DHS announces more than $30 million in budget reductions

The Oklahoma Department of Human Services announced planned reductions totaling about $30 million over the course of the next fiscal year to a number of programs serving vulnerable children and adults.

“In this most difficult of budget years, we are grateful for the Governor’s and Legislature’s continuing support to the tune of an additional $18 million above our last year’s appropriation,” said DHS Director Ed Lake. “Unfortunately, the cumulative effects over the past couple of years of several state revenue failure reductions and the necessity of covering additional, unfunded obligations such as growth in adoption assistance payments,  increases in the state’s share of  Medicaid programs, all add up to a  $30 million budget shortfall for us.”

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Over the past two fiscal years, DHS has been forced to reduce more than $80 million from the agency’s operating budget and cut more than 1,200 positions statewide.  The prior cuts have been made primarily to administrative expenses in an effort to protect core services.

“Closing this budget gap is much more difficult this year because we have made so many significant administrative and small program cuts each year and also have sizeable required expenditures we cannot cut. While there was no way to reduce this large of an amount from our budget without impacting direct services to clients, we have approached these reductions with extreme caution, working diligently to  minimize the harm to the most vulnerable people being served,” Lake noted.

“These rate reductions and service cuts will undoubtedly be difficult for many.  Because we spread the cuts across all of the populations we serve, we were able to avoid total elimination of any one program and   preserve fragile home and community-based service systems for seniors and people with disabilities.  I am so grateful to our many advocates and service providers for working closely with us throughout this process to find savings that have the least detrimental impacts.”

The reductions include a six-month freeze on new applications for child care subsidies, reductions to certain types of services in the ADvantage Medicaid home and community-based program for seniors, reduced service levels for Medicaid in-home supports for people with developmental disabilities, reductions  to senior nutrition programs, and a five percent rate cut to foster home and adoption assistance payments.

Examples of how these cuts will affect people:

·       Approximately 1,000 children and their families each month will be denied assistance by the freeze on child care subsidies.  This freeze may also have a significant financial impact on some child care homes and centers around the state that predominantly serve families who receive the subsidy.

·       A senior receiving 20 hours each week of personal care services through the ADvantage program may experience the loss of up to 5 hours per week of assistance with bathing, medication assistance and food preparation.

·       An adult or child with a developmental disability living at home with his or her family may experience the loss of up to seven hours per week of services. The family still retains choice on what type of services they receive within their approved dollar amount.

Because most of these services are provided through contracts with private agencies, private sector jobs may also be lost as a result of these budget cuts.

Due to previous funding for the Pinnacle Plan, the improvement plan for the foster care system, DHS has been incrementally increasing reimbursement rates to foster and adoptive families which help cover some of the costs of raising children such as food, clothing, housing, transportation, education and other miscellaneous expenses.

“Oklahomans serving as foster parents do this work because they care about keeping children safe and building strong families in this state,” said Lake. “We know foster families are the backbone of our placement system and are extremely grateful to them for partnering with us to provide care for children who come into state custody.  The last thing we want to do is take a step backward from progress with these payments, but our current revenue shortfall leaves us no easy choices.”

This proposed rate cut of five percent would mean a reduction of approximately $1 per day to the reimbursements to foster families and subsidy payments to families who have adopted children out of foster care. However, the rates will still be about $4 per day higher than they were previous to the beginning of the Pinnacle Plan in 2012.

DHS will also be forced to make more internal administrative cuts which will mean several county office closures and consolidations around the state, and additional reductions to personnel costs, contracts, IT services and training.

“DHS employees are among the most dedicated state employees I have ever had the privilege to lead,” said Lake.  “Many have expressed to me their concerns and compassion for the vulnerable people they serve and how they would be adversely impacted by the program cuts being considered.   Although the internal budget cuts will likely make fulfilling our mission even more difficult for our reduced workforce, I am confident DHS employees will continue doing their best to serve Oklahomans in need.”