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Office of the Assistant Secretary




*RE: Proposed Supplemental Budget*

On Monday, September 15, the Department of Social and Health Services submitted a proposed budget to the Office of Financial Management for the 2026 supplemental budget. This includes the Home and Community Living Administration’s budget proposal, an important step in the budgetary process where HCLA requests a few important items considered requirements in light of the difficult budget environment.

Washington state continues to face significant budget challenges. Increased demand for services, increasing costs of services and ongoing declines in forecasted revenues continue to impact DSHS HCLA and the State’s ability to make additional investments in our existing systems or seek funding for new programs to help ease the ongoing workforce and provider shortages we are all deeply familiar with. In addition, the passage of H.R. 1, One Big Beautiful Bill Act at the federal level has created reductions in federal funding which will require legislative decisions in this upcoming session. For these reasons, HCLA’s budget requests for the 2026 supplemental are limited.

Here are some highlights:


* *Reimagine DSHS (No cost): *As you will recall, in May 2025 DSHS began a time limited strategic initiative called “Reimagine DSHS.” This project aims to realign our organization to best meet the increasing needs of Washingtonians. As part of the first phase, the Aging and Long-Term Support Administration, Developmental Disability Administration and the Behavioral Health Administration were all dissolved and their functions were reorganized into two new administrations, the Home and Community Living Administration and the Behavioral Health and Habilitation Administration. This no cost decision package requests the budget be reorganized and funding and programs be reallocated under the two new administrations.
* *Developmental Disability Community Services Financial Eligibility FTEs ** *($2.5M GF-State). **Financial eligibility staff for the Developmental Disability Community Services were funded on a one-time basis in the 2022 Supplemental Budget and again in the 2023-25 Biennial Budget. These project staff were critical for meeting federal rule requirements and improving the timeliness and accuracy of application processing, eligibility reviews, and case maintenance updates for DDCS clients. These positions were not continued in the 2025-27 biennial budget resulting in significantly higher caseloads and delays in processing of financial eligibility determinations. With the temporary eligibility workers, the ratio of workers to clients were 1 to 952 for Fiscal Year (FY) 2025. As of July 1, 2025, the ratio will be 1 to 1,714, which is a substantial increase expected to increase eligibility timelines for DDCS clients.
* *Legal Support for Residents of Long-Term Care Facilities ($2 million GF-Federal)*. The Office of Civil Legal Aide (OCLA) has been working with the Department on setting up legal supports for Medicaid residents of long-term care facilities who are involuntarily discharged, similar to the supportive programs provided to low-income renters in Washington state under the landlord tenant act. This decision package will allow full implementation of this program that is required to meet the federal Home and Community Settings Rule.
* *Increasing funding for telecommunications equipment (Additional $200,000 GF-State).* The Office of Deaf and Hard of Hearing (ODHH) provide telecommunications equipment to Washingtonians who are Deaf, DeafBlind and hard of hearing and need the equipment to access their community and government services. Forecasted equipment costs have increased, and this additional funding will allow ODHH to maintain service levels in light of increased equipment costs.
* *Funding to continue offering Dan Thompson Community Grants ($2M Dan Thompson Account).* The Dan Thompson Memorial Developmental Disability Community Services Account was established in RCW 71A.20.170 by the legislature in 2005. This grant program was allocated $2 million for the biennium, all of which has been awarded to community partners. DSHS is requesting additional funding from the account to be able to provide additional grants. More information on this grant program and awardees is available here [ [link removed] ].

This is not a complete list. To see DSHS decision packages in full, please click here [ [link removed] ]. Please note that the state budget is still appropriated as Long Term Care (050) and Developmental Disabilities (040).

*This is the first step of a long process that begins with department requests. The next step is the Governor’s office will prepare a proposed budget that will be released by mid-December. The legislature is making decisions in the 2026 session which will be appropriated in the final operating budget.*

Thank you, Bea Rector Assistant Secretary Dept. of Social and Health Services Home & Community Living Administration








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