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Governor Schwarzenegger's proposed budget cuts would gut home care and increase unemployment

by Adrienne Verrilli, published

Governor Schwarzenegger’s 2010-2011 budget proposes the virtual elimination of critical in-home services to California’s poor and disabled seniors.  The targeted program is known as the In-Home Supportive Services (IHSS), a program that has provided in-home domestic and personal care services to elderly, disabled, and poor Americans who cannot safely live and take care of themselves without assistance for six decades.  The goal of IHSS was, and still is, to provide care while allowing our nation’s most vulnerable people to remain in their homes as opposed to living in an institution such as a nursing home. 

Today, IHSS provides care for more than 430,000 poor and disabled Californians, six in 10 of which are over 65-years old and one in four over 80-years old.  Assistance is provided for various tasks such as bathing, grooming, helping with medication, as well as house cleaning and meal preparation.  To be eligible for the program, a person must be elderly, blind or disabled and have a monthly income of less than $845 for an individual.

The annual cost of the program is $5.5 billion, half of which ($2.25 billion) is paid for by the federal government, 35% by the state of California and 15% by individual counties.  However, as part of the American Recovery Reinvestment Act, the federal government is paying 61.6% ($3.5 billion) of the annual cost between Oct 2008 and December 2010.

In addition to caring for the state’s most vulnerable people, the program is a cost effective way for the state to provide in-home services for seniors or disabled people.  In fact, the Legislative Analyst’s Office’s recent report found that the cost was for an IHSS per person annually was $10,000 as compared to $55,000 for institutional care.

Despite the federal government’s large increase in funding and the cost-effective nature of the program, the Governor is seeking to eliminate services for 87% of the current program participants in his 2010-2011 budget.  Only individuals who are eligible to be put in an institution would remain in the program.  Moreover, this move would eliminate 370,000 jobs.

This is not the first time the Governor has targeted this program.  The 2009-2010 Budget Act cut back or eliminated services for the vast majority of people enrolled in IHSS.  However, a federal judge issued an injunction that has prevented the state from implementing the proposed changes to IHSS because they violated federal law.   Yet, the state ignored the order and in November 2009, a federal judge held the state in contempt for not complying with the court order to stop the changes.  In a separate case, the same judge rejected the state's attempt to reduce in-home care workers' wages, currently $10 to $12 an hour in most cases, by $2 an hour.  

It is difficult to comprehend the Governor’s logic.  Facing a massive budget crisis, the Governor’s response is to force the state’s poorest seniors and disabled into expensive institutions. As the state’s citizens are rapidly aging and the poverty rate increasing, the Governor wants to remove a six-decade old safety-net for our most vulnerable citizens.  Finally, with a 12.1% unemployment rate, the Governor wants to throw 370,000 out of work, costing the state millions in unemployment benefits.

California’s budget is a disaster* and its unemployment level atrocious, but balancing the budget on the back of the state’s most vulnerable citizens, leaving hundreds of thousands of low-wage workers unemployed is morally wrong and economically foolish.  The Governor must be prepared to take bold steps to solve this problem and not victimize the vulnerable and politically powerless.


*Editor's note:  While a deep recession and chronic overspending are significant contributors to California's budget crisis, it may be wise to also consider the deleterious, but often unspoken effects of the Alternative Minimum Tax (AMT) and Unfunded Federal Mandates on the state budget.

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