In late December, Governor Brown announced that there would be automatic mid-year cuts to many state-funded programs. Among those cuts is $100 million from the Department of Developmental Services (DDS), which funds regional center services. Fortunately, DDS has indicated that this cut will probably not impose new hardships on the community because the savings that have been achieved this fiscal year have been higher than expected. However, the situation for the coming fiscal year is more concerning.

While the Governor’s budget proposal for fiscal 2012-2013 – released in early January – does actually increase the developmental services budget to cover new consumers who are expected to become eligible for regional center services, it also assumes that the $100 million mid-year cut will be carried over. That translates into a reduction of $200 million for the full year. Since some of the current year’s reductions were achieved with “one time” savings, DDS will need to come up with ideas for ensuring that the $200 million cost reduction is reached.

There was some good news for service providers: the Governor’s proposal does not call for extending the 4.25% cut in payments to service providers that is set to expire on June 30, 2012. However, it is possible that extending all or part of that cut could be among the proposals in DDS’ plan to meet the $200 million cost reduction target. To help in developing its plan, DDS will host six work group meetings across the state in February and March to gain stakeholder input and ideas for cost savings.

It is also important to note that while the Governor’s plan is “balanced” – meaning that the amount he intends to spend equals the amount of money he expects the state to receive – it does depend on the voters agreeing to around $7 billion in new taxes. This would include raising taxes on high-income Californians and a one-half percent increase in the state's sales tax.

The next step in the process is for the Assembly and State Senate to review and analyze the Governor’s plan and also propose their own ideas. It will probably not be until April or May before we know more about what the next year’s budget might contain, but please check back regularly since RCOC will follow the situation closely and post information about key developments as they happen.