California Budget Bites

Helping seniors and people with disabilities remain at home is not only the right thing to do – who doesn’t want to live in their own home as long as possible? – it also makes good fiscal sense because it is much more costly to provide out-of-home care. California achieves this goal through the In-Home Supportive Services (IHSS) Program, which is expected to provide a range of services, including assistance with dressing, bathing, and medications, to a projected 476,000 low-income seniors and people with disabilities in 2010-11.

Two new CBP fact sheets released today document the impact, by county and by legislative district, of the Governor’s proposals to severely restrict eligibility for IHSS and potentially eliminate the program in 2010-11. Either proposal would cause well over 300,000 IHSS workers to lose their jobs, an alarming prospect when the state’s unemployment rate remains stubbornly above 12 percent. In addition, the Governor’s proposals would likely lead to new state costs for skilled nursing care and other services that “more than outweigh” the state savings from either reducing the caseload  by 87 percent or eliminating the program, according to the Legislative Analyst’s Office.

Whether you look at it from a moral or a fiscal perspective, the Governor’s IHSS proposals are a bad deal for California.

– Scott Graves and Raul Macias

A new CBP fact sheet released today documents the county-level impact of the Governor’s proposal to cap the state’s share of In-Home Supportive Services (IHSS) workers’ wages and benefits at $8.60 per hour. The CBP estimates that the Governor’s proposal could reduce total compensation for IHSS workers by nearly $1.2 billion between June 2010 and June 2011.

Nearly 370,000 IHSS workers help almost 450,000 low-income seniors and people with disabilities live safely in their own homes, thereby preventing more costly nursing home care. The state currently shares in combined IHSS wage and health benefit payments of up to $12.10 per hour with counties and the federal government. In February 2009, state lawmakers reduced this threshold by capping the amount at which the state would share in the cost of IHSS workers’ wages and benefits at $10.10 per hour – $9.50 per hour for wages and $0.60 per hour for health benefits. In June, however, a federal district court issued a preliminary injunction prohibiting the state from implementing this reduction. This injunction remains in effect while the case is on appeal.

Despite this ruling, the Governor has proposed to cap the state’s share of IHSS workers’ compensation at an even lower level – the state’s minimum wage of $8.00 per hour plus $0.60 per hour for benefits – effective June 1, 2010. Forty-five counties currently offer combined wages and health benefits that cost in excess of $8.60 per hour. While counties could continue to provide compensation above the proposed level, they would have to use their own dollars to make up for lost state funding – a dim prospect, given that counties continue to face their own budget pressures.

– Scott Graves