1. State Budget Developments: A Legislative Update from Austin Presentation to St. Luke’s Episcopal Health Charities Eva De Luna Castro, Analyst, deluna.castro@cppp.org Janet Hutchison, Development Specialist, hutchison@cppp.org April 22, 2004 900 Lydia Street, Austin, Texas, 78702 (512) 320-0222

2. 1 First, some CPPP information Update on Effect of State HHS Consolidation on State Agencies and on Providers Budget Impact by Program at State and Local Level Presentation Outline

3. 2 CPPP Activities State Budget & Taxes Workforce & Economic Development Income/ Support Health Care Child Well- Being Hunger & Nutrition

4. 3 Facts & the Future: The William P. Hobby Policy Conference Doubletree Hotel – Austin, 6500 N. IH-35 Featuring Addresses By: Former Lt. Governor Bill Hobby, Texas Comptroller Carole Keeton Strayhorn, State Demographer Dr. Steve Murdock Mark Your Calendars: May 13-14

5. 4 September to December: Budget Recommendations Developed; Legislative Budget Estimates Issued February to April: House and Senate Budget Hearings, Mark-Up, and Conference Committee September: New Biennium Begins; Operating Budgets Prepared Even Years Two-Year Cycle Odd Years April to June: Instructions for Agency Budget Requests Issued June to August: Strategic Plans and Budget Requests Due; Budget Hearings Held Throughout the biennium: quarterly performance reports due Where We Are in the State Budget Cycle

6. 5 State Budget, 2004-05 Biennium

7. 6 State Budget, Fiscal 2004

8. 7 2004-2005 GR Budget Percent of All GR Texas Education Agency$20.7 billion35% Health and Human Services Commission$7.4 billion13% Dept. of Criminal Justice$4.6 billion8% Teacher Retirement System$3.9 billion7% Department of Human Services$3.3 billion6% State worker retirement and health insurance$2.6 billion4% Mental Health and Mental Retardation$2.1 billion4% Higher Education Coordinating Board$675 million1.1% Family and Protective Services (formerly PRS) $483 million0.8% University of Texas at Austin$483 million0.8% Where the GR Is, by Agency

9. 8 House Bill 1: General Appropriations Act for 2004-05 (charts later in this presentation show budgeted outcomes) House Bill 2292: Cut $1 billion in General Revenue out of Medicaid, CHIP, and other HHS programs; reorganized HHS agencies Federal budget decisions: 2005 has not yet been decided by Congress School Finance Session: Governor’s proposal limits future uses of General Revenue for HHS & other non-K-12 needs; limits ability of local governments to make up for state cuts Major HHS Agencies and Programs Affected by…

10. 9 February 1, 2004: Department of Family and Protective Services is launched March 1: Department of Assistive and Rehabilitative Services is launched September 1: Departments of State Health Services and of Aging and Disability Services will begin operating Other: Eligibility determination (for cash welfare, Food Stamps, Medicaid) moves to Health and Human Services Commission, along with Nutritional Services and Family Violence programs. HHSC also responsible for centralized administrative services, HHS program policy, and interagency initiatives. HHS Reorganization Update

11. 10 Health & Human Services Council Office of Inspector General Post-Consolidation Org. Chart

12. 11 Department of Family and Protective Services: Everything that was overseen by Protective and Regulatory Services (child abuse and neglect investigations, foster care and adoption payments, at-risk prevention and intervention programs, adult protective services, child care licensing and regulation, MHMR investigations) Department of Assistive and Rehabilitative Services: everything that was at the Rehabilitation Commission, Commission for the Blind, Commission for the Deaf and Hard of Hearing, and Interagency Council on Early Childhood Intervention Department of State Health Services: programs provided by the Department of Health, the Commission on Alcohol and Drug Abuse, and the Health Care Information Council, and mental health community services and state hospitals run by the Dept. of Mental Health and Mental Retardation (MHMR) Department of Aging and Disability Services: mental retardation and state schools run by MHMR, community care and nursing home services at the Department of Human Services, and services of the Department of Aging What’s in the New Agencies?

13. 12 Many contractors and vendors will now only have to deal with HHSC (because of consolidation of leasing/facilities management, legal services, human resources, purchasing, information resources management, financial management, and other admin. functions). Some providers may have to work with MORE agencies (for example, a provider helping people who have mental retardation AND mental illness now works with MHMR, but in the future may have to deal with DADS and DSHS). Consolidation of central administrative functions is supposed to result in 716 fewer employees by the end of fiscal 2005, saving the state almost $46 million in General Revenue. Not a lot of information yet on what will happen to staffing at local offices; outcome depends on decisions about call centers (eligibility determination). What Does this Mean for Providers?

14. 13 Medicaid Acute Care after HB 2292 and other State Budget Cuts

15. 14 Medicaid Caseloads, by Client Category

16. 15 Long-Term Care Clientele

17. 16 Community Care, by Program

18. 17 HB 2292 Policy Changes Also Cut CHIP

19. 18 CHIP Enrollment Down 25% Statewide

20. 19 Public Health Programs at TDH

21. 20 More TDH Programs (moving to HHSC)

22. 21 More Public Health Program Cuts

23. 22 More Responsibilities for Locals, Less $$

24. 23 Community MH Services for Adults, Children

25. 24 Services for Texans with Mental Retardation

26. 25 Services for Neglected/Abused Children

27. 26 Services for Neglected/Abused Elderly

28. 27 Child Care: Less Help for Working Poor

29. 28 Cash Assistance Will be Even Scarcer

30. 29 Nutrition Programs Will Grow, But There’s Still a Large Unmet Need

31. 30 50-State Ranking 11 th 47 th 31 st 34 th 13 th 15 th 35 th 41 st 21 st 36 th 41 st 38 th Even Before Cuts, Texas was Low- Spending

32. 31 Budget Impact Stories Needed! CPPP’s web site (at http://www.cppp.org/stories.html) is collecting information about the impact of state budget cuts and policy changes made during the 78th Legislature. We are interested in hearing about the impact of budget decisions at all levels, from individuals to businesses/organizations to units of government. Social service agencies; advocacy organizations; schools and teachers; hospitals and clinics; agency caseworkers; Medicaid, CHIP, TANF, or Food Stamps recipients; city or county government officials; non-profit leaders; and anyone else who was affected are all encouraged to participate. If you have a personal story or a report to share about how 2004-05 state budget decisions have changed your life, your work, your organization, or your community, please use the online form.

33. 32 Early April 2004: HHSC reports higher-than- budgeted costs in Medicaid and CHIP (vendor drugs); shortfall of $582 million? Comptroller urging restorations to CHIP. Unused funds: $583 million (April 13 th estimate) Leadership so far has been reluctant to undo HHS and other budget cuts, arguing that unspent funds may be needed for Medicaid or other shortfalls that develop before January 2005 HHS Budget Updates

34. 33 Eliminate “Robin Hood” system that redistributes local property tax revenue and benefits 88% of Texas school children Lower school property taxes and limit the ability of other local governments (counties, cities, hospitals, special districts) to raise property taxes in the future Make some small changes to state/local funding for K-12 (cigarette tax increase, new tax on adult entertainment, revenue from video slot machines, business school property taxes considered state rather than local revenue, etc.), but nothing that will significantly increase what Texas spends on K-12 or any other public service Governor’s Goals for Special Session on K-12 Finance

35. 34 Governor Rick Perry (www.governor.state.tx.us) Citizen's Opinion Hotline: (800) 252-9600; Fax: (512) 463-1849; Office of the Governor, P.O. Box 12428, Austin, Texas 78711-2428 Lieutenant Governor David Dewhurst (P.O. Box 12068, Austin, TX 78711) Speaker of the House Tom Craddick (P. O. Box 2910, Austin, TX 78768) Your Own Legislators: Representative (P. O. Box 2910, Austin, TX 78768) and Senator (P.O. Box 12068, Austin, TX 78711) Other Members of the LBB: Senator Steve Ogden Representative Talmadge Heflin Senator Robert Duncan Representative Brian McCall Senator John Whitmire Representative Fred Hill Senator Judith Zaffirini Representative Vilma Luna Health and Human Service Chairs of Budget Committees: Senator Jane Nelson, HHS Workgroup Chair, Senate Finance Committee Representative John Davis, HHS Subcommittee Chair, House Appropriations Committee (see www.capitol.state.tx.us for more contact info and “Who Represents Me?” search engine) Contacting State Officials

36. 35 www.hhsc.state.tx.us/Consolidation/Consl_home.html (Health and Human Services Commission webpage on HHS Transformation) www.lbb.state.tx.us (Fiscal Size Up 2004-05; Texas Budget Source; Federal Funds Watch; appropriations act) www.cppp.org (William P. Hobby Conference, May 13-14; Policy Page subscriptions, policy briefs, presentations, and other reports) More Reorganization and State Budget-Related Information