant's wages, up to the amount that the state would instead have paid for the family's assistance grant; and, h) Delays to April 1, 2014 (from April 1, 2013), the date by which the Work Incentive Nutritional Supplement (WINS) program shall be fully implemented. Delays to October 1, 2014 (from October 1, 2011), the date by which the Temporary Assistance Program (TAP) must begin. Further, delays statewide implementation of a CalWORKs county peer review process to no later than July 1, 2014. 1)Makes various changes to In-Home Supportive Services (IHSS) as follows: a) Requires applicants for and recipients of IHSS to obtain certification from a licensed health care professional, as specified, declaring that the applicant or recipient is unable to perform one or more activities of daily living independently, and that without one or more IHSS services, the applicant or recipient is at risk of placement in out-of-home care. This change is anticipated to result in $120 million ongoing, annual GF savings; b) Requires the Department of Health Care Services to assess and determine whether it would be cost-efficient for the state to exercise the Community First Choice Option made available under section 1915(k) of the federal Social Security Act (42 U.S.C. Sec. 1396n(k)). This new state plan option becomes available October 1, 2011. States that take up the option receive a six percentage point increase in federal matching payments for costs associated with the covered home and community-based services programs. This change is anticipated to result in $128 million ongoing, annual GF savings; and, c) Authorizes counties to establish IHSS Advisory Committees that submit recommendations to the county board of supervisors on the preferred mode or modes of service to be utilized in the county. Under existing law, these SB 72 Page 4 Advisory Committees are instead required. This change is anticipated to result in $1.4 million ongoing, annual GF savings. 1)Makes various changes to the Medication Dispensing Pilot Project & Related Triggers as follows: a) Requires the Department of Health Care Services (DHCS) to identify individuals who receive Medi-Cal benefits on a fee-for-service basis and who are at high risk of not taking their medications as prescribed. To the extent necessary, also requires the DHCS to procure automated medication dispensing machines to be installed in participants' homes and monitored as indicated. Further requires the DHCS to report on and evaluate the pilot project. Also allows the DHCS to terminate the pilot project under specified circumstances. These changes are anticipated to result in $140 million ongoing, annual GF savings; and, b) If the Department of Finance determines that data reported regarding the pilot project does not demonstrate the ability to achieve annualized net savings of $140 million GF (after offsetting administrative costs), the director shall notify the Legislature by April 10, 2012, and request the passage of legislation by July 1, 2012 that provides alternative options for achieving any additional savings needed to reach this target. If the pilot and any subsequent legislation requested by the Department of Finance are not anticipated to result in $140 million annualized GF savings, requires the Department of Social Services to implement an across-the-board reduction in IHSS services beginning October 1, 2012, with specified exceptions. 1)Includes costs associated with the Long-Term Care Ombudsman Program among the authorized uses of funds in the State Health Facilities Citation Penalties Account. 2)Effective June 1, 2011 or 90 days after enactment of this legislation, whichever is later, reduces to the minimum amount required by federal maintenance of effort requirements, as specified, the State Supplementary Payment (SSP) portion of grants for individuals. As a result, the maximum combined SB 72 Page 5 Supplemental Security Income (SSI)/SSP grant for most individuals would be reduced from $845 to $830. This change is anticipated to result in $177 million ongoing, annual GF savings. 3)Adds an urgency clause allowing this bill to take effect immediately upon enactment. FISCAL EFFECT : Makes statutory changes to achieve a total of over $1.7 billion in savings assumed in the 2011-12 Budget Act. Analysis Prepared by : Nicole Vazquez / BUDGET / (916) 319-2099 FN: 0000056