New Tax to move CA Regional Centers Toward Sustainability!!!!

After years of battles to increase Regional Center Funding to insure that CA families and consumers continue to receive quality services -  and staving off collapse of this critical entitlement system -  it seems a solution to increasing funding is almost a reality!

~ FYI ~

     Within the next few days, it is likely the Legislature will consider, and vote upon, increased funding for developmental services. A final dollar value is not yet known, nor are the precise details of the funding mechanism. This highly fluid situation is being monitored with the closest of attention, and as matters develop, you will be kept closely informed.  

The MCO Tax

     After intensive and top-level negotiations, a Managed Care Organization (MCO) tax was finalized and introduced in the Legislature yesterday, in the Second Extraordinary Session (or “X2”). Presented simultaneously as SBX2 15 (Hernandez) and ABX2 20 (Bonta), those identical bills create a tiered MCO tax to replace the current MCO tax. It would be mostly revenue-neutral, and have a minimal impact on health plans. These twin bills speak only to the way funds are obtained, not how they will be spent.

Lanterman Coalition Position

    The Lanterman Coalition collectively agreed that their fundamental position was a 10% across-the-board increase (estimated at $390M General Fund), coupled with funding reform to secure the system’s long-term sustainability, was the ideal way to rebuild. The Administration noted that, but requested the Coalition develop targeted increases. After careful review, the Coalition identified wages and benefits as a targeted “cost component,” that should benefit from a 10% increase. That target, with flexible implementation, was agreed upon as the most effective way to make an immediate impact. Funding reform, of course, remained as a key part of the Coalition’s long-term goal.

  The Coalition revised their position to a 7.5% funding increase for POS and OPS salaries and benefits, a 2.5% increase for POS and OPS non salary and benefit related administrative costs, and a 10% restoration (to 2006 levels) of supported employment rates. Additionally, the Coalition is requesting the long-sought reform of vendor audits and a commitment to adopt a process for service providers and regional centers to be reimbursed for unfunded mandates due to federal, state and local government action. This would be similar to existing mechanisms used by local governments. This proposal is in addition to the Administration’s proposal to fund: 5% salaries and benefits for POS direct service professionals, 5% salaries and benefits for RC service coordinators, 5% increase for SLS, ILS, in and out of home respite, transportation and ICFs and $30 million for interns and bonuses for competitive integrated employment.  The 5% salaries and benefits proposals would offset the 7.5% LC proposal.

Hearings This Week

  To address these bills, the Senate and Assembly X2 policy committees will be meeting tomorrow, Wednesday the 10^th, to hear the just-drafted MCO tax proposal. Once they have been heard, the X2 Conference Committee will be meeting, no sooner than Wednesday evening, to discuss the two placeholder bills that have been awaiting action for some months. Viewing information and outcomes will be provided in the usual fashion.

     The MCO tax bill will only focus on obtaining money. How it is spent, including for developmental services, will most likely be addressed in those placeholder bills. Thus, the fundamental question of how much money will be provided to our community, and how it will be allocated, remains open and very actively discussed. ARCA remains committed to maximizing the reinvestment in our community, as well as seeing a long-term sustainability plan for the developmental services system.