The Oklahoma Department of Human Services (DHS) made waves in April when Director Ed Lake sent a letter to employees and providers warning that DHS is facing “cuts we simply cannot make without significant consequences for the people who depend on our assistance.”
The Department of Humans Services is Oklahoma’s largest state agency, responsible for everything from child support enforcement to providing nutrition and transportation services to aging Oklahomans. Following large cuts going into the current fiscal year and two state revenue failures, the agency faces a budget hole of about $150 million. A hole of this size has put important services for the elderly and people with disabilities on the chopping block.
The ‘easy’ cuts have already been made
This truly dire budget situation is the result of cumulative funding cuts. In June 2015, DHS enacted a round of cuts to accommodate a $45.2 million agency budget hole. Due to subsequent loss of federal matching funds, the actual cuts actually totaled $60.8 million. As shown on the chart below, DHS was able to restrict most of the damage to internal cuts, with $38.9 million (64 percent) achieved through voluntary buyouts and eliminating unfilled positions. Another $13.6 million involved allowing a number of contracts to lapse, and $5.5 million came from reducing rates for providers in the developmental disabilities and aging waiver programs by 3.5 percent – a reduction that has squeezed private providers already struggling to hire and retain qualified staff. Only 5 percent of the cuts ($2.8 million) directly reached client services.
Then in December 2015 and March 2016, midyear revenue failures prompted two rounds of cuts totaling more than $40 million in state dollars ($57.7 million including lost federal funds). Although the majority of the cuts were still restricted to internal operations ($43.7 million), including elimination of more unfilled positions, a postponed raise for child welfare workers, and reduced contracts, a greater proportion directly affected clients, in the form of postponed supplemental payments to Oklahomans who are aged, blind, or have disabilities ($6.4 million).
The combined effect of those cuts has left DHS with precious little left to cut in its FY 2017 budget. Although the agency’s exact appropriations won’t be known until lawmakers develop a state budget, Lake’s letter warns that upcoming cuts could be “potentially disastrous actions that will most assuredly compromise our ability to carry out the core services of DHS.”
DHS’s funding situation is further complicated by Oklahoma still being under a court order to improve the child welfare system. As a result, child welfare has largely been spared cuts and has continued to hire in the midst of an agency-wide hiring freeze. But Director Lake’s letter warned that it may not be possible to spare child welfare in the next round of cuts.
These reductions could have devastating consequences to some of the most vulnerable Oklahomans. DHS services help keep 23,000 elderly Oklahomans in their homes rather than in nursing facilities, provide care and services for Oklahomans with disabilities, and help fund child care for more than 30,000 children.
The next round of cuts can’t avoid hurting the most vulnerable seniors, children, and Oklahomans with disabilities
These programs are already struggling. For example:
- The Advantage Waiver program, which provides daily care to Oklahomans who are elderly or have disabilities in their homes at a fraction of the cost of nursing home care, is already at risk due to proposed Medicaid provider cuts. At the same time, provider cuts could shutter nursing homes, leaving these Oklahomans with nowhere to go. The waiting list for Oklahomans with disabilities to receive in-home services is at an all-time high, with thousands of people on the list waiting nearly a decade for care. Director Lake wrote that DHS may be forced to reduce provider rates for both these programs even though these rate reductions, “are certain to have devastating effects on the community service agencies that provide these services and our clients who so greatly benefit from being able to stay in their homes or in community placements.”
- Subsidized child care already reaches far fewer families than it did a decade ago, making it much harder for parents working for low wages to keep a job and still care for their children. Now DHS is considering reducing child care subsidies even more and adding fees on child care facilities for licensing and inspections, which will also trickle down as increased costs for parents.
- Experts responsible for overseeing the court-ordered child welfare reforms have warned that the state’s child welfare gains are fragile and that cutting child welfare now could be “a shattering setback.” That DHS is now at the point of cutting core services, including court-ordered reforms, speaks to how dire our budget situation is.
Years of depressed revenues have left Oklahoma woefully unprepared for what it turning into an unprecedented disaster. Without meaningful steps to bring in more recurring revenue, such as rolling back tax cuts, ending tax breaks, and enacting targeted tax increases, services for our most vulnerable neighbors will continue to crumble.