Special Edition:  

California State Budget Released

The governor released his proposed 2012-13 state budget on January 5th, five days ahead of schedule due to prematurely posted documents by the Dept. of Finance. The budget indicates the state faces a $9.2-billion deficit. Governor Brown's budget anticipates closing the current gap through a combination of spending cuts and the temporary tax increases he would like to see on the November ballot. His budget assumes the tax increases via an initiative on the November ballot passes.  

In the event the ballot measures fail, triggered cuts to schools, courts, public safety and higher education will become effective. Even if the proposed tax increases pass, the proposed budget reduces welfare by nearly $1 billion, in addition to other cuts.

The Legislature must approve the budget before it is final. There will be hearings and much debate on the proposals over the next few weeks.  In May, a revised budget will be released that will reflect more accurate revenue estimates. Speaker Pro-Tem Darrell Steinberg has stated that he does not want to deal with cuts until May in the hopes that the revenue stream will improve. However, the Governor wants many of the cuts to be become effective March 1st.

What does this mean for NAMI members:

• EPSDT to be Realigned (and the dollars sent to counties reduced)
• Department of Mental Health and Alcohol and Drug Programs move to the Department of Health Care Services
• Tax increase Initiative to ensure Realignment funding and avoid cuts in Education
• Prop 63 (MHSA Funding) forecast an increase in for 12-13
• $1.7 billion in Medi-Cal Funding (a significant decreased accomplished by shift to managed care)
• The establishment of a new Department of State Hospitals which proposes to cut $200 million in the 5 state hospitals budgets by eliminating 600 clinical staff and charging counties more for civil beds.

Governor's Budget- No Surprises

Balancing the Budget

Governor Brown released his proposed 2012-13 budget this afternoon. Complete details and a detailed summary are available at www.ebudget.ca.gov.

Building on what was proposed last year the budget will realign the EPSDT mental health MediCal program for children to counties meaning that counties will receive funds on a formula basis and not be able to make claims to the state for excess costs. We do not yet have the details on that formula. The rest of mental health programs have already been realigned and will be distributed based upon current formulas. The proposal includes separate subaccounts for each realigned program with the ability to transfer up to 10% of funds from one account to another. (just as the 1991 realignment did). 

Funding for the realigned programs would be constitutionally protected if voters approve an initiative that increases sales and income taxes. The realignment itself and the funds are not contingent upon passage of the initiative. 

The initiative would also avoid significant education cuts that would be triggered if the measure fails. There are no additional health related cuts that would be triggered. 

The budget has a few additional cuts in health and human services with the most significant for NAMI members being reduction in IHSS hours and elimination of IHSS domestic and related benefits for many beneficiaries. 

Major savings are projected by moving people with both MediCal and Medicare eligibility (dual eligible) into an integrated single managed care plan that will be phased in over three years with 8-10 counties projected to implement this in 12-13.

Restructuring Mental Health and Alcohol and Drug Governance

As proposed last year the Departments of Mental Health and Alcohol and Drug would be eliminated and nearly all of their functions transferred to the Department of Health Care Services. It does not rename that department to make mental health part of the name of the department as we had proposed. It also places community care facility licensing at the Department of Social Services. This would be problematic unless the state accepts our proposal to utilize a provision of state law that eliminates state licensing for county funded mental health programs operated by nonprofit contractors. The office of MultiCultural Services is proposed to be transferred to the Department of Public Health. Contracts with consumer and family organizations are transferred to the Mental Health Services Oversight and Accountability Commission.  MHSA Education and Training programs are transferred to the Office of Statewide Health Planning and Development which administers programs in other areas of workforce development. To make these changes requires a complex piece of legislation and it is expected that it will change significantly as legislators weigh in and we will continue to press the points in our position paper prepared in October.

Proposition 63/Mental Health Services Act Revenues

The best news in the Governor's budget proposal is in the revenue projections for the Mental Health Services Act/Proposition 63 tax on millionaires.  The budget documents calculate the revenues from 2010-11 as $1.02 Billion, estimates that for the current 11-12 year they will be $1.15 Billion and projects a dramatic increase to $1.47 Billion for 12-13. Besides the projected increase from 11-12 to 12-13 the calculation for 10-11 and the estimate for 12-13 are also much higher than the Governor's budget calculated one year ago and which were the basis for funding distributions to counties for 11-12. In January 2011 the estimates for 10-11 were $891 million and the projections for 11-12 were $924 million. The new calculations reflect increases of $130 million for 2010-11 and $220 million for 11-12.

Because there are delays in when increases and decreases in MHSA funds are reflected in allocations to counties these increases do not determine how much the funds for counties for 2012-13 will be increased above 11-12. However, this is very positive news and when those allocations are calculated this spring these increased projections will be accounted for to determine the amounts available for allocations to counties for MHSA programs- mainly community services and supports and prevention and education.