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FY2012-13 Budget Proposal Includes Steep HHS Cuts

The governor’s budget proposal was released earlier today ahead of schedule. Unsurprisingly, this year’s budget proposal is a continuation of a years-long trend that cuts deeply into critical HHS programs. Despite the state’s improving fiscal condition, slow economic growth and lower-than-anticipated General Fund revenues were cited as reasons for the following major cuts and adjustments:

  • Total expenditure reductions in HHS programs:
    • Medi-Cal: $842.2 million
    • In-Home Supportive Services: $163.8 million
    • Other HHs programs: $86.9 million
  • General Fund reductions in HHS programs: $254 million
  • Enroll Medi-Cal dual eligibles into managed care and incorporate In-Home Supportive Services (IHSS) as managed care benefits over 3 years; eliminate domestic IHSS services to those in shared living arrangements
  • Rate reduction for Healthy Families managed care by 25.7%
  • Eliminate the Managed Risk Medical Insurance Board (MRMIB), with DHCS assuming most of its responsibilities, including Healthy Families (October 2012), AIM, MRMIP and PCIP (July 1, 2013)
  • Eliminate the Department of Mental Health and the Department of Alcohol and Drug Programs, with DHCS assuming most of its responsibilities

This proposal presumes a the passage of a temporary 0.5% sales tax increase, as well as an increase in personal income tax on high-income taxpayers. Significant trigger cuts will take effect in the event that it does not pass and General Fund revenues fail to meet expectations; none of these cuts, however, will directly affect HHS programs/departments.

The budget is available online.

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