StakeholderAlert: DSHS 10 percent Budget Reduction Proposal

Dear Colleagues, Stakeholders, Tribal and Community Leaders:

As last week’s revenue forecast confirmed, the state’s economy continues to be slow to recover from the worst economic downturn in 80 years. Forecaster Arun Raha indicates that the state will have $1.4 billion less revenue than expected over the next two fiscal years.

In anticipation of the revenue forecast decline, Governor Chris Gregoire has asked state agencies to create options for cutting General Fund State spending by up to 10 percent over the 2011-13 biennium, which began July 1, 2011.

For the Department of Social and Health Services, that means reducing our General Fund spending by $573 million. Combined with the resulting loss in federal funding, the proposed reductions would result in an estimated impact of $873 million less in total spending.

The latest revenue forecast also confirms what economists have been saying about how hard it will be for state governments to recover from the recession. All indications tell us that we will be feeling the impact of the recession for several more years.

That is why we at DSHS have worked hard to make the budget cuts we have already taken as strategic as possible; rethinking and resetting the way we provide services and are organized operationally for our new economic reality. Our goal has been to not merely weather the storm, but to emerge a more focused, efficient and impactful organization.  And we have done our best to apply our values and principles to the Governor’s call for us to develop options for reducing our budget by up to an additional 10 percent.

While many of our proposed reductions are ones we believe are strategic and aligned with our new economic reality, there are many that would have great impact on the services and supports so many people in our state depend on and would have far-reaching consequences.

Our guiding principles as we prepared our budget proposal were:

1. Strengthen and expand existing home and community based service delivery systems.
2. Continue with strategic program redesign.
3. In this economy, ask, “What is the role of the State?  Should we continue with this program or service?”
4. Protect the most vulnerable and maintain public safety.
5. Optimize efficiencies.
6. Be consistent with our Strategic Framework for the Future.

A budget reduction of this magnitude cannot be accomplished solely through efficiencies and program redesign. Many of these reductions, if implemented, would reduce services and impact some of our most vulnerable citizens.  While many of our reduction proposals are strategic and there are others that, while painful, can be accomplished, there are reductions that are for many of us unthinkable – but would be necessary to reach the 10 percent target.

Services would be eliminated for more than 80,000 people who are elderly with a disability, have functional or developmental disabilities, mental health needs or chemical dependency.
Chemical dependency treatment dollars to counties would be eliminated. Some people would lose their monthly Aged, Blind and Disabled cash grant.

We recognize that many of our reductions would be unconscionable under any other set of circumstances. But our Constitution requires a balanced budget and the process between the Governor, the Legislature and the public begins with the consideration of reductions that would be necessary to close the gap during the biennium.Now, more than ever, I am convinced that history will judge us by how well we lead and share responsibility through these most difficult times.  I know that many of these reductions would be devastating for the people to whom you are dedicated. But for their sake, please join me in leading through this challenge, participate fully in the conversation that our Governor, the Legislature and the public will have during this process, and continue to help us find ways to accomplish our mission for the people of Washington.

We will do all we can to fully inform the public about the reduction options we have presented to the Governor and to educate them on the cumulative impact of reductions we have taken over several years. This will include materials posted on our website, videoconferences with stakeholders and tribal nations and a series of Town Hall Meetings across the state that I plan to couple with meetings with employees. We will continue to work with the Health Care Authority for the presentation of potential reductions in Medicaid acute services so that you are able to see the entire picture of the impact of our combined reductions.

Please become informed and engaged in the process that will unfold in the months to come. We need to hear from you about the potential impacts in your communities, as only you can understand and explain them.
These times are hard with many uncertainties but we are being asked to lead through a historic moment in our State and we must move through it together.

Susan N. Dreyfus
Secretary
Department of Social and Health Services