January 11, 2019

On January 10, the Department of Finance released the long-anticipated Senate Bill 90: 1991 Realignment Report, which is the required In-Home Supportive Services (IHSS) Reopener Report. In the 2017-18 budget trailer bill SB 90 (Chapter 25, Statutes of 2017) that established the new IHSS maintenance of effort (MOE), CSAC advocated for a provision that required the Department of Finance to reexamine the IHSS fiscal structure during the development of the 2019-20 budget. Specifically, the Department of Finance was required to submit findings and recommendations to the Legislature by January 10, 2019 on four specific elements:

1. The extent to which revenues available for 1991 Realignment are sufficient to meet program costs that were realigned.
2. Whether the IHSS program and administrative costs are growing by a rate that is higher, lower, or approximately the same as the MOE, including the inflation factor.
3. The fiscal and programmatic impacts of the IHSS MOE on the funding available for the Health Subaccount, the Mental Health Subaccount, the County Medical Services Program Subaccount, and other social services programs included in 1991 Realignment.
4. The status of collective bargaining for the IHSS program in each county.

Through an IHSS Working Group, CSAC, counties, and county affiliates dedicated significant time in 2018 to engaging with the Department of Finance about the impacts of the new IHSS MOE and need for a sustainable structure so that counties can continue to deliver IHSS and other critical Realignment programs on behalf of the state. Counties appreciate the Department of Finance’s partnership and engagement on these efforts.

The Department of Finance report contains detailed findings on each of the four required elements as well as specific recommendations to revise the current IHSS MOE, which are also included in the Governor’s January Budget proposal. The proposed revisions would adjust the MOE base downward, lower the inflation factor to four percent, stop the current IHSS mitigations that include redirected growth and accelerated caseload growth, and make other changes to 1991 Realignment. The end result of these revisions is estimated to increase State General Fund costs for IHSS, starting at $241.7 million in 2019-20 and growing to $547.3 million in 2022- 23. The Department of Finance estimates that there would not be a Realignment shortfall until 2021-22 and it would be a minor shortfall of $9.5 million. This is positive news for counties as prior estimates under the existing structure showed shortfalls of several hundred million dollars in the coming years.

CSAC is grateful for these proposed increased state resources for IHSS, which will provide welcome relief for counties. Further details on the report and the proposed MOE revisions can be found in the CSAC Budget Action Bulletin beginning on page 15.