FY2010 and FY2011 Update

Policy and Budget CommitteeJune 7, 2010

Table of Contents

I. FY10 Budget UpdateSpending UpdateSupplemental Budget Signed by

Governor II. FY11 Budget Process Update

Senate FY11 RecommendationsSenate Budget Impacts

III. Next Step: Conference

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FY10 Budget UpdateSpending

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FY10 Budget Encumbered Expended Total Committed Uncommitted %

Uncommitted Administration 3000-1000 $ 11,622,212 $ 224,238 $ 10,198,348 $ 10,422,586 $ 1,199,626 11.51%Access Management 3000-2000 $ 6,358,771 $ 393,144 $ 5,953,024 $ 6,346,169 $ 12,603 0.20%Supportive 3000-3050 $ 77,836,888 $ 9,062,848 $ 64,533,014 $ 73,595,863 $ 4,241,025 5.76%TANF Related Child Care 3000-4050 $ 116,232,279 $ 235,244 $ 115,997,036 $ 116,232,279 $ - 0.00%Low Income Eligible Child Care 3000-4060 $ 260,954,672 $32,565,036 $ 186,983,245 $ 219,548,281 $ 41,406,391 18.86%Head Start Programs 3000-5000 $ 8,000,000 $ 973,905 $ 7,026,095 $ 8,000,000 $ - 0.00%UPK 3000-5075 $ 8,000,000 $ 1,849,746 $ 5,933,220 $ 7,782,966 $ 217,034 2.79%Quality Supports 3000-6000 $ 14,032,568 $ 2,051,193 $ 11,932,314 $ 13,983,507 $ 49,061 0.35%Mental Health 3000-6075 $ 1,000,000 $ 223,260 $ 764,316 $ 987,576 $ 12,424 1.26%Family Engagements 3000-7050 $ 5,000,000 $ 466,120 $ 4,526,075 $ 4,992,195 $ 7,805 0.16%

$ 509,037,390 $48,044,735 $ 413,846,687 $ 461,891,422 $ 47,145,968 10.21%

Description

On May 21st, the Governor signed a supplemental budget (Chapter 112 of the Acts of 2010).

Sections 37 and 38 expand transferability from the income Eligible account and DTA-Related account.

Prior to passage, EEC was limited to transfer a maximum of 3% from Income Eligible account to the DTA account and provide a 30 day notice to the legislature prior to any transfer.

With the passage of Chapter 112, EEC can transfer up to 10% ($26M) and need only to provide a 15 day notice to the legislature.

This flexibility allows EEC to cover the full $25M deficiency in the DTA and Supportive accounts and ensure that providers do not have to wait for payment of bill.

We have requested the transfer already. We will be able to transfer funds on June 10.

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FY2010 Budget Update: Governor Signs a Supplemental Budget

FY11 Budget Process Update: Senate FY11 Recommendation

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Descriptor FY10 Approp

FY11 Maintenance Request to

H/SWM Governor House Final SenateAdministration 11,622,212 12,079,875 11,889,917 11,785,583 $11,622,212

Access Management 6,358,771 6,358,771 5,933,862 5,933,862 5,933,862

Supportive 77,836,888 85,713,746 90,286,814 89,786,814 85,713,747

TANF Related Child Care 116,232,279 136,927,436 127,358,313 127,358,313 127,358,313 Low Income Eligible Child Care 260,954,672 233,527,426 233,601,807 233,601,807 233,601,807

Grants to Head Start 8,000,000 8,000,000 8,000,000 8,000,000 8,000,000

UPK 8,000,000 8,000,000 9,000,000 8,000,000 8,000,000

Quality Supports 14,032,568 14,032,568 4,434,038 15,390,639 15,390,639

Mental Health 1,000,000 1,000,000 1,500,000 1,000,000 750,000 Family Supports and Engagement 5,000,000 5,000,000 17,025,836 5,000,000 5,000,000

509,037,390 510,639,822 509,030,587 505,857,018 501,370,580

• The Senate adopted several amendments to increase the Income Eligible and the Quality Supports line items, to match the House appropriation level.

FY11 Budget Process Update: Senate Budget Impact

For the most part the Senate matched the Governor and House FY11 budget recommendations. The Admin account and the Mental Health account, however, were reduced lower than the House recommended level.

Administration: Appropriation would force administrative reductions and potentially force a staff reduction of 6 positions.

Access Management:  Recommends the Governor and House FY11 levels, but does not include House language that mandates CCR&Rs manage the waitlist.

Supportive:  Though funded at requested maintenance, the maintenance number was submitted prior to the new Supportive Priority Population RFP; therefore, this account may have a deficiency.

DTA Related Child Care:  Like the House, the Senate recommendation could have a $6M deficit from projected FY11 need.  At this level we estimate that we will run out of funds after May, 2011 billing.

Income Eligible:  Like the House, Senate funding level enables us to support the 4,500 kids for whom we opened access in February and March and the homeless slots planned.

Mental Health: The Senate recommended appropriation level would result in a reduction in grants offered to the ten programs that received funding in FY10.

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The Next Step: Conference3000-1000 Administrative Account

Appropriation: House: $11,785,583 - Limited flexibility and potential staff reductions. Senate: $11,622,212 - Severe administrative restrictions and potential staff

reduction of 6 personnel. Senate budget does not include funding for the CBA they passed a few months ago. This unfunded mandate, on top of other increasing costs, makes it unlikely that EEC could maintain existing staff levels. We could lose licensors resulting in an impact on safety and quality for child care programs.

Recommendation: Support House level - Overall, the House recommendation of $11.78M would enable EEC to come closer to maintaining services and support collective bargaining costs and other liabilities in FY11. The Senate recommendation would force severe reductions in the department which has already seen its FTE levels drop from 178 to 161 (9.6%) since FY09. EEC therefore requests that the conferees accept the House’s recommendation of $11.78M.

Language: House: Basic boilerplate language, but also includes reporting language for

caseload and average costs. Senate: Senate does not include this specific reporting language but adds

language that would require a report due by September 10 on cost-efficiencies EEC has gained since FY2010.

Recommendation: Senate Language - The Department requests that both reporting requirements not be included in the FY2011 Conference Report.

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The Next Step: Conference3000-2000 Access Management

Appropriation: Not in Conference House and Senate: $5,933,862 - Fully funds anticipated FY11

cost. Language:

The House added language that would reverse progress made when EEC, in response to the single-state audit, re-bid the Access Management contract. The Department requests that the House language (“and provided further that voucher management, information and referral, and enhanced consumer education shall be provided by the same agency” ) for the Access Management account not be included in the Conference Report.

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The Next Step: Conference3000-3050 Supportive Account

Appropriation: House: $89,786,814 - Fully funds anticipated FY11 cost. Senate: $85,713,747 The Senate amount was the original

maintenance EEC request prior to priority population being amended. This initiative added an additional $2.4M to the Supportive account. The Senate level would result in a deficiency (probably after May billing has been processed in June of 2011). The Department requests that the House funding level recommendation for 3000-3050 prevails in Conference.

Recommendation: House - The House appropriation supports anticipated FY11 costs.

Language: Both House and Senate recommend the 6 month transitional

language that EEC requested. The only difference to be decided is that the House requires a 15 day notice if money is to be transferred to this account in FY11 and the Senate requires a 30 day notice.

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The Next Step: Conference3000-6075 Mental Health Account

Appropriation: House: $1,000,000 - Provides maintenance funding.

Senate: $750,000 - This reduction results in fewer grants supporting crisis assistance provided to children in need of services and the inability to offer a statewide system to address the expulsion of preschoolers required by legislation.

Recommendation: Support House level.

Language: Not in conference.

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The Next Step: ConferenceAccounts not in Discussion

The following accounts are not in conference, or have only minor differences within language that must be settled in conference committee:

3000-4050 DTA-Related: Both House and Senate recommend $127M and have similar budget language.

3000-4060 Income Eligible: House recommends $233.6M in FY11 and Senate proposed $233.52 (or $74K less than needed), which should be enough to annualize the original 4,500 children EEC opened access for beginning in February of 2010.

3000-5000 Head Start: Both the Senate and the House recommend funding Head Start at $8M.

3000-5075 UPK: Both the Senate and the House recommend funding UPK at $8M.

3000-6000 Quality Supports: Both the Senate and House recommend funding Quality supports at $15.3M, which includes moving the $1.3M LPC Supplemental Supportive grant from Income Eligible to Quality in FY11.

3000-7050: Family Engagements: Both the Senate and the House recommend funding UPK at $5M.

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