DHS Q&A on the budget crisis

To get a better picture of the budget crisis Catalyst is posting a DHS Q&A agency email so readers can see what agencies are saying in their own words. Nothing explosive enclosed but important to see what is being said.

Q & A on the budget shortfall
By Bruce Goldberg, M.D.
Director Department of Human Service to DHS staff

Here are some of the frequently asked questions:

Are these cuts really going to happen?

The budget shortfall is very serious, and there is not enough money to cover $577 million. The state simply doesn’t have it. We are planning now on how to implement these reductions.

But what about federal assistance?

As you may have heard, Congress is looking at assisting states caught short by the recession and is considering whether to extend the federal stimulus dollars for six more months. If that happens, the increased dollars we are currently receiving to fund Medicaid programs would continue that much longer and free up general fund dollars for other purposes in the state budget. But I have to be honest: We do not know if that is going to happen, and we cannot count on it. I am very concerned about people being misled into thinking everything will be okay because the feds will bail us out. If it happens, it will give Oregon some breathing room until the next shortfall or budget cycle. But I’m afraid it’s a long shot.

What is the next step?

The Governor is reviewing the list of cuts submitted by the agency. He has the authority under Oregon law to accept the entire 9% of reductions originally requested or to reduce that percentage. He has said that he trusts the agency directors to make reductions that will do the least amount of harm to the state, and that is the approach we have taken. He will make a decision soon about next steps, but I don’t know exactly when that will be. As soon as I know more, I will share that information.

At DHS, we are moving forward as if these cuts are going to happen on July 1. That means we are preparing letters to request waivers from our federal partners, preparing notices to clients, and taking the next step of analysis for our workforce reduction. If we don’t prepare now, if all or some of these cuts are implemented and we are not ready, our clients and employees will undergo even greater hardship.

What was the rationale for the cuts that you made?

With a shortfall this serious and at this point in the recession, there are three options: reduce or eliminate services, reduce payments to providers and counties, and reduce workforce. No one thing will cover the entire shortfall.

To address the shortfall, we worked to create a list that would cause the least amount of disruption to Oregon families and vulnerable citizens and minimize the loss of federal funds. The only way to reach a general fund reduction of $158 million was to reduce services, provider payments and workforce.

Are there going to be layoffs?

I believe it is likely there will be some layoffs. Most of the 5% DHS is reducing will be by attrition and holding vacancies open, but I don’t think we can meet the reduction target without some layoffs.

When will we know what the layoffs will be?

After submitting the overall budget reduction plan, we are now doing a deeper level of analysis and will know soon exactly how many positions will be laid off. I will say that most of the actual layoffs would be in the Administrative Services Division because their budget is mostly made up of staff. There simply weren’t enough vacancies to get to 9% reduction without looking at some layoffs.

That said, we are having regular meetings with union leadership to look at any and all alternatives to the layoffs. This is going to be a very difficult situation for people, and I want to get information out as soon as possible; I promise I will share it when I have it.

How do we get the work done if we have fewer people?

This is part of the honest conversation we have to have with the people of Oregon. There are some areas where we simply cannot relax our standards — child safety, senior safety, the safety of patients at the state hospitals, for example.

However, we have to face the reality that there are areas where we will have to seriously prioritize our work. There are some functions that may be delayed; there are others that we’ll decide aren’t a priority right now. Determining those priorities is part of the work that is going on now.

At the same time, we also have to look at the way we do our work and what is possible. One thing we know how to do is solve problems. When our field offices were getting slammed with food-stamp applications, we changed the way we did business and reduced the backlog to same-day service. We were able to do that because front-line staff helped work out a better way.

I don’t want to minimize the impact of staff reductions. It’s going to be difficult. But I also know that as we look at working with reduced staff, we will have to be creative and support each other in our ideas and efforts to improve. The transformation of our agency is more important today than it has ever been.

I know this email doesn’t answer all your questions, but I do promise that I will keep you informed as we know more and keep the information on the intranet site current. And again, I want to thank you both for the work you are doing, but also for the feedback that you have provided to me as we go through this together. As you have other questions that you have, please do not hesitate to ask.