1. Department of State Health Services Legislative Appropriations Request Public Hearing July 20, 2004

2. DSHS Organizational Chart

3. Strategic Budget Structure & FY 2006-07 LAR

4. DSHS Strategic Budget Structure DSHS was created by H.B. 2292, 78 th Texas Legislature, Regular Session. Includes the functions of the: –Texas Commission on Alcohol and Drug Abuse, –Texas Department of Health, –Texas Health Care Information Council, and –Mental health (MH) services of the Texas Department of Mental Health and Mental Retardation (TDMHMR) Begins operations on September 1, 2004. In order to address the physical and behavioral health service priorities of a growing Texas population, DSHS staff worked with legacy agency staff, HHSC leadership, the Legislative Budget Board, and the Governors Office to develop the strategic budget structure for the new agency [See ATTACHMENT A].

5. Goal 1: Preparedness and Prevention Services DSHS will protect and promote the publics health by decreasing health threats and sources of disease. Example of programs in this goal include, but are not limited to: –Coordinate Public Health Services –Public Health Preparedness –Immunizations –HIV/STD and Hepatitis C Prevention –Kidney Health –Children with Special Health Care Needs –Laboratory Services

6. Goal 2: Community Health Services DSHS will improve the health of children, women, families and individuals, and enhance the capacity of communities to deliver health care services. Examples of programs within this goal include but are not limited to: –WIC and Farmers Market Nutrition Services –Women and Childrens Health Services –Primary Care and County Indigent Services –Mental Health Services for Adults and Children –Substance Abuse Prevention, Intervention and Treatment –EMS & Trauma Care Systems

7. Goal 3: Hospital Facilities Management and Services DSHS will promote the recovery and abilities of persons with infectious disease and mental illness who require specialized treatment. The programs included in this goal are: –Texas Center for Infectious Diseases –South Texas Health Care System –Mental Health State Hospitals –Mental Health Community Hospitals

8. Goal 4: Consumer Protection Services DSHS will achieve a maximum level of compliance by the regulated community to protect public health and safety. The strategies under this goal include: –Food (Meat) and Drug Safety –Environmental Health –Radiation Control –Health Care Professionals –Health Care Facilities

9. Goal 5: Indirect Administration Goal 6: Capital Items Indirect Administration includes: –Central Administration –IT Program Support –Other Support Services –Regional Administration Capital Items include: –Laboratory Bond Debt –Construction of Health Care Facilities –Capital Repair and Renovation – Mental Health Facilities –Capital Item

10. 2004-2005 Baseline Spending Level The baseline spending level is the starting point for the DSHS Legislative Appropriations Request for 2006-2007. It is based on : -fiscal year 2004 estimated expenditures, and -fiscal year 2005 budgeted Towards this end, the new agency has developed its 2005 Operating Budget and has also restated the estimated expenditures of the three legacy agencies into the new DSHS strategic goals.

11. FY 2004-05 Baseline Spending Levels All Goals Fund TypeFY04FY05 GR$800,960,885$792,717,988 GR-Ded$259,154,760$298,286,917 Federal$1,064,017,106$1,086,428,158 Other$87,764,523$149,767,289 Total$2,211,897,274$2,327,200,352

12. FY 2004-05 Baseline Spending Levels Goal 1: Preparation and Prevention Services Fund TypeFY04FY05 GR$152,454,653$150,310,352 GR-Ded$13,412,086$12,583,303 Federal$243,650,729$251,848,745 Other$21,888,629$20,502,896 Total$431,406,097$435,245,296

13. FY 2004-05 Baseline Spending Levels Goal 2: Community Health Services Fund TypeFY04FY05 GR$350,987,561$345,718,798 GR-Ded$231,195,850$271,662,822 Federal$764,549,673$790,436,467 Other$18,869,866$52,484,841 Total$1,365,602,950$1,460,302,928

14. FY 2004-05 Baseline Spending Levels Goal 3: Hospital Facilities Management and Services Fund TypeFY04FY05 GR$251,957,470$254,792,187 GR-Ded$500,181 Federal$18,545,101$17,475,156 Other$39,264,592$32,553,236 Total$310,267,344$305,320,760

15. FY 2004-05 Baseline Spending Levels Goal 4: Consumer Protection Services Fund TypeFY04FY05 GR$24,794,906$24,395,060 GR-Ded$9,590,358$9,170,553 Federal$8,694,790$8,804,772 Other$297,720$262,000 Total$43,377,774$42,632,385

16. FY 2004-05 Baseline Spending Levels Goal 5: Indirect Administration Fund TypeFY04FY05 GR$20,691,295$17,501,591 GR-Ded$1,315,605$1,229,378 Federal$14,746,881$13,446,984 Other$3,602,014$3,651,701 Total$40,355,795$35,829,653

17. FY 2004-05 Baseline Spending Levels Goal 6: Capital Items Fund TypeFY04FY05 GR$75,000$0 GR-Ded$3,140,680 Federal$13,829,932$4,416,035 Other$3,841,702$40,312,615 Total$20,887,314$47,869,330

18. Reductions to Baseline Request The Governor's Office of Budget, Planning & Policy and the Legislative Budget Board instructed each state agency to limit its 2006-2007 baseline request for general revenue-related funds to 95 percent of the sum of amounts expended in fiscal year 2004 and budgeted in fiscal year 2005. Under these instructions, the baseline request for fiscal year 2006 and 2007 for the Department of State Health Services must be $107.5 million less than its 2004-2005 spending levels.

19. Reductions to Baseline Request – Guiding Principles The following options are being considered to achieve the reductions to the baseline request: Maximize the potential savings of DSHS consolidation Maximize the use of federal funds Minimize impact to services

20. Options for Consideration for Exceptional Items – LAR 2006-07 2006-2007 funding requests for amounts that exceed 95 percent of the baseline spending level may be submitted as Exceptional Items. DSHS program staff have developed options for consideration for Exceptional Items [See ATTACHMENT B] in the following categories: –Restoration –Prevention –Infrastructure –Expansion

21. High-level information regarding the LAR will be posted at the new website of the Department of State Health Services. Comments will be accepted via the web or e-mail at: www.dshs.state.tx.us/LAR LAR@dshs.state.tx.us We encourage you to submit comments by Friday, July 30, 2004 in order to be considered in the LAR preparation. DSHS Contact: Kyle Baxter, Texas Department of Health, 512- 458-7640 or kyle.baxter@tdh.state.tx.us