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Thank you for your continued partnership with DSHS to ensure that we provide meaningful support and services to individuals with intellectual and developmental disabilities. Yesterday, DSHS submitted our budget proposals to the Office of Financial Management, in anticipation of a difficult budget year and continued financial strain.
Earlier this summer, OFM issued budget instructions to state agencies for the 2027-29 biennial and 2027 supplemental budget submittals. The instructions highlighted several key factors that have contributed to a significant budget shortfall in the next biennium. Among those key factors were:
- A 39% increase in inflation over the last decade. We see this in rising costs for utilities, fuel, construction and materials and other necessities. Inflation weakens the state’s purchasing power and impacts the state’s budgets.
- A 14.2% population increase, more than one million people, between 2015 and 2025. As the population grows, the number of individuals requiring state services increases, especially as economic inflationary pressures strain individual and family budgets.
- Recent federal changes signed into law by the President that have widespread funding impact on services to clients, staff and the systems that support public assistance programs.
- Ongoing economic uncertainty.
As we look ahead to a challenging financial year, I want to keep you informed. Please remember that this is the first step in the long process of getting a final budget. OFM will review our requests and build the Governor’s budget over the next several months. We expect to see the Governor’s proposed budget in mid-December, which the Legislature uses as they start the biennial legislative session in mid-January.
Please know that preparing a budget during a difficult fiscal climate requires hard choices and immense effort. We have done our best to align with the Governor’s budget instructions and think more deeply about how we can adjust our work to be more financially stable in the future.
Here are some details about the budget proposals that were delivered to OFM yesterday.
Maintenance Level Growth
An example of continued investment, we are asking for approximately $392M in caseload, utilization, and workload funding. This represents the continued growth in the clients we serve, addresses the growing cost of providing those services, and the need for additional staff to ensure those services are provided effectively.
Savings and Reductions
Functional Eligibility Adjustment: $13.4M in total savings.
DDA has experienced significant caseload growth over the last decade. The state has chosen to create one of the country’s more accessible long-term and developmental disabilities care systems. However, the entry point for services is set at a level of need that cannot be sustained given the current budget shortfall and the continued growth in the older-adult and disability populations. The proposed request is designed to impact people who need assistance with fewer activities of daily living and allows DDA to continue serving individuals with higher acuity.
Other Targeted Investments
HCBS Access Rule Compliance: $9M in total investments.
This request is to comply with the Centers for Medicare and Medicaid Services requirements issued April 2024, Ensuring Access to Medicaid Services. Initial implementation funding was provided on a one-time basis; this request sustains the work needed for continued compliance and meet upcoming deadlines established in the rules.
Dan Thompson Account Fund: $2M in total investments.
This request is for an additional $2,000,000 from the Dan Thompson Developmental Disabilities Community Services Account for community-based grants that increase access to supports and services for individuals with intellectual and developmental disabilities throughout Washington state.
We won’t have a clear understanding of what the final budget and final impacts on our clients and our partners will be until the budget is signed at the end of legislative session. We will keep you updated as the process unfolds.
Thank you again for your partnership.
Dana Phelps
Interim Assistant Secretary
Developmental Disabilities Administration
Department of Social and Health Services
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