This week, the Department of Finance released Trailer Bill language that would establish a new In-Home Support Services (IHSS) Maintenance of Effort (MOE) for all 58 counties.  This language must be approved by the Legislature, and signed by the Governor, to stop the action taken in the Governor’s 2017-18 proposed Budget that repealed the IHSS MOE and shifted an estimated $623 million in additional costs to Counties.  Most significantly, the new proposal provides for State General Fund (GF) contributions of $400 million in the first year to offset the increased county cost of the new MOE.  The proposal will also redirect Vehicle License Fee growth for Health, Mental Health and the County Medical Services Program (only for CMSP counties) for five years as additional assistance in bridging the increased IHSS costs.  

Other key provisions of the proposal include:

  • State GF contributions of  $330 million in the second year, $200 million in the third year, and $150 million ongoing;
  • An annual inflator starting in year two of 5 percent, and rising to 7 percent in year three and thereafter. The inflator will be reduced by half or suspended based on sales tax performance;
  • “Re-opener” language that brings  the Administration and counties back into negotiations to discuss the provisions of this bill and impacts on counties;
  • Real-time caseload funding (currently accrual funding) for IHSS that provides $140 million in the first year to mitigate impacts on counties;
  • Forgiveness for costs associated with the  Board of Equalization Error through 2015-16;  
  • Availability of loans to counties experiencing hardship due to the IHSS cost shift, up to $25 million year statewide;
  • IHSS county Administration costs will be included in MOE, but with an annually adjusted cap based on State budgeting methodology;
  • Local bargaining for IHSS worker contracts and a requirement that agreements not in place within nine months must be referred to the Public Employee Relations Board;
  • Institutes of Mental Disease rate freeze for five years to avoid approximately $15 million in annual increased county mental health costs funded through Realignment; and,
  • Nullification of potential county lawsuits related to the determination in Governor’s January proposed budget to repeal the MOE.

The Trailer Bill language will be taken up in the Senate and Assembly next week as part of the State Budget package.  A full copy of the Administration’s IHSS proposal can be accessed here.