Detailed spending proposals for the coming fiscal year prepared by officials at the state’s three top health agencies outline how Gov. Sam Brownback’s administration is planning to cap or cut spending on a broad range of health-related programs.
The governor’s formal budget recommendations for fiscal year 2014, which begins July 1, 2013, won’t be delivered to the Legislature until January when its new session begins. But agency chiefs were told as early as August by the governor to keep spending in check and to present alternatives for cutting 10 percent from each department’s upcoming state general fund budget.
The documents presented by the Kansas Department of Health and Environment, the Kansas Department for Children and Families, and the Kansas Department for Aging and Disability Services to the state budget office as part of the governor’s budget building process were obtained by KHI News Service and are made available here.
Administration officials declined to answer questions about their spending plans.
“We will not comment on the budget proposal at this time,” said Angela de Rocha, spokesperson for the Kansas Department for Aging and Disability Services and the Kansas Department for Children and Families.
Fading state aid
But there is abundant comment contained in the budget documents themselves and representatives of many, if not all, the organizations and programs that rely upon state health dollars have been advised informally within the past couple of weeks by administration officials of the planned spending limits and possible cuts. However, none of the representatives interviewed by KHI News Service had been given the full details laid out in the documents.
“We actually had a meeting with the secretary (Shawn Sullivan of the Kansas Department for Aging and Disability Services) but he didn’t give us any numbers,” said Cindy Luxem, chief executive of the Kansas Health Care Association, which represents for-profit nursing homes and some of the state’s providers of home and community-based services for the elderly.
“The providers at this stage of the game are not getting any kind of bump in the rates (for Medicaid services). The intention of the state is to keep the rates flat, essentially for the next two years, is what he told us,” she said.
Michelle Ponce, executive director of the Kansas Association of Local Health Departments, said she was alerted that the “reduced resources” budget proposed by the Kansas Department of Health and Environment could mean a cut in state aid to the local health agencies.
If adopted as outlined in the agency’s budget plan, 40 local health departments would see their state grants cut with the biggest decreases falling on the state’s largest local agencies.
“It’s maybe too early to tell you exactly what it would all mean,” Ponce said. “But it is unlikely all those agencies could absorb those cuts and maintain current services.”
Ponce said state support for local public health agencies hadn’t increased in years despite the added costs of inflation so any cuts would fall all the harder on the departments. She said association research had showed that since at least 1984, local governments have been stuck with absorbing the growing costs of health department programs as state aid has faded.<a name="continued"></a>
Health and Environment
Throughout the budget documents, officials note the need to hold down spending, though sometimes the notes are accompanied by caveats that seem to argue against some of the possible reductions.
Proposed FY14 budget: Department of Health and Environment
At KDHE, officials said “that in recognition of the reality we find ourselves in as a state agency in the current budget environment, the (agency) will not be asking for budget enhancements” in fiscal 2014.
In fact, agency officials proposed total state general fund spending of about $1 million less than for fiscal 2013. About 80 percent of the agency’s $2.6 billion annual budget comes from fees, grants or federal aid as opposed to state tax dollars.
As part of the agency’s “reduced resources” options for cutting 10 percent from the state general fund portion of its budget, officials said they would trim administrative costs by almost 34 percent as a way to forestall more cuts to direct services.
Among the agency-absorbed cuts would be the loss of five positions at the agency’s information technology office.
But even at that, KDHE officials said, they were forced to also suggest cuts in programs for primary care and aid to local health departments because it was “impractical to reach” a 10 percent cut “without either including these programs or defunding a number of programs that require the (state) funding they receive for match against federal funds.”
Among other cuts recommended in order to meet the 10 percent mark:
• Reducing state aid to safety net clinics by about $634,000.
• Cutting two people from the state’s animal feedlot waste management program, one in Salina and another in Dodge City.
At first glance, the state would seem to be in better fiscal condition than it has been since the onset of the 2008 recession. Officials currently anticipate cash reserves of about $470 million when the current fiscal year ends on June 30, 2013, though that could change with new revenue projections due this week and then again in April.
But tax cuts signed into law earlier this year will begin to kick in on Jan. 1 and over the next 18 months they are expected to reduce by $1 billion the amount the state would take in to help pay for its expenses in the second half of fiscal 2013 and all of fiscal 2014.
Children and Families
The Kansas Department for Children and Families told the governor's budget office that it could cut the state-funded portion of its budget by 10 percent by not replacing workers who quit or retire, cutting support for early childhood programs, and by helping fewer parents pay their childcare bills.
Proposed FY14 budget: Department for Children and Families
In a cover letter attached to DCF’s plan, Secretary Phyllis Gilmore, noted that she would not be asking for additional funding in the second half of the current fiscal year or in fiscal 2014.
She assured the governor that if “our allocation (for fiscal 2014) is reduced,” DCF still would be able to fulfill its mission of protecting children, promoting healthy families, and encouraging personal responsibility.”
Paul Johnson, a long-time advocate for the poor and a former lobbyist for the Kansas Catholic Conference, said Gilmore’s assurances were misleading.
“Kansas has been dealing with some of the highest unemployment in the last 40 years and yet the department’s public assistance reports show a 31 percent decline in the number of people on TANF (Temporary Assistance for Needy Families) between July of 2011 and September of 2012,” Johnson said. “At a time when families are struggling and those numbers should be going up — they’re going down.”
In its proposed budget, DCF attributes the decline to “a slight improvement in the labor market” and to an October 2011 decision to limit families’ TANF eligibility to 48 months. Previously, it had been 60 months.
According to the DCF reports, 31,730 families received TANF benefits — almost $111 per person per month — in fiscal 2012.
The current fiscal year is expected to end with 24,775 families on the program.
In DCF’s proposed budget for fiscal 2014, TANF spending would stay steady at $33 million.
“When you look at what DCF is proposing, you have to look back and realize that we’re serving a lot fewer families than we were a year ago,” Johnson said. “Thousands of people have been taken off the TANF rolls — that’s the starting point for this budget.”
DCF also has proposed:
• Allowing 94 positions within the agency to either remain vacant or not be filled when employees retire, quit or are dismissed.
• Requiring parents who receive childcare assistance to work 30 hours a week instead 20.
“What this means is that now, if you’re a single mom and you have a part-time job and let’s say you’re working on your GED or you’re taking a class at a technical college, you’re eligible for child-care assistance as long as you’re working 20 hours,” said Leadell Ediger, executive director at Child Care Aware, a nonprofit organization that helps low- and modest-income families find child care.
“If that work requirement goes to 30 hours a week, a lot of people won’t be able to meet it because their employers won’t be in a position to give them more hours,” Ediger said. “If you’re waitressing 20 hours a week now — that doesn’t mean your boss is going to let you work 30 hours a week.”
Increasing the work requirement, she predicted, would result in hundreds of parents losing their assistance, dropping out of school, and turning to low-quality childcare.
“This will be a lose-lose for children,” Ediger said.
In its proposal, DCF projected that about 1,900 of the 8,800 families currently receiving child-care assistance would leave the program and not return, saving the state $4.8 million (or $7.9 million, counting federal funds).
“This just makes it more difficult for working families to access quality childcare,” said Shannon Cotsoradis, executive director with Kansas Action for Children, an advocacy group.
The DCF budget plan also referenced using $15 million from the State General Fund to partially offset the likely loss of $18.1 million in early childhood block grant funding currently underwritten with dollars the state gets as part of the tobacco master settlement agreement.
Kansas Attorney General Derek Schmidt has advised the Kansas Children’s Cabinet to expect a major reduction in the settlement revenues in 2013 or 2014.
DCF’s proposal calls for reducing the $15 million SGF allocation to $13.5 million.
Aging and Disabilities
The Kansas Department for Aging and Disability Services was the only one of the three agencies that proposed any increase in state general fund program spending for fiscal 2014.
Officials recommended an additional $5 million for services for the developmentally disabled with half that amount reserved for rate increases for service providers to be targeted to direct care workers. The other half would be used to reduce the waiting list for services.
Proposed FY14 budget: Department for Aging and Disability Services
According to the budget document, there were 2,796 people awaiting the services as of Aug. 8.
The agency proposed no additional spending to reduce the waiting list for services for the physically disabled. Officials on Monday said there were about 2,200 people on that waiting list.
KDADS officials also recommended that the Legislature extend the nursing home provider tax, which is slated to sunset in fiscal 2014. Proceeds from the tax are used to leverage additional federal aid and then the money raised from it is funneled back to the nursing homes to pay for Medicaid services. The tax has raised about $30.2 million a year for the homes. It was enacted in 2010.
In order to meet a 10 percent reduction, the agency, among other things, proposed cutting $3.25 million from the program that provides home- and community-services for the frail elderly. Officials said that cut could be made “without affecting services or establishing a waiting list,” thanks to savings realized from a new financial management system and service standardizations.
Officials also proposed eliminating about $882,000 from Senior Care Act programs, which they said would “re-establish a waiting list for services.”
Another $1.1 million in savings were from salary reductions after the agency was reorganized this year.
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