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DHS 2011-2013 ARB > Reduction options

DHS 2011-2013 Reduction Options

 

Along with their Agency Request Budget (ARB) it is required by law [ORS 291.216 (12)] that state agencies include a list of budget reduction options equaling 10% of their General Fund expenditures.

 

As the state of Oregon grapples with an ongoing budget crisis, the Governor has asked all agencies to submit a list of budget reductions equivalent to 25 percent of the General Fund (GF) dollars in the Current Service Level (CSL) budget for the 2011-2013 biennium. (The Current Service Level budget is the projected cost to continue the current Oregon Health Authority (OHA) and Department of Human Services (DHS) programs and services in 2011-13, including program caseload growth costs, inflationary cost increases, and the discontinuation of the Federal ARRA stimulus funding received during the 2009-11 biennium.) CSL does not take into account the budget reductions made in 2009-2011. This reduction list will be submitted with the Agency Request Budget, but is not included in the budget. Rather, the reductions are options the Governor can consider when crafting the 2011-13 Recommended Budget.

 

 

Oregon Health Authority

 

In its 2009-11 budget, OHA identified 99 Policy Packages that totaled $897.4 million GF and $3.2 Billion Total Funds (TF) of additional funding needed to begin to meet the true need for Health/Human Service programs and services for Oregon's citizens. Of this, 12 Packages were included in the 2009-11 Legislatively Adopted Budget, totaling $42.5 million GF and $1.5 Billion TF. This leaves $855.2 million GF and $1.7 Billion TF in unmet Human Service needs that the 2011-13 Current Service Level budget does not consider. Since the 2009 Legislative Session ended and the LAB was completed, OHA has had to make additional budget reductions due to declining state revenues.

 

It is from this position that the OHA list of reduction options would be applied to achieve a 25 percent reduction of General Fund.

 

 

Department of Human Services

 

Oregon's economic situation has put a profound strain on the ability of the Oregon Department of Human Services and its service providers to fulfill their missions of providing an adequate safety net for the state.

 

As the recession drives more Oregonians to need human services, it has also meant there are fewer resources to pay for those services. In order to meet the demands of both a balanced budget and increasing demand, DHS made several reductions over the course of 2009-2011.

 

The reductions have meant loss of important services such as Employment Related Day Care and deep rate reductions in residential care organizations and children's foster homes serving persons with developmental disabilities. It has also meant that DHS service providers and the agency are operating with reduced service and staffing levels.

 

It is from this position that the DHS list of reduction options would be applied to achieve a 25 percent reduction of General Fund.

 

 

Joint agency guidelines

 

In crafting the list of 2011-13 CSL budget reduction options, OHA and DHS leadership identified guidelines and guiding principles when prioritizing the reduction list with the understanding that deep reductions will have adverse effects on the Oregonians we serve:

  1. Do least the harm to the fewest people.
  2. Apply the OHA goals when looking at which services to preserve: improve the lifelong health of all Oregonians, increase the quality, reliability and availability of care for all Oregonians, lower or contain the cost of care so it is affordable to everyone.
  3. Continue all administrative reductions, cost controls, and efficiency measures implemented in 2009-11 and prior.
  4. Maximize efficiencies and cost reductions available through the federal Affordable Care Act.
  5. Consider alternative funding sources and alternative sources for programs that people can access as a stop gap to lost OHA and DHS programs.
  6. Remove controllable Current Service Level increases first - COLAs etc.
  7. Avoid reductions that will shift people to more costly programs in OHA or DHS.
  8. If the choice is between cutting an entire program or reducing it to the degree it is ineffective ("thinning the soup"), reduce the entire program.
  9. When programs are reduced or eliminated, make commensurate reductions to support and administrative functions.
  10. Recognize that heavy constraints for maintenance of eligibility for Medicaid programs will shift reductions to deeper provider rate cuts and services/benefits.
  11. For DHS-CAF, Child Safety is number one priority. Look at non-mandated programs first, then move to programs in which that majority of the general fund is budgeted.

OHA and DHS have coordinated with one another as each department has crafted their respective reduction options around the guideline of "avoiding reductions that will shift people to more costly programs in OHA or DHS". Each OHA and DHS reduction has been examined in regard to the effect it may have on other DHS and/or OHA programs. These types of reductions have been priced such that any cost shifts to other OHA or DHS programs have been deducted from the reduction option.