California Gov. Gavin Newsom's plan to delay the last phase of disability service rate reform by one year would save about $613 million in state money and put off raises for about 150,000 disability care workers, KFF Health News reported on May 7, 2024. The Legislative Analyst's Office put the savings at $612.5 million and said the state would also give up $408 million in federal reimbursements.
What was at stake
California had committed in 2021 to close a gap between what it paid nonprofit providers and the rates its rate study found adequate. KFF Health News reported that the state had funded about half of that so far, mostly for wages and benefits, and that workers expected a final raise of $2 to $4 an hour in July 2024. Under the proposal, rate models would be fully funded July 1, 2025, instead of July 1, 2024, according to the analyst's office.
Families told KFF Health News the delay would deepen staff shortages, and The Arc of California warned it could put the state at risk of lawsuits under the Lanterman Act.
Why this mattered for providers and DSPs
DSPs in California were competing with a new $20 fast-food minimum wage. A one-year delay meant another year of pay that trailed other entry-level jobs. The budget Newsom signed in June 2024 shortened the delay to six months, starting the higher rates on Jan. 1, 2025.