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New DHS Director nixes MHI layoffs

Friday, January 21, 2011

DHS to stay status quo for current Fiscal Year

DES MOINES -- The good news out of Des Moines for the Cherokee Mental Health Institute is that state Department of Human Services institutions will be spared the proposed employee layoffs, bed closings or service interruptions between now and June 30, the new DHS director told state legislators Wednesday.

"The staffing level that we had as of Jan. 1 we will try to retain. By doing that, there should be no layoffs," said Chuck Palmer, Gov. Terry Branstad's choice to lead the state's DHS. "None of the reduction in beds or the layoffs are going to go forward. The goal is to maintain where we were on Jan. 1."

Palmer said Branstad is studying possible internal DHS funding reallocations and a "fast-track" supplemental appropriation request to the Legislature for Iowa's four mental health institutes and two youth facilities to get the agency through the current fiscal year.

Overall, Palmer said some of the previously announced savings were already factored into the department's operation and he expected that the funding gap that needs to be addressed by June 30 likely would be in the $10-million range.

Charles Krogmeier, the former DHS director in Gov. Chet Culver's administration -- which ended last Friday -- announced last week that the agency could face layoffs of up to 136 employees, the elimination of 129 institutional beds, service cutbacks and program eliminations to meet the additional $27.3 million reduction in DHS spending needed yet this fiscal year.

That was the DHS share of the overall $83.7 million in general-fund savings the Legislature mandated state departments find in fiscal 2011 as part of a massive government reorganization effort

For Cherokee MHI, that translated into a proposed $2.4 million cut by the end of the fiscal year which was being planned for. However, Cherokee MHI Superintendent Dr. Jason Smith said the newly proposed cuts totaled an additional $840,000 for the Cherokee Institution, which "caught us all by surprise."

The Cherokee MHI employs 157 full- and part-time workers, with 29 positions originally targeted to be eliminated if the Culver proposal was finalized by Branstad. The proposal also would have cut 12 of the current 25 adult psychiatric beds at Cherokee, but would make no change to the total of 12 beds for children and adolescents.

Krogmeier had proposed cutting the number of beds and halting some admissions at mental health institutes around Iowa, including Cherokee, as well as reducing capacity or cut beds at facilities serving vulnerable or at-risk youth in Toledo and Eldora. Possible alternatives also included phasing out some beds and shifting funds at several facilities to accomplish short-term savings.

But Palmer said Wednesday that none of the contemplated changes at mental health institutes in Cherokee, Clarinda, Independence or Mount Pleasant that had been proposed would move forward and there would not be changes at the Toledo juvenile home for the current fiscal year. Beyond that, Palmer said DHS programs and services would have to be looked at in the context of comprehensive mental-health reform and what funding level is needed to accomplish the agency's priorities.

"Our goal is to sustain these individuals in the settings that they're in, and the staffing," said Palmer. "These beds right now are necessary. You wouldn't have people in these beds if there were alternatives in many cases. Many of these people have been through multiple community-based services. They need these services."

Palmer made his comments during and after Wednesday's joint House-Senate Health and Human Services budget subcommittee meeting, where lawmakers will be looking to close a $600 million gap in state Medicaid funding for the fiscal 2012 budget year that begins next July 1.

State Sen. Jack Hatch, D-Des Moines, a committee co-chairman, last week called for legislators and Branstad to consider using a share of the projected surplus ending balance to supplement DHS programs for the rest of the current fiscal year. At Wednesday's meeting, he told Palmer he appreciated his quick response in addressing the agency's short-term financial needs.

Sen. Bob Dvorsky, D-Coralville, chairman of the Senate Appropriations Committee, said he expected to see Branstad include a supplemental spending request for the current fiscal year when Branstad presents a two-year proposal for the fiscal 2012 and 2013 budget years to the Legislature next week.

When first announced last week, Dr, Smith said the cuts would be "devastating" for Cherokee MHI.

"We're uncertain about what will happen at this time, but any cuts will have a big impact on our services we offer and on the communities we serve." noted Smith after last week's announcement.

A major player in the Iowa DHS system, the Cherokee MHI currently serves a 31-bed adult psychiatric program, and a 12-bed children and adolescent program. Cherokee serves a 41-county catchment area throughout Northwest Iowa for adults, and a 56-county catchment area in Western Iowa for children and adolescents.

"A great many people in need of our services and expertise would have been adversely impacted by these proposed budget and personnel cuts," emphasized Smith. "Many would have no place to go for treatment."

Smith, also the Director of the Iowa Civil Commitment Unit for Sex Offenders (CCUSO) on the Cherokee MHI Campus, said last week that any proposed budget cut impact on CCUSO was an unknown at this time.

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