Governor’s Proposed 2010 Budget Spreads Pain All Around; Proposed Cuts Would Harm Seniors and Low Income Residents

In an effort to close an estimated $1.4 billion budget hole for fiscal year 2010, Governor Jennifer Granholm proposed almost $670 million dollars in spending cuts in her February 12, 2009 budget address.  Many of those cuts will have a significant impact on seniors and other legal services clients.  Despite the Governor’s often expressed commitment to protect the most vulnerable even in difficult budget times, the Governor and her top administrators have acknowledged that FY 2010 budget includes many cuts that will harm low income Michiganians.

In programs of particular concern to the elderly, the Governor has proposed $2.2 million in cuts to the Office of Services to the Aging with specific reductions in in-home services, care management, congregate meals, home delivered meals, the foster grandparent  and RSVP programs, senior companions, and other programs.  Moreover, despite asserting a continuing commitment to long term care reform, the Governor has proposed eliminating the 3 year old Office of Long Term Care Supports and Services and integrating the staff into other divisions of the Department of Community Health.  One bright spot highlighted by the Governor that is of real interest to the elderly and people with disabilities is a considerable increase in funding for the MiChoice Home and Community Based waiver program and nursing home transition services that help nursing home residents return to the community.  This substantial additional funding should help reduce the number of individuals on the MiChoice waiting list across the state and speed the departures of nursing home residents eager to return home. Funding should also be available for the first time to provide MiChoice services to individuals in some licensed assisted living facilities and subsidized housing projects.

Other programs for people with disabilities also were targeted for significant cuts.  The Governor plans to close the Mt. Pleasant Center, a state hospital currently housing individuals with developmental disabilities and mental illness.  While many advocates greet the closure of that often troubled facility with enthusiasm, other proposed cuts will be far more controversial.  In a hearing before the House Appropriations Committee Subcommittee on the Department of Community Health on February 18th, DCH Director Janet Olszewski admitted that among the most difficult cuts were those made to mental health programs including a $7.6 million reduction in funding for mental health services for individuals who do not qualify for Medicaid. It is unlikely that Community Mental Health agencies will have other funds to support these programs, thus leaving many of these individuals without any mental health services.  In addition, the Governor proposes eliminating $6.8 million in mental health multi-cultural services, and eliminating mental health initiatives for older persons, the mental health court pilot projects, and mental health respite services.  There will also be a reduction in substance abuse services.  Moreover, Michigan Protection and Advocacy Service is targeted for a reduction of approximately half of its state appropriation.

Public Health programs are also identified as targets for funding reductions.  For example, under the Governor’s proposal, the AIDS Risk Reduction and Media Line will be eliminated. No funding will be available for Huntingdon’s Disease, Parkinson’s Disease, Osteoporosis, or Arthritis and a diabetes outreach program at Wayne State will be defunded. The Nurse Family Partnership to address the state’s infant mortality rate will be discontinued.  In a proposal that has already received significant attention, funding for the state’s poison control centers would be eliminated.  Critics argue that individuals who will no longer be able to get advice from the poison control hotlines will end up in emergency rooms at hospitals, thus costing the state far more money than it can save in this $255,000 proposed cut.  Pregnancy prevention program funding would also be decreased and some parents of children in the Children’s Special Health Care Services Program will be required to pay increased parent participation fees.

The Department of Human Services is also targeted for a $100 million reduction.  The Governor proposed eliminating the $14 monthly state supplements to SSI recipients living independently in their own homes, while retaining the $92/month personal care supplement available to SSI recipients living in licensed assisted living facilities.  In addition, funding for before and after school services, day care services and employment support services will also be cut.  One small possible bright spot in the budget is the approval of 25 “out station eligibility workers.”  Facilities such as hospitals, nursing homes, and other medical care providers can pay a portion of the cost of the eligibility worker and have those costs matched by the federal government, allowing additional eligibility workers at no significant extra cost to the state.  Health care providers who are frustrated by slow eligibility determinations that mean delayed reimbursements for the providers may consider it a worthwhile investment to help fund the cost of additional eligibility workers stationed in their facilities.  State officials believe that if this program is done well, it might make a dent in the overwhelming caseloads—which can be as high as 500-800 cases -- DHS workers now face.

State officials are only now starting to sift through the federal stimulus bill, the American Recovery and Reinvestment Act of 2009, to understand how much money will be forthcoming to the state and how it may be used.  While the Governor budgeted only $300 million in 2009 and $500 million in 2010 in increased Medicaid funds, the state will actually receive approximately $900 million in 2009 and $1 billion in.  The Governor has not proposed any reductions in eligibility or cuts in Medicaid funded services; in fact, the new stimulus bill prohibits States receiving federal stimulus funding from reducing eligibility.  However, because the actual federal Medicaid dollars far exceeds the Governor’s more conservative estimate, some General Fund dollars will be freed up to address other needs.