O’Malley increases DDA funding

After a rocky six months for the Developmental Disabilities Administration, Gov. Martin O’Malley’s fiscal year 2013 budget proposal increases funding by about $31 million and creates a new fund so unspent money will stay in the agency.

Joshua M. Sharfstein, M.D.

Department of Health and Mental Hygiene Secretary Joshua Sharfstein and Developmental Disabilities Administration Director Thomas Frank Kirkland sent a letter detailing the agency’s budget initiatives to all members of the General Assembly on Wednesday morning, soon after O’Malley shared his budget proposal.

The agency, which provides medical and support services to about 25,000 Marylanders, has seen its ups and downs this past year. During the last General Assembly session, people lobbying for Maryland’s disabled succeeded in getting passed a new 3 percent tax on alcohol, part of which provides funding to the agency. Many lawmakers hoped that money would be used to help provide more services to the thousands of people on the agency’s long waiting list.

Months later, the agency found that it had $33 million in funds — mostly state money from prior years — that was unspent. Budget rules required that about $26 million in state appropriations be returned to the General Fund.

O’Malley’s proposed budget for FY 2013 is $837 million, a nearly 4 percent increase over the funds the agency has in the current fiscal year. Sharfstein and Kirkland, who have spent the first week of session explaining the agency’s financial situation to legislative committees, wrote in their letter that the budget is an “unprecedented investment to strengthen this system.”

“We think this is very much a step forward, though there is still significant work to be done,” Sharfstein said Wednesday.

Advocates for the developmentally disabled agreed with Sharfstein.

“The governor clearly made people with developmental disabilities a priority during a very difficult budget time,” said Laura Howell, executive director of the Maryland Association of Community Services.

Sharfstein said that straight financial comparisons between the proposed FY 2013 budget and the ones in the current and previous fiscal years are somewhat misleading. In past years, he said, the agency underspent millions of dollars. This year, he said, there is more of an awareness of the amount of money the agency has, and it will be more closely monitored.

Regardless, the agency is getting much more money next year. Some of it represents a larger piece of general funds, but about $27 million comes from the alcohol tax. The enacting legislation gave the agency only $15 million of the $88 million projected for 2012, but did not specify where funds go after the first budget year.

“The alcohol tax helped make this happen,” Sharfstein said.

Sharfstein said that state funds make up between 55 and 60 percent of the department’s total funding, with the rest coming from the federal Medicaid program.

New funding is going toward several initiatives. These include:

— $15.7 million more to give service providers a 2 percent rate increase. Sharfstein said that provider rates were slashed in fiscal 2010 to save money, and this brings them back to the previous rate.

— $10.4 million more to create community placements for young people in transition. The money should create 608 more placements, which Sharfstein said should cover everyone who needs the assistance in FY 2013.

— $4.6 million more to better coordinate resources with community providers. Howell said these funds were cut 15 percent in FY 2010, and this increase restores much of that.

— $1.4 million more to work with people involved with the court — such as those who are not competent to stand trial.

— $1.4 million more to get people off the waiting list.

— $1 million to help create and provide more accessible housing, jointly with the Mental Hygiene Administration.

Sharfstein wrote that along with the financial proposal, O’Malley is submitting legislation to create a Developmental Disabilities Trust Fund. Each year, any unspent funds would go here, where they will be available for future use. This would eliminate future issues of poor record keeping leading to millions of dollars that cannot be spent on services.

Department officials have said the reason so much unspent money went undetected for so long is that the agency’s accounting system is extremely poor and outdated. In the current fiscal year, the agency has budgeted funds to have a consultant determine the best way to overhaul the system.

Because that assessment has not been done, Sharfstein said, costs to strengthen the system are not included in the current budget proposal.