Social service cuts painful

Posted: Sunday, April 07, 2002

It may not amount to the shootout at the OK Corral, but the stage has been set for a legislative showdown over proposed cuts to state social service programs between those who say government is too big and must be cut and those who say additional cuts are just too painful to bear.

When the smoke clears later this month, will the fiscal year 2003 state operating budget leave some of the Alaska's most vulnerable citizens suffering the pain of reduced state aid?

That's the million-dollar question at the Depart-ment of Health and Social Ser-vices and among many state lawmakers facing the difficult decisions they believe necessary if Ala-ska is to bridge a looming $860 million fiscal gap this year, and as much as $1.2 billion next year.

The House version of the 2003 spending plan, House Bill 403, was adopted by the Republican-led body March 18 and sent to the Senate. Democrats called proposed cuts to social services severe. Testimony during public hearings preceding passage largely opposed cutting social service agencies. Indeed, many people said they were willing to pay taxes if it meant maintaining vital services.

The Senate is expected to complete its version of an operating budget -- Senate Bill 289 -- in about two weeks. A conference committee of the two legislative chambers then will attempt to resolve any differences.

Such could arise in the Health and Social Services portion of the budget, Sen. Jerry Ward, R-Nikiski, predicted Friday.

"(The Senate) will attempt to fund the Health and Social Ser-vices budget at the same level as last year, but no more," he said.

To do that, the Senate may reallocate funds from the department's administration to "in-the-trenches" programs, where social service workers provide direct aid to clients, Ward said.

Cuts to administration, however, already have been proposed in the House version.

A problem facing budget writers is that the department's budget includes unavoidable automatic in-creases -- greater client numbers, contractual increases, rising costs and the like -- that must be paid.

"This is the one budget that may actually go up. We will reduce other parts of the budget" to cover those costs, Ward said.

The Senate bill is in committee, where members are addressing problem areas, including recent increases in Medicaid costs brought on by changes in federal law.

"Those are issues we have got to come to grips with," Senate Majority Leader Loren Leman, R-Anchorage, said. "Health and Social Services cost increases are forcing decreases in other areas of the budget."

Ward said a conference committee should take perhaps two days to iron out any differences between the two versions. In the eyes of some Democrats, however, the job may not be so easy.

The version eventually adopted by the Republican-dominated Senate may be fairly close to the House version, but the divide between Democrats and Republicans over appropriation levels will still remain, said House Minority Leader Ethan Berkowitz, D-Anchorage.

"A budget that targets the poor, the sick, the needy and the vulnerable clearly has a ways to go before we could support it," Berkowitz said.

Democratic support could hinge on a quid pro quo common to the endgame politics of legislative sessions -- their minority votes to balance the budget by tapping the Constitutional Budget Reserve in exchange for the majority backing off on budget cuts.

Some House majority members have said they passed their version of the budget on to the Senate, albeit with problems, so they could begin work on a long-range fiscal plan. Prior to the session, House members had hoped to advance on a long-range plan prior to working on the budget, but that proved politically impossible in the face of the Senate majority's position that the public wants further cuts in government before any consideration is given to such things as taxes and tapping the Alaska Permanent Fund earnings.

"I call it budgetary sadism -- make the public feel the pain in order to move forward on a fiscal plan," Berkowitz said. "I disagree with that approach. Responsible budgeting means taking care of responsibilities."

Jay Livey, commissioner of the Department of Health and Social Services, said he expects to be testifying Tuesday before the Senate Finance Committee's Health and Social Services Subcommittee. He is not optimistic about the final outcome of the 2003 budget.

"My gut feeling is we came out of the House with such a bad budget it will be hard to fix it all," he said. "I don't know what (the senators) are going to do."

He especially lamented cuts in the child welfare system, public health and mental health.

"You take a system like the child protection system -- it relies on all the parts working together," such as investigators, case workers, paying for foster care and residential child-care beds, subsidizing adoptions, family preservation grants and the like. "The House took chunks out of all those pieces. The whole system over time will start to crumble."

Annalee McConnell, director of the Office of Management and Budget, also has doubts that enough cuts in social services would be restored to make a difference.

"The magnitude of the cuts is much larger than what's been seen in the past," she said. "It's hard to envision how the Legislature is going to address so many different critical public services."

The Republican-led Legislature recently completed a five-year plan that leaders say reduced state spending by $250 million. McConnell said the easy cuts have already been made.

"As you continue cutting, you're inevitably forced, lacking other options, to have an impact on direct services to the public," she said.

Restoring a few cuts may not be enough to ease the real "on-the-street" impacts on the public, she said, adding that impacts might not be obvious immediately, but will arise as time goes on in greater demands on more expensive social services. She likened the system's need for continued funding to maintaining a building or road, where foregoing timely repairs

causes much more costly major maintenance later on.

"The cost of not doing these things is staggering," she said. "You won't see it all at once, but it is going to be there."

McConnell said she regrets that lawmakers were unable to develop a long-range plan before tackling the operating budget -- a sequence she said would have made better sense and produced a better budget.

"When the timing was switched, it created a very different situation. There is no question that the leadership in the House was saying that the public needs to see how difficult it will be if we hold the line on the number of dollars," she said.

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