California: State's budget lag threatens services for disabled clients

The San Diego Union Tribune ^ | August 20, 2002 | Ed Mendel

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SACRAMENTO – Because the state has gone nearly two months without a budget, a San Diego nonprofit agency serving 14,400 developmentally disabled clients is notifying contractors and staff that they may not be paid after Sept. 1.

Two similar regional agencies in South Central Los Angeles and Sacramento, which have even greater cash-flow problems, are sending out notices saying they may have to shut down at the end of the month because of the state budget deadlock.

Since the new fiscal year began July 1, the state has been unable to pay 21 nonprofit regional centers for the developmentally disabled that spend $2.2 billion a year providing services for 170,000 clients.

Most of the regional centers were able to borrow enough money to cover two months of operations. But now the banks are beginning to balk at lending more money to the private nonprofit regional centers.

"We are really concerned that services are going to start to be jeopardized come September," said Dan Clark, director of community affairs for the San Diego Regional Center.

The centers serve clients with ailments such as mental retardation, autism, and cerebral palsy. The centers provide medical care, therapy, living assistance, transportation and other services.

A $99 billion state budget approved by the Senate has stalled in the Assembly, where Republicans, who must provide at least four votes to approve the budget, want to replace a $3.9 billion tax increase with spending cuts.

The Republicans say cuts are needed to reduce a deficit of nearly $10 billion forecast next year by the nonpartisan Legislative Analyst's Office if the Senate budget is enacted.

Gov. Gray Davis, who is believed to have two of the four Republican votes, has been talking to Assemblyman Keith Richman, R-Northridge. Richman had no comment on the talks yesterday.

The San Diego Regional Center obtained a $16 million loan from Union Bank, said Clark, and expects to pay about $20,000 in interest that will not be reimbursed by the state.

"We are good until Sept. 1 with all of our obligations," said Clark. "But after that, we may not be able to pay all of our bills."

Union Bank has lent $220 million to 18 of the 21 regional centers, said Bertha Gorman, spokeswoman for the state Department of Health and Human Services.

The centers decided last weekend they would make their plight public, hoping to add pressure for budget action.

"We don't know what the banks are going to do," said Bob Baldo, executive director of the Association of Regional Center Agencies.

A spokeswoman said the South Central Los Angeles Regional Center has been talking to Union Bank and other lenders, but has not been encouraged by the discussions so far.

"We are letting them know that as of Sept. 1, we will be closing our doors if there is no budget passed," said Marsha Mitchell, the South Central center spokeswoman.

[Ernest_at_the_Beach]

This should be blamed on Davis. But watch the Media try to lay this on the Dastardly Republicans!

[Ernest_at_the_Beach]

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[B4Ranch]

When the illeagls start complaining that Mom & Dad are being fed or driven to their dental appointments Davis will fold.

[goldstategop]

Yup. I think I'll wait til the Rats constituents start turning up the heat. When it gets really desperate, GrayDown and Herb Wesson will finally cut their losses and strike a deal with Republicans.