State Budget Update: July 1, 2012

Late last week, Governor Brown signed AB 1464, the main budget bill for the 2012-2013 fiscal year that begins today, July 1. This was very good news for those served by regional centers since many regional centers – including Regional Center of Orange County – would have had to borrow money to continue operating if an agreement had not been reached by the end of the fiscal year. As it is, since the State had cash flow problems, we have already borrowed nearly $7 million this past month.

As expected, the Governor and Legislature decided to continue the mid-year budget cut to regional centers that took place earlier this year. That cut amounts to $200 million for fiscal 2012-13. It is expected that cut will be achieved through cost-savings measures already in place, as well as a 1.25% cut in payments to service providers for 2012-13. This 1.25% cut actually offers some relief because it replaces the current 4.25% cut in payments that service providers have been struggling with this past year.

It is also important to note that the budget relies on voters approving tax increases that will be on the ballot in November. If voters don’t agree to raise taxes, the plan calls for “trigger cuts” to many areas of state government in January 2013, including a cut of $50 million to the regional center system.