State Budget Update
Governor Brown released his proposed budget for the 2014-2015 fiscal year in early January. Reflecting a slowly-improving economy, the proposal asks for $255.3 million in increased funding for regional center services.
The largest part of the proposed increase, $138.6 million, is intended to cover the larger number of consumers needing services, along with increased costs for providing services. Another major increase to the Purchase of Services (POS) part of the budget will go to service providers’ for the costs directly related to an increase in California’s minimum wage that legislators passed last year. The increase from $8 to $9 per hour will go into effect on July 2, 2014, costing about $110 million during the coming fiscal year. (Ultimately, the law calls for the minimum wage to increase to $10 per hour on January 1, 2016.) In addition, $7.5 million of the increase will fund overtime wages for service provider staff who previously did not receive overtime pay.
Unfortunately, the budget proposal does not acknowledge that the minimum wage increase will put upward pressure on service provider wages across the board. For example, it does nothing to address pay for workers who earn above that base level, such as supervisors and managers. It is also silent on the potential impact of the federal Affordable Care Act (sometimes referred to as “Obamacare”) on the community care system and service providers’ costs of doing business.
In May, the Governor will release a revision of his budget proposal based on the latest economic forecasts. And by June 15, the Governor and Legislature will work together to determine a final budget for the fiscal year that begins July 1.