DHS begins fiscal 2012 budget process

DES MOINES – Social service providers warned Wednesday that staff cutbacks and service reductions will be a likely outcome as costs escalate even if state officials can provide them status-quo funding in fiscal 2012.

Some of the nearly 30 presenters at a budget hearing held by the Iowa Council on Human Services worried that dire circumstances for agencies serving Iowa's most vulnerable populations could be in the offing if federal stimulus money to bolster Medicaid and other programs is not extended beyond December.

That would spell trouble as well for Iowa's Department of Human Services, which predicated a good share of current year funding on a continuation of the extraordinary federal help, but DHS Director Charles Krogmeier was cautiously optimistic Congress will come through with an extension that carries a $120 million impact for his agency through next June 30.

Given the backdrop of uncertainty, it was no surprise that participants in Wednesday's budget hearing tempered their expectations for fiscal 2012, although their still were appeals to restore funds cut last fiscal year when state tax collections plunged, to increase funding in state-mandated service areas, and to work in partnership to prioritize or ease requirements and regulations for greater efficiency.

“Recognizing the economic times we're in, I would not be so bold as to stand up here and ask for additional dollars,” said Cheryl Goodwin, president and CEO of Family Resources, Inc., of Davenport, an agency that provides core services to children and families in need.

However, she called for greater collaboration between government and private-sector agencies to eliminate service overlap or duplication that create barriers for families. She said essential services should be prioritized and compensated at actual cost, otherwise she said it would be difficult for her agency to continue providing 24-hour care for Iowa's most-difficult children.

Craig Wood, vice chairman of Iowa's Mental Health and Disability Services Commission, said counties are facing “a major funding crisis” in providing mandated services and need some of the funding cut restored over the next three years as a “reasonable” approach to closing a $20 million gap.

“The last two years have been hard on Iowa and Iowans. Ironically, the combined impact of natural disasters and economic crises has created an even greater need for mental health and supportive services at a time when the revenues needed to support them are shrinking,” he said.

Others, like Shelley Chandler of the Iowa Association of County Providers, said costs continue to rise and many providers that underwent modest rate cuts last year on top of “years of underfunding” for Iowa human services system are facing the task of fundraising – not for enhanced services or capital projects – to maintain daily services.

Krogmeier said he expects the fiscal 2012 budget directive will be for status quo funding levels, although he said “there might be some room for some relatively minor changes” once state officials have a better sense of the savings from an early-retirement incentive that reduced the number of state employees and a multi-year government reorganization initiative.

“While the economy is getting better, it's getting better slowly,” he said.

Krogmeier said it was clear most of Wednesday's presenters were mindful of the financial realities facing policy-makers as they begin to shape the state's fiscal 2012 budget.

“We didn't tell them not to ask for additional money, but we didn't suggest there would be additional money and that's the tone of what most of them are presenting – they'd like to see services maintained in some way,” he said.

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