Over the past two weeks I have been on the road as part of an effort led by the Governor's Office, to discuss the Governor's final budget. I've made dozens of presentations to providers, partners, stakeholders, and the news media, and you have probably seen some of the coverage. I thought that the article that appeared in the June 22 Peninsula Clarion did a good job of explaining our budget, our reorganization, and our future plans. You can view this online at the Peninsula Clarion.
Commissioner travels to meet with United Way agencies
This coming Monday I will be in Anchorage to present the FY 04 H&SS budget to provider agencies and to discuss ways we will continue to work with our partners to provide Alaskans with health and social services. I want to help them understand the approaches we have taken to continueproviding services even as state revenues are shrinking. DHSS has done an outstanding job meeting this challenge, replacing state General Fund dollars with new federal dollars, and I look forward to sharing this information.
FY04 Budget Update
DHSS will receive more revenue next fiscal year--$1.65 billion versus$1.50 billion in the previous fiscal year. The increase is due to $71.9 million growth in Medicaid funded services. The program growth comes at the same time that the state general fund is shrinking. Therefore, we are reorganizing the department to improve the delivery of services to Alaskans, and finding savings through cost containment, administrative reductions and new federal dollars.
The department will bring in $55.3 million in new revenue for this coming fiscal year: $22.1 million new federal Medicaid funds from President Bush's tax relief act; $19.8 million in savings to the General Fund from refinancing; and $13.4 million from alcohol tax and other revenues.
Landing these new federal funds is only part of our success story-the other part is a new department organization that will mean services are provided in ways that make more sense for Alaskans. The Office of Children's Services will house all services and programs for children,while the new Division of Behavioral Health will integrate two former divisions that often serve the same people, the Division of Mental Health and the Division of Alcohol and Drug Abuse. A new Office of Program Review will help maximize federal Medicaid funding, something the department will focus heavily on this coming year.
A majority of the reduction to this year's share of DHSS state General Funds came from the phase out of the Longevity Bonus Program-- $44.8 million. This program was transferred from the Department of Administration as part of the Governor's Executive Order that brought Longevity Programs, Pioneer Homes, Senior Services and Child Care Licensing to the department. A new Senior Assistance Program wasannounced this week, allowing seniors in financial need to apply for $120 a month for up to 10 months. Read the press release...
Additionally, $12 million of General Funds have been replaced dollar-for-dollar with new Medicaid funds. Some program reductions, such as funding for advocacy efforts, legal fees and some residential programs, were made. Our priority in making decisions was to keep services intact and to reduce administrative costs first. More than two million was saved through efficiencies in the new organizationalstructure, leaving $6.4 million in specific service eductions.
DHSS Reorganization July 1
Starting on July 1, nearly all major elements of the DHSS reorganization will be effective. I appreciate your patience and cooperation. The new Divisions will not automatically re-create themselves overnight, so we will experience a transition period. I want to thank all of our staff who have been working extraordinarily hard to get ready for thistransition. Besides hard work, I have seen tremendous examples of creative thinking from the people of the department, and I am honored to work with each of you and serve as your Commissioner.
Sincerely,
Joel Gilbertson, Commissioner