The California Senate Budget and Fiscal Review Subcommittee No. 3 on Health and Human Services convened on April 24, 2025, to discuss critical funding issues affecting local child support agencies (LCSAs) and disability service providers. The meeting highlighted the urgent need for maintaining full funding levels to support these essential services.

A key point raised during the session was the financial strain on LCSAs, which are required to generate savings each year to meet future obligations. This practice has led to consistent underspending, as current budgeting processes do not adequately cover unavoidable cost increases, such as cost-of-living adjustments and personnel expenses. The impact of recent budget cuts was also emphasized, with a $6 million reduction in state general funds resulting in a total loss of $18 million due to lost federal matching funds. Stakeholders urged the committee to prioritize restoring funding and to reaffirm commitments to ongoing workload reforms.

Barry Giardini from the California Disability Services Association expressed concerns regarding the implementation of a new rate model for service providers. He stressed the importance of ensuring that providers receive the full percentage of their promised rates, particularly as the state faces potential challenges ahead. Giardini also addressed the implications of the sunset of the hold harmless provision, warning that it could negatively affect service access and workforce wages.

Jordan Lindsey, executive director of The Arc of California, echoed these concerns, noting the looming threat of Medicaid cuts being discussed in Congress. He mentioned that the coalition representing various stakeholders has proposed budget-neutral solutions for the upcoming fiscal year, which include discussions on the hold harmless provision and other relevant issues.

The meeting underscored the critical financial challenges facing LCSAs and disability service providers, highlighting the need for sustained support and proactive measures to ensure continued access to vital services for Californians. The committee's next steps will be crucial in determining the future funding landscape for these essential programs.