Racine proposes competition for designated agencies

File: Secretary of Human Services Doug Racine speaking with Rep. Patsy French, D-Orange, Addison-1. Photo by Josh Larkin.

File: Secretary of Human Services Doug Racine speaking with Rep. Patsy French, D-Orange, Addison-1. Photo by Josh Larkin.

UPDATE: Rep. Ann Pugh, chair of the House Human Services Committee, reported that after discussions between the designated agencies and the Shumlin administration, the proposal to require the designated agencies to compete for funding has been taken off the table.

Doug Racine, the secretary of the Agency of Human Services, read the riot act to the state’s designated agencies – the nonprofits that provide mental health programs and services for the developmentally disabled.

Racine proposed a rule change that would require the agencies to compete for funding through performance-based contracts. He told the House Human Services Committee on Wednesday that the 17 agencies, which he called “regional monopolies,” need to become more flexible and more accountable to the state.

Racine said the state needs to be able to measure the results of the designated agencies and determine “what we’re getting for the money.”

“We have a reality to deal with,” Racine said. “The designated agencies receive $280 million a year — out of $2 billion from the budget for the Agency of Human Services. Next year could be even more difficult (budgetwise) than this last year in which we’ve already lost federal funding.”

Gov. Peter Shumlin, a Democrat, has already asked the designated agencies to take an $11 million cut in fiscal year 2012.

Floyd Nease, executive director of the Vermont Association for Mental Health, said in an interview that the new proposal from AHS to allow private companies to compete with designated agencies for state funds would “deconstruct” the system of care.

Racine predicted that because President Barack Obama has proposed federal budget cuts to the Community Services Block Grants and the Low-Income Heating Assistance Program, that the state would be in much more dire straits next year.

“There will be intense pressure to make up the money,” Racine said. “This could get really ugly. If that is the case, this would be easier to deal with now.”

Racine pointed to a study from 2007 from the Pacifica Health Groups that stated the annual funding for the designated agencies would increase 8 percent a year just to maintain the status quo — absent reform. If the state wanted to address unmet demand the cost would be 12 percent, he said.

“We have a problem,” Racine said. “How do we get through these difficult times, without hurting Vermonters. There’s nothing left we can do except cut services.”

Julie Tessler, executive director of the Vermont Council of Developmental and Mental Health Services, told the committee that under the proposal, services would be privatized and potentially diminished as groups compete for funding.

Racine said his intent was not to privatize the system.

When he arrived at the agency, Racine said he found that the performance-based contracts that were supposed to be developed under the last administration hadn’t been put in place. “We have the authority to do it, but it hasn’t been done,” Racine said.

Rep. Topper McFaun, D-Barre Town, asked why the agency didn’t move ahead with the contracts and use them as a tool to measure the effectiveness of the designated agencies.

“Until now, I thought the agencies were doing a good job,” McFaun said. “Why not use the tools you have before you start adding (new requirements in statute)?”

Racine said his comments were not a “condemnation or criticism of the services they are providing.”

“When we closed down Brandon (training school) we asked the designated agency system to take on serious cases and there are still gaps in the system.”

Racine said he is aware of people with developmental disabilities and mental illness who become assaultive when they are in crisis and end up in the corrections system, which is incapable of dealing with inmates with mental illness.

“The police show up and they don’t know what to do, so they send them to jail,” Racine said. “That’s a gap in the system. We need to do a whole lot better than we have.”

Tessler said the designated agencies respond to crises all over the state, but that the system is too under-resourced to handle the scope of the problem.

Editor’s note: A write-through of this story was posted at 9:18 a.m.

Anne Galloway

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6 Comments on "Racine proposes competition for designated agencies"


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Renée Carpenter
5 years 10 months ago
This sounds like the beginning of a Vermont Social Safety Net “meltdown” to me, brought to us by Governor Peter Shumlin’s administration and the media that love them. The Vermont public–expressed through polling, calls to legislators, rallies, letters & comments to vtdigger.org, etc– wants to see progressive tax increases and no more cuts to human services. (This is also true in National polls, where 80% of the public believes corporate and other wealth needs to be taxed, pay their fair share.) The Times Argus Editorial today and Shumlin’s commentary yesterday (doesn’t the governor get enough press through paid PR staff?!)… Read more »
Raymond Hathaway
5 years 10 months ago
There isn’t much more that can be said than what Renee Carpenter has written here. The only thing that I can add is to point out the thoughtlessness of Secretary Racine saying that “How do we get through these difficult times, without hurting Vermonters. There’s nothing left we can do except cut services.” I am a reasonably intelligent person, so if I am missing something, someone please tell me how cutting services isn’t going to hurt Vermonters. Vermont used to be an intelligent, progressive state, right from its founding until about ten years ago. I am not sure how we… Read more »
5 years 10 months ago

It saddens me to see Shumlin morphing into Obama.

Nicole LeBlanc
5 years 10 months ago

Shumlin needs to take a political risk and do and raise taxes by 15% for at least 4 years to stop further erosion of services for the developmental disability community. America’s Wealth needs to be rebalanced.

Lauren Norford
5 years 10 months ago

Between the federal cuts proposed to Planned Parenthood, Head Start, WIC, heating assistance, and the block grants, and our state’s proposed cuts to mental health services, the “perfect storm” is building. Community members that are already struggling, and were already struggling before the economy tanked in 2008, will face impossible barriers. Things are already bad and they will get much worse if all these cuts go through.

What’s shocking to me is that many of these proposals are made by Democrats.

Christian Noll
5 years 10 months ago
Way to go Renee ! The local media is unquestionably controlled, bias and limited. Americans, unlike many other westernized nations, tend to omniverously swallow what is and is not presented to them. It is sad to see such misinformation coming from what used to be at least “semi-credible” sources. “The police show up, and they don’t know what to do, so they send them to jail.” That’s correct. That’s exactly what they do. In Vermont, our inmate/prisoner population has more than quadrupled in just twenty years alone. I’m saddened to say that this is a cash cow for the state’s… Read more »
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