This week I want to continue the conversation we have been having about how the state budget shortfall will affect DHS clients, service providers and employees. I so appreciate the feedback I receive from you. While I try to follow up with everyone individually, there are some questions that I want to address here.
Do we know when these cuts will go into effect?
As I stated last week, we are moving ahead as if we are operating under the 9 percent reduced budget as of July 1, 2010. When the clients and providers will see reduced services will vary from program to program based on federal requirements, notification requirements and a variety of other factors. For all the affected services, it will be important to get this information out early so people can plan ahead and make whatever changes are possible to mitigate the effect of these reductions on their lives and families.
Why are some services cut dramatically while others received smaller or even no reductions?
The situation we're facing is a reduction in state revenues, also known as "general fund." Those are the dollars that come from the Oregon income taxes paid by the people of our state. Because of the economy, that fund is severely depleted by $577 million. DHS's share is $158 million, so we had to reduce our general-fund expenditures by that amount.
At the same time, many of our services are paid for by federal funds or other funding sources in whole or part. Because we have to reduce our general fund budget, and aren't allowed in most cases to move money from fund to fund, some services are not cut, while others are.
For example, Supplemental Nutrition Assistance Program (SNAP) client benefits are 100 percent federally funded. As a result, these benefits to clients are not included in the reduction, and we are not allowed under law to use those dollars for anything else. Another example is the Healthy Kids program, which is funded by a combination of the Oregon provider tax and federal matching funds. Cutting that benefit would not reduce the shortfall in the state general fund in any way.
What's the latest news about whether there will be federal assistance?
Congress is still considering whether to add an additional six months to the increased federal match for Medicaid that was part of the original stimulus package. In fact, they were debating that issue today. You can see an update from CNN here: http://money.cnn.com/2010/06/16/news/economy/unemployment_benefits_senate/index.htm We do not know when the decision either way will ultimately come. As I said last week, we have to move forward as if those funds will not be coming.
I know what a difficult time this is, and I continue to be impressed with the professionalism and dedication DHS and OHA employees are bringing to their work. I will continue to keep you informed as I learn more.
Thank you for all that you do.