Challenges fall short

Jim Reardon, commissioner of the Department of Finance and Management

Developmentally disabled Vermonters face wait lists

Challenges for Change, the Legislature’s government restructuring effort, has been billed as a panacea for the state’s long-term budget woes. The Challenges are supposed to transform the way services are delivered for Vermonters – and produce significant savings.

But five months after the “transformation” began, the new budgeting system, which proponents say is designed to put services ahead of budgetary considerations, is still coming up $8 million short, and administration officials are using Medicaid money to partially fill the gap.

A number of the programs now under way may not produce significant savings until fiscal year 2012, according to lawmakers and an administration official. Changes in the way the state manages employee travel, postage costs and performance contracts, for example, are taking longer than anticipated to implement.

Though the state hasn’t hit the Challenges targets in fiscal year 2011, administration officials and members of the Government Accountability Committee deemed the Challenges process a success at a meeting on Monday.

Jim Reardon, commissioner of the Department of Finance and Management, is optimistic about the long-term impact of the restructuring on the state’s budgeting process. “If the cup is three-quarters full and one-quarter empty, you should always view it as three-quarters full and continue to say we’ve made great strides,” Reardon said. “We need to expand this effort.”

Several committee members said the Challenges approach to budgeting needs to be embraced across state government. They expressed dismay with negative public perceptions of the process, and they talked at length, as they have in previous meetings, about how to present the reorganization effort in more palatable terms.

Sen. Diane Snelling said most Vermonters support the idea of government reform. “We’re creating accountability in government,” she said.

Sen. Diane Snelling said most Vermonters support the idea of government reform. “We’re creating accountability in government,” she said.

Rep. Ann Manwaring, D-Wilmington, said she is concerned the Challenges are getting a “bad rap.”

“I think Challenges for Change is a whole new way of thinking,” Manwaring said. “The Government Accountability Committee needs to be a cheerleader in this process that moves us toward a way of doing business that has bright benefit for the people of the state of Vermont.”

An attorney for the Disability Law Project, Barbara Prine, said some of the proposals coming out of the Challenges look more like straight cuts in services, as opposed to purported improved efficiencies. She pointed to cuts in programs for developmentally disabled Vermonters as an example. In July, programs for vulnerable adults were cut by $1.5 million.

In order to save an additional $1.25 million, the Department of Disabilities, Aging and Independent Living has proposed introducing a waiting list for cognitively disabled Vermonters who would otherwise be institutionalized, who are being exploited or abused or whose caregivers have died, according to Prime. She told lawmakers about 50 people would be required to wait for access to “essential” services.

Challenges overview

When the Legislature passed the budget in May, lawmakers subtracted $37.8 million from the General Fund budget for fiscal year 2011. The Challenges gap was meant to be filled by a suite of new efficiencies that were to be introduced in seven different areas of state government. The bulk of the savings were aimed at Agency of Human Services programs for the poor, disabled, elderly and mentally ill. (Annual AHS expenditures totaled about $1.06 billion last year and represent the second largest area of state spending. Only education eclipses AHS spending, coming in at $1.138 billion a year.)

In fiscal year 2012, lawmakers and presumptive Gov.-elect Peter Shumlin’s administration must find $72 million in reductions (which will come from the $29 million in permanent savings identified in fiscal year 2011 and expanded restructuring efforts) – on top of resolving the $112 million budget gap caused by depressed, recessionary revenues.

Reardon describes the $5 million from the global commitment pool as a “one-time” bridge for fiscal year 2011.

See the Joint Fiscal Office 2011 budget visualization graphic.

On Monday, Reardon explained that $8 million out of the $37.8 million in hoped-for efficiencies for fiscal year 2011 hadn’t materialized yet. He told the Government Accountability Committee that $3.1 million of the Challenges savings remained “unidentified.” In addition, the administration has applied $4.943 million in “carry-forward” money from the state’s Medicaid block grant program known as “global commitment” to the Challenges spreadsheet.

Reardon describes the $5 million from the global commitment pool as a “one-time” bridge for fiscal year 2011. The state, however, still must find $8 million in reductions in fiscal year 2012, he said.

“I am trying to (strike) a balance of making sure I don’t come across with the impression that I’m taking my foot off the pedal in terms of Challenges for Change — I don’t want to send that message,” Reardon said. “At the same time, I don’t want to be in a situation where I come back to the Legislature or give to the next Finance and Management commissioner a problem without a solution.

“I identified what’s realistic in Challenges for Change,” Reardon said. “I want to bring back to the Legislature a balanced budget. That’s part of my thinking on the $5 million — I think that money is there.”

Reardon said the initial targets were too ambitious. “It’s going to take longer to realize the savings,” he said. “(This) is a good initial effort. People are working together, but it takes time.”

The Challenges target for the Department of Corrections, for example, requires significant investments in specialized mental health and substance abuse prevention programs and infrastructure, such as affordable transitional housing. All of those supports take time to implement, Reardon said. Though the state has provided new supports for inmates with significant, seriously functionally impaired inmates, among others, caseloads haven’t yet started to drop. Once programs are in place, Reardon thinks the targets will be feasible.

Wait list for developmentally disabled

At a meeting on Nov. 4, Brendan Hogan, interim commissioner of the Department of Disabilities, Aging and Independent Living, announced that his agency is faced with a $1.25 million shortfall. Of that, $400,000 is a carryover deficit from the previous year caused by an increased caseload; $850,000 is from an unfulfilled mandate under the Challenges for designated agencies, the regional nonprofit groups that provide mental health treatment and services for developmentally disabled adults.

The designated agencies told the administration they could reduce administrative costs by $500,000 if they could eliminate some paperwork requirements. Julie Tessler, executive director of the Vermont Council on Developmental Disabilities and Mental Health, said the target was unattainable.

The upshot? New developmentally disabled clients will be put on a waiting list for services, according to internal e-mails from DAIL. (Hogan did not return repeated calls for comment.) Until now, a contingency fund was used to ensure that new clients – who just graduated from high school, whose caregivers had died, or who are victims of abuse – have immediate access to care.

Prine said there has never been a wait list for “essential” services for developmentally disabled Vermonters before now.

In an e-mail, Marybeth McCaffrey, a DAIL official, argued the wait list is standard operating procedure. “The current state system of care plan authorizes this mechanism in times of insufficient funds,” according to McCaffrey.

State officials have said no one will be ineligible, Prine said. “It doesn’t do any good to be eligible if you’re not getting services,” she said

Snelling said she was unaware of the cut. “This is not some cruel invention,” Snelling said. “How can we do this without money?”

Rep. Cynthia Browning suggested that the issue be taken up in the budget adjustment process.