2. What We Will Discuss Social Services Realignment What programs were Realigned How the funding is structured Assessment for Social Services Challenges and Implications 2010-11 May Revision 1

3. What Social Services Programs Were Realigned? CalWORKs Assistance, Eligibility, Employment Services Foster CareChild Welfare Services Adoptions Assistance In-Home Supportive Services County Services Block Grant County Juvenile Justice Subventions (AB90) County Stabilization Subventions California Children’s Service s 2

4. How Did County Sharing Ratios Change? Program CalWORKs Aid PaymentsCalWORKs EligibilityFoster CareChild Welfare ServicesAdoptions AssistanceCalWORKs Employment ServicesIn-Home Supportive ServicesCounty Services Block GrantCalifornia Children’s Services Old Share (non-Fed) 11%50% 5%24% 0% 3%16%25% New Share (non-Fed) 5%30%60%30%25%30%35%30% total50% total 3

5. Purpose For Social Services Dedicated fund source for changes in responsibility Amounts intended to reflect change in county cost since 1991 Not designed to replace prior county support 4

6. How is Realignment Funded? ½ Cent Sales Tax and dedicated portion of Vehicle License Fees (VLF) Funds are used first to meet base, then to Caseload Growth, and lastly for General Growth $2.2 Billion initial funding $522 Million (24%) Social Services Social Services now receives 37% total funding 5

7. County Approaches to Realignment Different levels of funding - Different county approaches Counties that use Realignment as only source for program matches Counties with additional county General Fund above realignment 6

8. Realignment as Fund Source for MOE’s Maintenance of effort for mandated social services programs County GF reflective of priorities and perception of sufficient realignment funding Funding changes driven by population and caseload growth Placer County example ◦ Huge population growth and caseload demands since Realignment ◦ Insufficient Realignment funding to cover mandated program costs 7

9. Realignment Base Funding Originally Established in 1991-92 Based on Formula Intended to capture the funding necessary to reflect increased county program responsibilities Foster Care example: changed from 5% to 60% County share Based on historical levels of individual County support Initial adjustments due to equity issues 8

10. Realignment Caseload Growth Funding Reflects mandated growth in social services programsAmount based on program expenditures, not caseload Calculation based on change in County cost due to mandated cost increases (i.e. growth in caseload) Determined by comparison of County specific costs from two years ago compared to last year Increased cost generally translates to increase caseload growth State Department of Social Services and Health Care Services calculate draft amounts for each county. Counties Review to validate amounts and recommend adjustments. 9

11. Caseload Growth Issues CalWORKs Caseload Growth Exception ◦ County share decreased (11% to 5%) ◦ Increased caseload = Decreased caseload growth Foster Care/Group Home Rate Increase ◦ 32% Rate increase retro to December 2009 ◦ Higher rate = higher caseload growth IHSS as Caseload Growth Driver ◦ Significant increased costs translate to significant caseload growth over time 10

12. Realignment General Growth Funding Can apply to Sales Tax and/or VLF funding once base and caseload growth are fully funded Sales Tax general growth now primarily benefits social services VLF general growth primarily benefits health and mental health Has occurred only a few times for Sales Tax since 1991 Has occurred in most years for VLF until 2007-08 11

13. Realignment Challenges Mandated and non-mandated programs competing for limited funds Two year funding lag even if sufficient Sales Tax/VLF Transfers between accounts – Who Benefits? 12

14. Realignment Fund Transfers 13

15. Legislative Action Changes to base funding and distribution ◦ 1992-93 Restoration ◦ AB1716 (2003) Restoration CWS/Foster Care/Adoptions ◦ Increased program requirements IHSS ◦ Expanded eligibility, collective bargaining, and Personal Care Services Program (PCSP) CalWORKs Human Services Funding Deficit ◦ Funding shortfall leads to encroachment 14

16. Has Realignment Worked for Social Services? Over time, funding has largely tracked caseload growth Has not worked every year Current Realignment picture is bleak but better than alternative Realignment as funding backstop – with many holes 15

17. Funding Implications Base funding has not been met since 2006- 07 Social Services base currently underfunded by $248 million Underfunding equals permanent cut to base funding Caseload growth has not been funded since 2006-07 Currently underfunded by $285 million Additional estimated $50 million due this year Underfunding paid with future year caseload growth funds Underfunding squeezes general growth to all accounts Total combined underfunding is $583 million 2009-10 Base also on track to be underfunded 16

18. Funding Implications continued 17

19. Are We Out of the Woods Yet? Sales tax showing slow steady improvement VLF remains highly volatile 2010-11 Likely to be improvement over past few years Funding unlikely to catch up for at least several years May Revision Proposal 18

20. 2010-11 May Revision Major changes to county responsibility, but no new funding. County share changes: Foster Care Assistance 60% to 80% Foster Care Eligibility 30% to 52% Adoptions Assistance 25% to 80% Child Welfare Services 30% to 80% Food Stamps 30% to 81% 19

21. 2010-11 May Revision – How Funded? Pocket to Pocket funding – It’s our Money! Rips off $602 million in Mental Health funds Rips off $102 million Fed Stimulus (ARRA) funds Redirects $257 million in “County Savings” due to IHSS reductions One-time funding for ongoing changes 20

22. Questions 21