Committee Hearing, March 20, 2012

COUNCIL OF THE CITY OF PHILADELPHIA2 COMMITTEE ON PUBLIC HEALTH3 AND HUMAN SERVICES4 5 Room 400, City Hall6 Philadelphia, Pennsylvania Tuesday, March 20, 20127 10:20 a.m. 8 9 PRESENT: COUNCILWOMAN MARIAN B. TASCO, CHAIR10 COUNCILWOMAN CINDY BASS COUNCILWOMAN JANNIE BLACKWELL11 COUNCILMAN WILLIAM K. GREENLEE COUNCILMAN KENYATTA JOHNSON12 COUNCILMAN CURTIS JONES, JR. COUNCILMAN JAMES KENNEY13 COUNCILMAN DENNIS O'BRIEN COUNCILWOMAN MARIA D. QUINONES-SANCHEZ14 COUNCILWOMAN BLONDELL REYNOLDS BROWN 15 RESOLUTION 120090 - Resolution authorizing the16 Council Committee on Public Health and Human Services to hold hearings regarding the impact17 of the proposed FY 2012-2013 state budget on the public health and human services programs18 provided in Philadelphia. 19 - - -20 21 22 23 24 25 DiscoveryWorks Global 888.557.8650 www.dw-global.com

Good morning. Good morning. (Good morning.)

Thank you. Thank you for coming. Welcome to City Council Chambers and the hearing, Committee on Public Health and Human Services Committee regarding Resolution 11 120090. We will ask the Clerk to please read the resolution.

Resolution 120090, authorizing the Council Committee on Public Health and Human Services to hold hearings regarding the impact of the proposed FY 2012-2013 state budget on the public health and human services programs in Philadelphia.

Thank you very much. We are going to get started. I was trying to wait for my Vice Chair, Councilwoman Maria Quinones-Sanchez. com 3/20/12 - PUBLIC HEALTH - RES. 120090 sure she has some comments she would like to make. She's on her way downstairs. We will recognize her for her comments when she comes, but let me recognize the Committee members who are here. Councilman Greenlee to my left. To my right, Councilwoman Cindy Bass from the 8th District and Councilman Jim Kenney at-large, as well as Mr. Greenlee is at-large, and I'm Marian Tasco, Chair of the Committee on Public Health and Human Services. Recently, Governor Corbett presented his proposed 2012-2013 budget to the General Assembly. In his budget address, the Governor announced plans to collapse a number of human services line items like homeless assistance, mental health services, behavioral health services and child welfare into a single funding stream and provide these dollars to Philadelphia and counties around the Commonwealth in the form of a block grant. com 3/20/12 - PUBLIC HEALTH - RES. 120090 The purported goal for this new Human Services Development Block Grant is to provide flexibility to counties in how they spend dollars for their constituents. However, under this new Block Grant, Philadelphia is proposed to receive a percent reduction from the 9 2011-2012 state budget, and this cut 10 represents a loss of $42 million in human 11 service programs funds for Philadelphia. 12 Through this guise of 13 flexibility, Philadelphia will be forced 14 to cut funds for homeless assistance 15 versus money for child welfare versus 16 dollars for mental health services. 17 Consequently, this process of pitting 18 vital services against each other will 19 continue throughout the various human 20 services programs provided in Philadelphia. com 3/20/12 - PUBLIC HEALTH - RES. 120090 safety net that these human service programs provide for our city. Based on this reason, I felt that it was so important to introduce this resolution and have a frank discussion on the issue. In this regard, I would like to thank all of you who are here today for providing insight on this issue. Collectively, I believe that we can gain an understanding of the impact of this budget proposal and what steps we need to take to move forward. Additionally, I'd like to report that our Council met with the Philadelphia Delegation last week to discuss this issue and other issues of importance to us in Harrisburg. com 3/20/12 - PUBLIC HEALTH - RES. 120090 to fight for change in Harrisburg, because at the end of the day, it will be the vote from the State Legislature as well as the House side and the Senate side. And though most of the folks who are from Philadelphia are -- and I don't want to get political, but it is political -- are democrats, we are in the minority in the House and in the minority in the Senate, but hopefully through our message and their message and conversation with their colleagues on the other side of the aisle can show that Philadelphia is not the only county that will be impacted. They act like Philadelphia is the only county with poor people. Throughout this state, in every county, there are people who require these services that we are going to cut, but they need to understand and know that they fall in the same category as Philadelphians. com 3/20/12 - PUBLIC HEALTH - RES. 120090 talk today we give our voice to this issue, that you give your voice to the folks who represent you in Harrisburg as well as those who don't represent you. It doesn't hurt to let everybody in Harrisburg know, because 203 people have a vote, and we need to contact every last one of them. And in short, they're my comments and very important, and we have to be more mindful of who we send to state government also. The Chair recognizes that Councilwoman Quinones is here. Again, thank you so much for coming, and we would begin the testimony after her remarks. Thank you, Councilwoman.

And any other Councilmember who would like to make remarks, please feel free to do so.

Thank you, Madam Chair. We've been talking about this DiscoveryWorks Global 888.557.8650 www.dw-global.com 3/20/12 - PUBLIC HEALTH - RES. 120090 in Council the last few weeks, and we are extremely concerned, so I want to thank you for your leadership as Chair of this Committee for us to have this opportunity to talk about this item. Over the course of the next couple of months, the City of Philadelphia is going to be approving a budget. There's much talk and much controversy about AVI, about funding for the School District, but one of the things that is really important and I want the folks in this room to understand is that in the last few years, this City Council has had to do the heavy lifting, and the heavy lifting and making tough decisions because we believe these programs that we're about to talk about this morning are safety nets and vital to Philadelphia given the economic situation. We ask that you serve as our ambassadors as we deliberate on this budget for this message, that this is not DiscoveryWorks Global 888.557.8650 www.dw-global.com 3/20/12 - PUBLIC HEALTH - RES. 120090 about us taxing people because we want to. It is about doing what makes sense, and we can't take away the safety nets that become so important. So whether we're talking about the asset testing of seniors and their ability to have access to food stamps, stuff that is federally subsidized, we really believe that what's going on in Harrisburg is mean-spirited and goes against our own interest here in the City of Philadelphia and the Commonwealth. So we thank you for the work you do, the providers that are here that are our stakeholders and our partners on the ground, but we have an obligation at the end of the day if Corbett doesn't do and the State Legislature doesn't do their jobs, we can't be irresponsible the way they're being irresponsible. Making numbers balance on paper has nothing to do with people's lives. And so I want to thank you all again and say that as we deliberate over DiscoveryWorks Global 888.557.8650 www.dw-global.com 3/20/12 - PUBLIC HEALTH - RES. 120090 the budget over the next few months, that you understand the heavy task that we have to do here in City Council. So thank you, Madam Chair and my colleagues, for participating today, and we look forward to working with you with the Philadelphia Delegation to try to get more resources from Harrisburg and work with the Mayor to provide a budget that is fair to everyone. Thank you.

Thank you very much. Comments from any other members of the Committee? (No response.)

Okay. We will have questions as we move along. We're going to proceed with panels. We will have the panel come forth, present their testimony, and then we will raise questions at the end of the panel presentation. If you just came in and want to testify, please go to this table DiscoveryWorks Global 888.557.8650 www.dw-global.com 3/20/12 - PUBLIC HEALTH - RES. 120090 and list your name. The first panel will be Dr. Donald Schwarz, Deputy Mayor for Health and Opportunity; Anne Marie Ambrose, DHS Commissioner; Dr. Arthur Evans, Director of Behavioral Health and Intellectual Disabilities; Dainette Mintz, Director of Adult Services. (Witness approached witness table.

This is our team in City government who has to deal with all of these cuts and try and figure out how we adjust. Let me recognize Councilman Kenyatta Johnson who has joined us at this table. Good morning.

Good morning.

Would you state your name for the record, please, and proceed with your testimony.

I would. I'm Donald Schwarz and I'm here as both the DiscoveryWorks Global 888.557.8650 www.dw-global.com 3/20/12 - PUBLIC HEALTH - RES. 120090 Deputy Mayor for both Health and Opportunity and the Commissioner of Public Health. I represent our four departments, and we've summarized our testimony in the interest of time. The Commissioners are here so that we can answer any questions that the Committee might have. I apologize in advance for a bit of laryngitis, so I'll do my best to get through and to project.

Thank you.

Good morning, Chairperson Tasco, members of the Committee on Public Health and Human Services, and thank you for this opportunity to testify on the impact of Governor Corbett's proposed budget on social services in the City of Philadelphia. com 3/20/12 - PUBLIC HEALTH - RES. 120090 about the impacts of this budget. On Tuesday, February the 7th, Governor Tom Corbett proposed his Fiscal Year 2013 budget, a budget that keeps the total Commonwealth general fund spending level, decreases tax dollars collected from Pennsylvania corporations, and decreases by one-fifth dollars that Pennsylvanians put into programs to help the most vulnerable in our state. This budget is bad for Pennsylvania counties, including Philadelphia, and will harm the most vulnerable in our city in a way that will directly increase the number of homeless on our streets, will reduce the number of individuals with drug and -- will reduce the number of individuals with drug abuse issues and mental illness who receive care, and will, as a consequence, likely increase the number of people in our jails. In Philadelphia, we have dealt with ongoing state cuts of social service dollars. com 3/20/12 - PUBLIC HEALTH - RES. 120090 Councilmembers have already mentioned, we have seen our budgets decline considerably. Between 2009 and 2012, for instance, flexible human services dollars that can be spent in a variety of ways to support individuals in health and social service systems were cut by 57 percent; state dollars used to purchase food for the hungry were reduced by percent; 11 and AIDS prevention funding to 12 Philadelphia was reduced by 40 percent. 13 In fact, after almost four years of continuing cuts, we have become pretty facile at recognizing how and where to make cuts prudently and where cuts are harmful and unmanageable. com 3/20/12 - PUBLIC HEALTH - RES. 120090 that inventory by 194 percent for families, with remarkable levels of housing stability among those who are housed. The number of homeless single adults in Philadelphia in shelters and on the street was down percent in January 8 2012 compared to January 2011. The 9 Department of Human Services has safely 10 reduced the number of children in 11 dependent placements by 27 percent in the 12 last four years. The number of children 13 being sent out of state for mental health 14 placements is down by 80 percent. With 15 this experience, we can recognize where 16 we have opportunities to make productive 17 change and live within our means and, 18 alternatively, where cost-cutting will 19 harm real people and the fabric of our 20 city. The Governor's budget makes harmful cuts to income supports, housing, and services. On its face, the proposed Human Services Development Block Grant could appear to be a reasonable measure. com 3/20/12 - PUBLIC HEALTH - RES. 120090 The Commonwealth has taken seven budget lines and put them together alleging they provide flexibility to counties which will allow better programming for less cost. While flexibility is welcome at the county level, when flexibility is conditioned on such dramatic reductions in funding, the cost to the public would simply be far too high. A full two-thirds of the funding lumped into the Block Grant comes from essential services to those with serious mental illness. I'm going to repeat that. Two-thirds of the funding in this Block Grant comes from essential services to those with serious mental illness. The state worked with counties over 30 years to close and reduce the size of state mental hospitals. This was done by negotiating with counties to provide community-based services, funded by the community mental health dollars in the state budget, to keep those with severe mental illness in communities. com 3/20/12 - PUBLIC HEALTH - RES. 120090 people into the community, called CHIPP and SIPP dollars, are cut by percent 4 in the Block Grant proposal.

If counties 5 cannot safely cut these services; that 6 is, if they fund real people, which they 7 do, the reductions to the rest of the 8 items in that single budget line, the 9 community mental health line, will need 10 to be cut by more than 45 percent. This 11 will decimate community mental health 12 services and will not be fixed by the 13 other dollars in the Block Grant. 14 An additional 17 percent of the 15 dollars in the Block Grant come from 16 services for those with intellectual 17 disabilities, some of the most vulnerable 18 of our citizens. This budget cut means 19 that when elderly parents who have kept a 20 mentally retarded or intellectually disabled child at home, when those parents die, the child will likely be institutionalized. com 3/20/12 - PUBLIC HEALTH - RES. 120090 disabilities living at home rather than in institution will lose this support. Only about 4 percent of the remaining dollars come into the Block Grant from non-behavioral health lines, including critically important homeless assistance dollars and already flexible human service development dollars. This means that these two funding streams could be zeroed out and not make a noticeable dent in the massive cuts to mental health and intellectual disabilities funding. In addition, the Governor's budget would completely eliminate the General Assistance program. General Assistance is truly a subsistence benefit of the last resort for vulnerable Pennsylvanians who have no other income. Eligible individuals receive just $205 per month, which is less than percent 23 of the federal poverty level and has not 24 increased since 1990. com 3/20/12 - PUBLIC HEALTH - RES. 120090 disabled or sick adults without children; domestic violence survivors, many of whom have just fled their abusers; adults caring for someone who is sick or disabled or an unrelated child; adults participating in drug treatment programs; and children living with an unrelated adult. The Department of Public Welfare estimates that eliminating the General Assistance program will save $150 million per year. It also proposes an additional $159 million cut to state-funded Medical Assistance to people in former General Assistance categories. These projected savings will be a pittance compared to the additional public costs to support those who become newly homeless and destitute due to the lost of this lifeline. com 3/20/12 - PUBLIC HEALTH - RES. 120090 systems and will have a real and sustained effect on our citizens and our city. As a result of the proposed cuts, we expect to see a number of things: an increase in people who are homeless with less capacity in the City to serve them; an increase in the street population; families with no place to go, likely landing on the streets; more people with untreated mental illness and substance abuse; an increase in our jail population; an increase in institutionalization; an increased demand for emergency services at our hospitals; as well as an increase in children being placed out of their homes and delayed family reunification. Now that I've talked about the impact, let me comment on efficiency and flexibility, the alleged benefits of the new Block Grant. com 3/20/12 - PUBLIC HEALTH - RES. 120090 Alexander stated that this budget, quote, "transforms how county assistance agencies receive state funding, implementing block grants that provide more flexibility to ensure services that are tailored best for the community," end of quote. In the Governor's budget document, the Administration writes that the new Human Services Development Block Grant will create, quote, "an unintegrated, coordinated and seamless service delivery system that addresses consumer needs for quality, independence, flexibility and service coordination, while also addressing the need for cost containment and financial integrity," end of quote. com 3/20/12 - PUBLIC HEALTH - RES. 120090 to fit together that is more efficient than having them separate.

There is no 4 connecting thread to the items put into this block grant proposal that allows synergies or efficiencies. Moreover, the seven items in this block grant are so overpowered by the severe cuts to the county mental health system, there is simply no way to improve efficiency. In a briefing by Deputy Secretary of Public Welfare Blaine Smith, the Department revealed the revenue components of the Human Services Development Block Grant. These sources include several federal block grants to the Commonwealth, like the Social Services Block Grant and the Drug Abuse Block Grant, as well as other federal funds. It has been these funding streams from Washington that have particularly increased the paperwork requirements to counties in the already complex Community Mental Health budget line that have been put into the proposed block grant. com 3/20/12 - PUBLIC HEALTH - RES. 120090 requirements and the federal categorical funding requirements that go into them mean that for Philadelphia the flexibility and simplicity the Governor trumpeted in the proposal to create the Human Services Development Block Grant are not likely to materialize. We will still have to spend dollars according to federal guidelines and to report on how we used the dollars through federal formula-based reporting forms. Additionally, there are many legislative and court-mandated requirements on the state that relate to the funding lines put into the new block grant. Counties now expect that with the creation of the Block Grant, they will be responsible for these mandates, thus exposing them to new liability. For instance, the federal Olmstead requirements on Pennsylvania may now, for the first time, be shared with counties, placing unreasonable demands on county budgets, including our own. com 3/20/12 - PUBLIC HEALTH - RES. 120090 Essentially, what the Governor's budget proposes then is to take all of the funds for community mental health services, including assessment, cure and housing supports, and all of the funds for intellectually disabled people living in stable homes, and take homeless supports, healthcare supports, treatment for those addicted to substances, and special programs for abused children, and combine them all together. The federal requirements on these funding lines and the imbalance in the real size of the various lines mean that counties will not be able to achieve new efficiencies and will not gain much, if any, flexibility. After doing this, the Governor then proposes to cut the Commonwealth's commitment to the vulnerable by 20 percent and disguise it by calling it the Human Services Development Block Grant. com 3/20/12 - PUBLIC HEALTH - RES. 120090 for a percent cut to these essential services lays bare the pretense of the seven line item cuts being part of a rational plan to use block granting as a means to create efficiencies. In its 2005 policy brief on block grants, the Brookings Institution highlighted the three philosophical reasons for block granting as follows: First, local flexibility; second, protecting items in the Block Grant from tinkering by legislators; and, third, controlling spending. Given the disproportionate harm created by the cuts made to programs before they were thrown into the Block Grant and the likely continued inflexibility and reporting requirements for the Block Grant, it is clear that this vehicle provides no hope of improving the lives of the mentally and intellectually disabled, the homeless or disabled children or abused children in Pennsylvania. com 3/20/12 - PUBLIC HEALTH - RES. 120090 support for those most in need, the proposal merely balances the budget without heed to the human cost at stake. We continue to work with the state to reconsider this ill-advised reduction. We are reaching out to neighboring counties through the Metropolitan Caucus to determine areas of agreement for collaborative efforts.

The Mayor and I have traveled to Harrisburg to speak to members of the Legislature. I serve on a committee of the County Commissioners Association of Pennsylvania with others in the human services field that is analyzing the proposed block grant, assessing impact and developing recommendations for counties across the Commonwealth, such as piloting the block grant approach with a few counties to present to the Association for endorsement and then to the state. com 3/20/12 - PUBLIC HEALTH - RES. 120090 about this harmful proposal. I am here with my fellow Commissioners, and we're happy to answer your questions. We've included at the end of the testimony the dollar value cuts to the City of Philadelphia and within the state Block Grant and the proportionate cut for each of those compared to the whole. Thank you.

Thank you very much for that critical analysis of what's going on. We appreciate this. I just have a couple of questions. And let me recognize that Councilwoman Blondell Reynolds Brown is with us and Councilman Dennis O'Brien at the table, members of the Committee, and in his chair is Councilmember Curtis Jones. On your you talk about the Brookings Institution. Are you saying that they supported this idea of block grant? DiscoveryWorks Global 888.557.8650 www.dw-global.com 3/20/12 - PUBLIC HEALTH - RES. 120090

No. Their analysis was done before this particular block grant and had to do with block granting in general. They were trying to analyze what were the rationale that were used by governments to create block grants in general. And what they point out is, if there are ways to make funding more flexible, that's a good reason for a block grant. Sometimes states or the federal government use block grants to protect funds from legislative tinkering with individual lines, but most often what states and the federal government do is use block grants as a way to hide cuts. And they highlight that hiding cuts is something that's used not infrequently, but needs to be made clear, that that's the purpose for the grant.

Do you have any sense -- and I know you can't kind of report what someone else is thinking, but maybe in your conversations with the Secretary of Welfare, do you DiscoveryWorks Global 888.557.8650 www.dw-global.com 3/20/12 - PUBLIC HEALTH - RES. 120090 believe that a thorough analysis of this process was given by the Department and that they are aware of all the issues that you have raised on about the realization of maintaining a balance?

I've not had those conversations directly. I think if we look at the increasing detail that the state has put out since the budget was announced, it appears likely that there's been a learning curve. Our hope has been that as that learning curve gets to some reasonable level, the Commonwealth would determine the infeasibility of doing this block grant without harming services in counties. We're waiting for that to happen. It has not happened as yet.

Thank you. I'm going to stop and recognize Councilman Kenney.

Thank you, Madam Chair. Last week I attended a luncheon, and I sometimes go to these DiscoveryWorks Global 888.557.8650 www.dw-global.com 3/20/12 - PUBLIC HEALTH - RES. 120090 luncheons because I like to hear -- it's not normally a place where I would be, but I like to hear what other people are talking about. And it was a luncheon honoring Governor Corbett at the Union League for the Lincoln Award. And I was invited by a friend, but I happen to sit at a table most with all republicans. I can tell you that there might be a real opportunity for what I termed at the table an agro-urban coalition. They are really, really angry. People who are in counties representing agricultural interests are really angry at the Governor and his budget proposals. And unlike Washington where no one reaches across the aisle for anything, this may be a wonderful opportunity to link the agricultural interest and urban government interest that you're talking about to really kind of wedge this Administration in this budget process. They were really palpably angry at the cuts that he was proposing for DiscoveryWorks Global 888.557.8650 www.dw-global.com 3/20/12 - PUBLIC HEALTH - RES. 120090 subsidies and other things relative to agriculture and to animal husbandry and to veterinary medicine. All those things they were just clamoring about at the table under their breath while he was getting the award. I would be happy to reach out to that person who invited me to that luncheon and try to set up, and through the Mayor's lobbying efforts and through your lobbying efforts, I really think that might be a marriage that could be made with a mostly republican group of folks who are also angry at the cuts that they're going to anticipate getting, and maybe there's some way you can leverage some votes to get what we both need.

Sure.

So if you want to let me know and I'll make the connection.

Sure. I think we're happy to connect to as many counties as possible and to continue the DiscoveryWorks Global 888.557.8650 www.dw-global.com 3/20/12 - PUBLIC HEALTH - RES. 120090 education that we've been doing.

But it's not normally the area of interest that we would think is a common interest, but they're really as angry as we are.

It affects, I presume, the Veterinary School at the University of Penn, so there is a Philadelphia interest there as well.

Absolutely. Thanks.

Thank you. Councilman Greenlee.

Thank you, Madam Chair. My question is kind of on the same realm, and I know you talked in the end of your testimony about serving on a committee of the County Commissioners Association. Are there other people on that committee from around the state that are in human services, health, that kind of thing? Because the Chairwoman and I were talking before the hearing, DiscoveryWorks Global 888.557.8650 www.dw-global.com 3/20/12 - PUBLIC HEALTH - RES. 120090 obviously -- and I think she said it in her statement -- Philadelphia is not the only place in the state that needs help, and Councilman Kenney addressed another area that is. Even before this budget process has started, have there been conversations or alerts put out that this kind of thing could be coming throughout the state? Because I'm thinking places like Reading and Altoona and, you know, York. I'm sure there's a lot of people that need help in those places too that are being cut.

So a number of the associations that all of us participate in for different topics have talked about the Block Grant since it happened. The County Commissioners Association of Pennsylvania worked with the Governor last summer to create a series of criteria for the wise creation of block grants. Those criteria included things like identifying funding streams DiscoveryWorks Global 888.557.8650 www.dw-global.com 3/20/12 - PUBLIC HEALTH - RES. 120090 where efficiency is possible, working together with the counties to identify counties that have readiness to implement the Block Grant and then doing it on a piloted basis, phasing it in over time, if possible, and other things like that. I think the County Commissioners Association, after the budget came out, was surprised that the principles that they presented last summer were not used in developing this Block Grant, and I believe they've made their concern known. And certainly the members of the Human Services Committee for each county who serve on different committees of the County Commissioners Association have become aware, as the weeks have unfolded and more information has come out, that every county in Pennsylvania is impacted in generally negative ways by this Block Grant. Even counties where they felt prepared for a Human Services Block Grant because they're small, they can move dollars more DiscoveryWorks Global 888.557.8650 www.dw-global.com 3/20/12 - PUBLIC HEALTH - RES. 120090 easily, the inflexibility because of the inclusion of federal dollars has surprised them and made it more difficult for them to be supportive of the Block Grant as well.

Do you know these people that you're talking about, have they been in touch with their State Senators and State Reps?

I don't know the answer to that. I know that --

Excuse me. I think the County Commissioners have the Executive Director here today who will testify.

Okay. All right. Because that's where I was going. I mean, obviously -- because, in a sense, we were talking earlier, you're preaching to the choir here. We know how bad -- we may not how bad, we're learning, but we know it's bad and we're kind of on the same page here. But it kind of surprises me sometimes that folks DiscoveryWorks Global 888.557.8650 www.dw-global.com 3/20/12 - PUBLIC HEALTH - RES. 120090 in some of these counties don't -- I'm wondering if they even represent what their people want. So I'll leave it at that. Thank you.

The Chair recognizes Councilwoman Sanchez.

Through these associations, has there been an analysis of the economic impact? For instance, along the lines of what Councilman Kenney was saying, how many people are on that General Assistance list in Philadelphia; do we know?

We know the value. I don't know the number, but I think there are people who are testifying who can tell you much more the number.

Both the General Assistance numbers and the food stamps numbers, most of that is subsidized by the federal government. Do we know what percentage of it is subsidized? DiscoveryWorks Global 888.557.8650 www.dw-global.com 3/20/12 - PUBLIC HEALTH - RES. 120090

The General Assistance? So General Assistance subsidy is the minority of the dollars.

Right. It's a very little --

Like somewhere between and 32 percent is the number 9 that occurs to me, but, again, there are 10 people who have looked at that more 11 carefully. 12

I'll 13 wait for that. 14 Just because there's an 15 economic impact to people's ability and 16 that's money that stays in Philadelphia 17 and is funneled, and we have such a large 18 unenrollment number for food stamps as it 19 is, that the asset test -- do we have any 20 idea of how many of those folks will now 21 fall off that threshold because of the 22 $4,500 asset test?

On food stamps?

On food stamps. DiscoveryWorks Global 888.557.8650 www.dw-global.com 3/20/12 - PUBLIC HEALTH - RES. 120090

So two things to say. One is, the food stamp asset test happened, and it's happened because of Act 22, which was the law passed by the General Assembly last year giving the Secretary of the Department of Public Welfare much broader regulatory powers than the Secretary has ever had to change the rules on programs. One of the first changes that the Secretary undertook was to change the rules on food stamps. That is not part of the budget process. So that has happened. That will continue, and the budget process includes the savings, but the rules themselves are made through a separate process.

What's the number of savings that they're estimating?

So I haven't seen it. The one thing I can tell you about what is in the budget is, the number of rules that will have to be redone is enormous. So seven funding lines, each DiscoveryWorks Global 888.557.8650 www.dw-global.com 3/20/12 - PUBLIC HEALTH - RES. 120090 of them with separate funding streams into them will all need reporting requirement changes if they can. They'll need matching dollar changes. They'll need allocation formula changes. Those previously would have been done through legislative approval. Now they don't require legislative approval. They can be done through the rules process. But the sheer number of work, the amount of work that has to be done between now and the end of the fiscal year or between the passage of a state budget and the beginning of a new fiscal year is a huge amount of work to do. It means that it's unlikely that we'll know the rules for this Block Grant until a day or so before it's implemented. So enormous number of dollars, enormous amount of cut, huge numbers of people involved in Philadelphia, and probably a day or two of notice about how we're supposed to operate under this new set of rules. DiscoveryWorks Global 888.557.8650 www.dw-global.com 3/20/12 - PUBLIC HEALTH - RES. 120090

Okay. Thank you.

The Chair recognizes Councilwoman Brown.

Thank you, Madam Chairwoman. Good morning. Good morning. I rely on former State Representative Kenyatta who has been down this road at the state a number of times, and his good news is that we're on the front end of the debate. My question -- and I'll look forward to the testimony of the Executive Director of the County Commissioners -- I'm curious to know, given your years in government, have you seen this type of circumstance before? Because I'm always looking for lessons learned as we're getting ready to go down this road in this circumstance and under this Governor's leadership.

So I appreciate your confidence. I have not been in government that long. I've been in Philadelphia a long time; I've been in DiscoveryWorks Global 888.557.8650 www.dw-global.com 3/20/12 - PUBLIC HEALTH - RES. 120090 government for four years. So others who are coming can probably answer your question better than I can about over the long term have people seen anything like this. I have to say that what people have told me is that it's unprecedented in their experience.

So if it's unprecedented, then I would suspect it's difficult to even predict or get a temperature reading of where we're going to end up.

I think that's true. The volume of change that will be required and the numbers of dollars that are cut is enormous, and the people who are involved are sufficiently vulnerable and probably out of the mainstream for communication enough that the chance for damage is very real.

Thank you, Commissioner.

The Chair recognizes Councilwoman Bass. DiscoveryWorks Global 888.557.8650 www.dw-global.com 3/20/12 - PUBLIC HEALTH - RES. 120090

Good morning, Doctor.

Good morning.

Question for you. Are you familiar with the Benefits Bank and how that operates? I wanted to know if you thought that there might be an opportunity for the City to somehow either use the Benefits Bank or use something similar, which, for those who may not be as familiar with it, is a program that allows you to basically input all of your financial data and it will tell you everything that you are eligible for, whether it may be food stamps assistance, housing benefits assistance, anything and everything that exists that you would qualify for, just to make sure that people don't lose an opportunity, particularly when you look at the cuts, the blows that we're going to be taking likely from the state cuts.

That's a very important issue and an area where we all DiscoveryWorks Global 888.557.8650 www.dw-global.com 3/20/12 - PUBLIC HEALTH - RES. 120090 have to be very attentive. So people who live at a time of major change in eligibility need every help, every effort that can be made to help them understand what the changes mean for them and to be attentive to change. Unfortunately, we don't see benefit increases. So we don't expect there are going to be large numbers of new people who are eligible for things that they previously were not. Rather, it will be people who will lose benefits most likely, and going to the Benefit Bank then won't help them find new or different benefits really. For instance, General Assistance being cut will be a sheer cut to individuals, and there's not going to be anything to replace it. So going to the Benefits Bank, unfortunately, won't help people very much in that case. However, what it does raise is if General Assistance is cut but people would still be eligible for Medical DiscoveryWorks Global 888.557.8650 www.dw-global.com 3/20/12 - PUBLIC HEALTH - RES. 120090 Assistance, one consequence of cutting General Assistance may be that large numbers of people lose their health insurance because they simply don't recognize that they would still be eligible. So we need to undertake a fair amount of education for those people who are losing General Assistance benefits if they would still be eligible for Medical Assistance, to assure that they still can access those benefits.

Okay. So overall you don't think that the Benefit Bank or something similar to that could be --

I think it's always useful, and I think there are plenty of people on a day-by-day basis whose economic situation changes, but I think that should be good practice in general. For these specific changes, I fear, what we're going to see is people who will know all too well that they've lost their benefits or that the changes DiscoveryWorks Global 888.557.8650 www.dw-global.com 3/20/12 - PUBLIC HEALTH - RES. 120090 occurred.

Okay.

Do you suppose the state is going to take an all-out effort to educate the people who are going to be harmed by these cuts to let them know what's going on or they have to just kind of figure it out?

I certainly hope that they do that, but you and I share a point of view on this.

I'm being cynical. You know that, don't you? The other question, before I get to Councilman Jones, we spent a lot of time here in the early '90s under the leadership of Mayor Rendell to form the CBH, Community Behavior Health program, which we thought was a great idea, which would recapture the funding and put it back into the community, provide more services to people with mental problems and behavior problems. How is this going to impact on DiscoveryWorks Global 888.557.8650 www.dw-global.com 3/20/12 - PUBLIC HEALTH - RES. 120090 their ability to serve their population, and what happens to all of the maybe savings we were able to recapture to provide more extensive service to a broader audience?

Very, very important question. Dr. Evans. (Witness approached witness table.)

Arthur Evans, Commissioner for the Department of Behavioral Health and Intellectual Disability Services. There are basically two pots of dollars for people who are served in the public system, Medical Assistance or Medicaid, and then there are grants that we have for the uninsured. The cuts that the Governor has proposed are to those grants to the uninsured and not to the Medicaid funding that the Department receives. However, there are a couple of DiscoveryWorks Global 888.557.8650 www.dw-global.com 3/20/12 - PUBLIC HEALTH - RES. 120090 ways that those cuts could impact on our Medical Assistance program. Number one is if the proposal to cut back on General Assistance goes through, it will have a tremendous impact. We have -- the City receives about $90 million a year for individuals who are on General Assistance. So if that entitlement were to go away, that would be a loss of $90 million of treatment services to the City. Furthermore, cuts to the uninsured have an impact on Medical Assistance indirectly in a couple of ways. You mention reinvestment as a mechanism that we've had in the City when we had years where we had a surplus in the Medical Assistance program. We were able to take those dollars and reinvest them back into the system. We've done that to the tune of a couple of hundred million dollars over the life of the program, and what that has allowed us to do is to provide services to people who DiscoveryWorks Global 888.557.8650 www.dw-global.com 3/20/12 - PUBLIC HEALTH - RES. 120090 are uninsured, particularly people who are homeless, people who are coming out of the criminal justice system and so forth. And so to the extent that we are cut on the uninsured side, it means that we have more pressure for those surplus dollars to fund those people, and that ultimately means that we have fewer dollars over the life of -- over the next couple of years to serve people who are uninsured. We'll just burn down those dollars much quicker.

It doesn't help, does it?

No, it doesn't. I think your question is a good one because all of these things are very interrelated and it's not always apparent when you make a cut here what the ripple effect is, but I can tell you for all of the cuts that we're talking about, there will be a tremendous ripple effect.

Thank you very much. DiscoveryWorks Global 888.557.8650 www.dw-global.com 3/20/12 - PUBLIC HEALTH - RES. 120090 Councilman Jones.

Thank you, Madam Chair, and thank you for bringing this Committee this issue. It is vital. We had an opportunity to go to a briefing that you did earlier and talk about what to expect, and I think the last comment sums up my concerns, that it's like a pebble in the middle of a pond and these cuts have rippling effects all over the place. If you look at what it will mean for a reduced rate of health checks for young people for STDs, it has an impact in health services later on down the line. I think we're being penny wise and pound foolish at the state level. If you look at cuts in food stamps, returning incarcerated people who now don't have food stamps are more likely to commit more crimes. If you look at mental health and cuts in those kinds of interventions, the individuals impacted by those diseases will go DiscoveryWorks Global 888.557.8650 www.dw-global.com 3/20/12 - PUBLIC HEALTH - RES. 120090 somewhere and it will have some financial impact on our budget right here. I guess what my question is, and aren't we also a regional hub for services from other areas, because people come here because we have a slightly wider variety of services to offer people that are vulnerable and poor?

We don't advertise ourselves as a regional hub. I think there are people who come to Philadelphia because they don't really have a choice. There are services available here simply because of the concentration of individuals and services. In that way, we have spoken to and reached out to the surrounding counties, who recognize not only that they have problems similar to Philadelphia, so the smaller cities in our region will have the same problems as Philadelphia, but also that if Philadelphia is less able to care for DiscoveryWorks Global 888.557.8650 www.dw-global.com 3/20/12 - PUBLIC HEALTH - RES. 120090 people, it may well ripple back to the surrounding counties. So I think that's a well-taken point.

So when I look at, Madam Chair, all of the -- in the briefing they talk about the Medical Examiner's Office and their interventions in the multi-agency mode where they investigate child homicides, infant mortality, children protective services and death, things like that. Is that going to be impacted?

That's a fascinating question. So probably not, but this budget not from the Human Services Development Fund but the cuts that the Governor put in include cuts to the Vital Statistics funding in the state Department of Health. We receive dollars, a small amount of dollars, but dollars from that Vital Statistics fund that has to do with the money collected for filing birth certificates, death certificates and things like that. Those DiscoveryWorks Global 888.557.8650 www.dw-global.com 3/20/12 - PUBLIC HEALTH - RES. 120090 dollars help the Medical Examiner with bereavement counseling. So we're trying to figure out is there some way -- we have a fair number of folks in Philadelphia who avail themselves of bereavement after a loved one is either murdered or dies unexpectedly, and the Medical Examiner's Office has provided those services. We're working to see if there's a way with Behavioral Health to help maintain those services. But for those who are uninsured, it becomes a real worry. And it's a small cut. Is it something that would pass notice? Not particularly, but to those families who need it, we think it's important. So what has happened, remember, over the last four years, which I have tried to emphasize, is, we've cut and cut and cut and cut and cut. So we're not at a point where there's a lot of fat in any system anywhere. There's no fat in any system. So a real cut and then a cut of DiscoveryWorks Global 888.557.8650 www.dw-global.com 3/20/12 - PUBLIC HEALTH - RES. 120090 this magnitude is going to have to have huge impact on people in the City.

My thought is that any cut in public health equals an increased cost in ER services at a hospital.

Yeah.

So we're going to see this ripple effect in other sectors of Philadelphia beyond just the initial cuts, and I think we're, in a way, underestimating what the impact of this will be to others, who will then come and seek more funding because of the increases in those areas. So any cut to ambulatory services is an increase to the Fire Department, who is asked to come out in a 9-1-1 emergency. So I'm just trying to get us to put our arms around what the magnitude of these cuts and what they will mean as we go forward. Thank you, Madam Chair.

DiscoveryWorks Global 888.557.8650 www.dw-global.com 3/20/12 - PUBLIC HEALTH - RES. 120090 Commissioner, did you say that the Bureau of Vital Statistics where people get birth certificates? Well, you know, they just passed Bill 934, which they're going to require individuals who want to vote, if they get a photo ID, have to have a birth certificate. So what's going to -- it's rhetorical. I'm being funny, right? What's going to happen when they get an onslaught of all these people requesting their birth certificate?

I don't think that's funny at all and I think that is a serious concern.

It is a serious concern. None of these things were taken into consideration, but it furthers the effort to suppress the vote. Thank you. Councilman Kenyatta.

Thank you, Commissioner Schwarz. A couple things. Under the General Assistance program for Fiscal Year 2012, what's the exact DiscoveryWorks Global 888.557.8650 www.dw-global.com 3/20/12 - PUBLIC HEALTH - RES. 120090 amount? Is that the total, 159 million per year?

The total amount in the Pennsylvania budget?

Yes.

Hold on for one second, if you would.

Because they're saying they want to save 150 million. I just want to know the exact amount that was in the budget for Fiscal Year 2012.

I'll get it for you. I just have to find the right folder, but I have it for you. So the cash grant line in 2011-2012 was $220,356,000. 220 million. And in 2012-13, it's 66 million.

Sixty-six million.

That's a $153,930,000 cut, or 69.9 percent, according to the budget document from the Governor. DiscoveryWorks Global 888.557.8650 www.dw-global.com 3/20/12 - PUBLIC HEALTH - RES. 120090

And you're going to get back with us on exact numbers as to where those cuts are actually having an impact in terms of like Philadelphia --

We expect somewhere --

-- Chester County, Montgomery County?

For Philadelphia we expect something like an $85, $86 million cut.

Do you have an actual amount of individuals, numbers in terms of people? That's really the question I was getting at.

There will be others who will testify and I'm going to see to their numbers. I can give you an estimate, but the reason I'm hedging on this is only because there are others who have looked at this more closely and you'll get a more accurate estimate.

com 3/20/12 - PUBLIC HEALTH - RES. 120090 to be brief with my comments. Just coming from that environment in Harrisburg, there's a couple things that I hope we have an opportunity to walk away with at this hearing, and my colleague Councilman Greenlee pretty much said you're preaching to the choir, because for the most part, we all get it. It's going to have an impact on us significantly as we represent our constituents in the City of Philadelphia. You mentioned that these cuts are real and you mentioned that there are faces that should be attributed to these actual cuts, because a lot of times when you divvy up certain budgets in Harrisburg, you're not thinking about actual real live people and the impact it's going to have on people. So you just basically draw lines through the budget making cuts. com 3/20/12 - PUBLIC HEALTH - RES. 120090 foremost, you should be contacting your State Representative and your State Senator, and they should be aggressively advocating in Harrisburg to reduce these cuts. Every State Representative in Harrisburg and State Senator that represents Philadelphia should be holding the line and advocating against this Governor regarding these particular cuts. There will be a budget hearing in Harrisburg coming up soon. I know the Mayor has administration that goes and lobbies, but the people have to go to Harrisburg and lobby as well. And so part of this strategy should also be letting individuals from Philadelphia and the surrounding counties go to Harrisburg and state for the record and let the families go to Harrisburg, let the families go to Harrisburg and talk about how devastating these cuts will be if this budget goes through as proposed. com 3/20/12 - PUBLIC HEALTH - RES. 120090 side that represents Philadelphia, who is very passionate about the needs and concerns of those who are in the City of Philadelphia. I encourage you to also support him so he can stand and advocate with the Philadelphia Delegation against these cuts. These cuts will be devastating to the City of Philadelphia and the surrounding area, but the ironic part is, if you shut down the City of Philadelphia, the State of Pennsylvania shuts down as well. Forty to 60 percent of our state revenues come from the City of Philadelphia and the five-county surrounding areas, and I think we need to make that known, because a lot of times we just give Philadelphia and those people, but not recognizing that we contribute a significant amount of money to the tax base of revenue in the State of Pennsylvania. com 3/20/12 - PUBLIC HEALTH - RES. 120090 don't come and listen and do testimony, from an advocacy standpoint there's a part for us to play while we're in the front end. Because this is a proposal. This is a proposal in the beginning, but I think we need to aggressively advocate on that state level to push back to reduce that percent increasing. 10 I'm going to wrap up on this. 11 One Councilman said, Well, aren't other 12 counties affected. That is true, other 13 counties are affected. But just in my 14 brief experience in being in Harrisburg, 15 sometimes we have individuals on the 16 opposite side of the aisle, except for my 17 colleague Councilman Denny O'Brien and 18 John Taylor, that will pretty much vote, 19 vote based upon a rhetorical and 20 philosophical position separate what actually impacts them in their own counties. So, for instance, they'll vote something that will actually have a negative impact on their county regardless just based upon ideology. com 3/20/12 - PUBLIC HEALTH - RES. 120090 I think it's very imperative that we aggressively advocate and really inform not just the folks in Philadelphia and the surrounding areas, but all across the State of Pennsylvania. This is a real issue, and it's going to significantly have an impact if these cuts go down the way that they're proposed. So I just wanted to make sure we get some advocacy behind just coming and sitting and talking. That's it.

Thank you very much. Any other questions? (No response.)

Thank you, Dr. Schwarz.

Councilwoman.

Oh, I'm sorry. Move up to the mike.

All right. I'll try to do that. DiscoveryWorks Global 888.557.8650 www.dw-global.com 3/20/12 - PUBLIC HEALTH - RES. 120090 If I could just briefly summarize what I believe the Governor's position is, and, that is, to reduce spending and no tax increase. And the highlights of his budget would be to eliminate General Assistance programs; 20, 30 percent reduction in public funding for universities; as you have articulated, the challenge of the block grants; the education; DPW; percent 12 reduction to the counties on human 13 services; and no educational funding 14 increase. 15 I'd like to ask some process 16 issues, if I can. Last year when the 17 Governor proposed his budget, health and 18 welfare was protected in the Governor's 19 budget address. Could you comment 20 briefly on what happened to health and human services when the budgeteers, the various caucuses and the Governor's negotiated final product, what was the difference between the Governor's budget proposal as reflects in health and human DiscoveryWorks Global 888.557.8650 www.dw-global.com 3/20/12 - PUBLIC HEALTH - RES. 120090 services? It doesn't have to be finite numbers. I'm just trying to paint an historical perspective as to what could happen this year.

So there were changes, I think is the best way to say it. Some lines in the budget were increased back to their previous level; some lines sustained cuts over time. But the process, I think, restored some funding.

The Governor's budget or the final product in the 2011-2012 involved a projected savings in waste, fraud and corruption in the Department of Welfare. To your knowledge, has that number ever been realized?

Not to my knowledge.

Have you been involved or any of the counties been involved in trying to in any kind of process to find that waste, fraud and DiscoveryWorks Global 888.557.8650 www.dw-global.com 3/20/12 - PUBLIC HEALTH - RES. 120090 corruption?

We have. On the community behavioral health side, we are -- the Medicaid agent, remember, for the state have been pressed hard to make sure that all billing of the agency has been legitimate. In addition, the audit requirements on the county have been, I would say, pressed so that we have been in a good way pressed to review, look at, monitor audits that are submitted to us. We've generally done a good job I think in the past. We're trying very hard to do as good a job as possible. The savings that have been identified or the sources of revenue have been minimal. So, in general, Philadelphia County has done well in both of those areas. So while we have redoubled our efforts, I can't say that it's been terribly productive in terms of identifying new revenue.

And just to be redundant, do you believe that that DiscoveryWorks Global 888.557.8650 www.dw-global.com 3/20/12 - PUBLIC HEALTH - RES. 120090 process will produce any significant savings in waste, fraud or corruption?

I don't have any reason to think that it will either yield dollars nor a change in process.

Have you been involved in any planning for the future impact of the implementation of Act 62 -- or 22?

No. 12

Have you been involved in any planning for the proposed universal waiver that the Secretary of Welfare intends to promote the Commonwealth of Pennsylvania?

We've not.

Are you aware that there is a proposal afoot to delay tax cuts, specifically the Capital Stock and Franchise Tax depreciation changes, close corporate tax -- and a proposal to close corporate tax loopholes and find efficiencies that do not affect the well-being of the most vulnerable DiscoveryWorks Global 888.557.8650 www.dw-global.com 3/20/12 - PUBLIC HEALTH - RES. 120090 Pennsylvanians, and do you support that proposal?

If I understand what you're saying, I think I would, as long as it supports vulnerable Pennsylvanians.

My understanding is that the Capital Stock and Franchise Tax cut for this year alone is approximately 2.7 billion. Is that correct?

That is my understanding as well.

Could you reflect on what impact if we suspended the Capital Stock and Franchise Tax cut for one year, what impact that would have on this general discussion that we're having here?

If dollars were made available, I presume we could not only make whole again the dollars that are in the seven lines being cut 20 percent in the Human Services Block DiscoveryWorks Global 888.557.8650 www.dw-global.com 3/20/12 - PUBLIC HEALTH - RES. 120090 Grant, but perhaps we could even invest and make more progress in helping people who are most vulnerable in Philadelphia.

I know this is a rhetorical question, but I have to ask it anyway. Do you believe that the suspension of the Corporate Stock and Franchise Tax would be less onerous than the proposed cuts to health and human services?

I can only speak about health and human services. I can't speak about other impacts of the potential for changing the tax structure. So for health and human services, anything that brings back into the proposal the dollars that the Governor proposes to cut, anything that restores the cuts would be helpful to health and human services in Philadelphia.

Have you had any discussions with any of our hospitals, our rehabilitation facilities DiscoveryWorks Global 888.557.8650 www.dw-global.com 3/20/12 - PUBLIC HEALTH - RES. 120090 as to the months that they're in arrears on collections of clean claims?

We have.

Do you know what the impact is on small businesses when those clean claims are not paid promptly by the Commonwealth of Pennsylvania?

The estimates of the multiplier effect for a dollar that is lost in revenue for healthcare institutions is anywhere between $5 and $20, I believe, depending on which dollars are cut and who is doing the estimating.

Have you had discussions with our not-for-profit providers of health and human services in the areas and the reductions in their workforce that will be affected by these proposed cuts, and, if so, how dramatic would that be?

So we have not had those conversations yet in detail. DiscoveryWorks Global 888.557.8650 www.dw-global.com 3/20/12 - PUBLIC HEALTH - RES. 120090 We have had conversations with hospitals, for instance, that are looking at cuts that the Governor has proposed in Medicaid. The problem is, there's a lack of specificity in the budget documents either about the Medicaid cuts or about how the cuts in the Block Grant will be implemented; that is, there are no rules. And we have not wanted to make specific determinations for providers in Philadelphia without any rules from the Commonwealth. This is a huge problem. One, because agencies need to plan, and, two, because government needs to plan. So without rules for this Block Grant, it is very difficult to know what the impacts will be either on agencies or on people, because ultimately our responsibility is to Philadelphians and families whose income may change, families whose ability to care for loved ones may change, individuals who have serious mental illness or substance abuse who are homeless or have drug abuse. The DiscoveryWorks Global 888.557.8650 www.dw-global.com 3/20/12 - PUBLIC HEALTH - RES. 120090 impacts to those individuals will be real. They are the ones that we are responsible for, and it is very frightening to think about what could happen to people given the short timeframe for any rules and the magnitude of the cuts.

Yesterday I was asking a question and I was reminded by our esteemed Majority Leader that this would probably be a better venue for that question. When you have a cut in funding for the more intensive programs, is that like a water balloon where you push it down and some of those people who require a higher level of treatment will then end up in programs with less intensive comprehensive treatment, and what will be the outcome? What will be the effect on the outcomes of that?

I think the problem with that is only if we have someone who is a paranoid schizophrenic, DiscoveryWorks Global 888.557.8650 www.dw-global.com 3/20/12 - PUBLIC HEALTH - RES. 120090 who is stable at home and requires specific treatment, and one of the parts of that treatment has to do with monitoring at home so they take their medication, and the monitoring at home goes away, I don't know what lower level funding we have to provide home monitoring for people who are really very brittle and need to take medication. So for many of the services, I want to be clear, many of the services here, there aren't lower levels that are replacements.

So that will just disappear?

So where possible, we will try to support people any way we can, but these are not easily replaced services. If someone is substance addicted and they require -- or they're in substance abuse treatment, removing substance abuse treatment doesn't have an easy substitute. If someone is homeless and they DiscoveryWorks Global 888.557.8650 www.dw-global.com 3/20/12 - PUBLIC HEALTH - RES. 120090 are getting case management services and case management is taken away, there's not an alternative for that. Part of the problem with the Block Grant is, it presumes that there are ways to change funding streams and do things in a better way that's more flexible. Many of the services that we have were specified by the Legislature over a 30- or 40-year period. There was long debate about whether those services should happen, what are the efficiencies and inefficiencies, and the Commonwealth has monitored and made rules on each of these services and we have developed programs and we put out requests for proposals and we have specific providers who we monitor and individuals in those services. All that work goes away and we have three months to plan. It is illogical that there will be something at the end of the day that looks better than what has taken all this time and all this planning and all this DiscoveryWorks Global 888.557.8650 www.dw-global.com 3/20/12 - PUBLIC HEALTH - RES. 120090 oversight and all this review. Plus, we're working with people who aren't really able to be flexible necessarily. Many of the individuals who will be impacted by this are very vulnerable individuals, probably the most vulnerable in many ways in our City, and, therefore, any change is going to be hard for them, not to mention significant change. And many of the people who care for those people are living on the edge and doing the best they can with what we can give them and their loved one. That will change as well. We are very concerned about how much we're going to be able to minimize the impacts in some situations and what that's going to mean for people who we have cared about and, as professionals throughout our services, spent our lives trying to protect.

Commissioner, the Inquirer did a series of articles that reflected on the effects DiscoveryWorks Global 888.557.8650 www.dw-global.com 3/20/12 - PUBLIC HEALTH - RES. 120090 of cuts to eligibility for kids with disabilities, people in renal disease and renal failure, their estimates as to how many people were cut specific to Philadelphia. They're touting that an overwhelming majority of those individuals were put back. Can you shed --

Were -- I'm sorry?

There's been references that most of those people were almost instantly put back. Can you comment on -- can you illuminate as to whether those people who were cut were actually put back on the rolls and at what personal cost, human cost, was it for them if they were able to navigate through that process.

So we don't know, is the best answer I can give you. In part, because it is the state that knows who those individuals are. The City --

They're DiscoveryWorks Global 888.557.8650 www.dw-global.com 3/20/12 - PUBLIC HEALTH - RES. 120090 not sharing that information?

I'm sorry?

They're not sharing that information?

Well, we received some of that information through Community Behavioral Health, so we look at on a weekly basis the number of people enrolled in Community Behavioral Health, because anyone who is eligible for Medicaid in Philadelphia County should be eligible for Community Behavioral Health services. So the number of people in Community Behavioral Health is an indicator for us. We saw a decline and I think it's safe to say an increase. The problem is, it isn't uniform over the various eligibility categories for Medical Assistance. So some categories have declined and not come back up; other categories have continued to increase, and some have gone up and come down or gone down and come up. So the story isn't simple, and DiscoveryWorks Global 888.557.8650 www.dw-global.com 3/20/12 - PUBLIC HEALTH - RES. 120090 what we are hearing is probably what you're hearing, and our great fear is that there are disruptions for individuals who have not been made whole and we're trying to find those people. We don't have an easy way to do that.

Can I ask you one more question, and I apologize to the Chairperson for taking up this much time, but we've heard about the asset test on Act 22. I've also heard you testify that you have not been involved in any planning process for future eligibility criteria or decisions or policies that might be coming down the road. Do you have any -- I'm just trying to form this, put this in the form of a question. It's very difficult. Some other things in my head are getting in the way. But very simply stated -- and I've said this several times -- that I wouldn't have given this authority to DiscoveryWorks Global 888.557.8650 www.dw-global.com 3/20/12 - PUBLIC HEALTH - RES. 120090 Estelle Richman, nor would she have accepted it, because the instant dialogue that's going to take place if the Administration or the Legislature wants to make a cut, then they will just ask the Secretary of Welfare to make the eligibility changes. My concern is that we've seen one small piece of evidence as to how they want to change eligibility, and that's the asset test. Do you have any projections whatsoever and does the County Commissioners and Administrators have any position on what that impact could be of Act 62's implementation? And that, as you've said, is an ongoing process that will be invisible behind the scenes.

Remember, we don't know the answer yet on the food stamp piece. There are others here who have projections, and I'm going to let them answer that question. What I will say is, remember as well there was an Act 22 regulatory DiscoveryWorks Global 888.557.8650 www.dw-global.com 3/20/12 - PUBLIC HEALTH - RES. 120090 process that was begun about three and a half weeks ago that has to do with what have been called the loophole kids, so children who are disabled from families whose income is above 200 percent of poverty. Those families receive Medical Assistance, and through the rule-making under Act 22, the Secretary has promulgated a rule saying that those families will now have to pay co-pays. Well, the way that that was done means that service can't be denied to those individuals. So that's really good news, because they're Medical Assistance eligible. So providers are supposed to collect those dollars. Under the physical health part of Medicaid, providers can collect those dollars, and the physical health managed care organizations can cut the dollars to the providers. So a doctor who has a contract with an insurance company can get less money from the insurance company even though the insurance company is paid DiscoveryWorks Global 888.557.8650 www.dw-global.com 3/20/12 - PUBLIC HEALTH - RES. 120090 by the state. But for counties that have the mental health side of this, we're not allowed to change the funding formulas to providers. So the cut that the state made in Act regulation around loophole kids 8 will actually be a cut from Philadelphia. 9 It's a cut to the counties. Most 10 counties didn't figure that out, because 11 it was hidden in the rules, and the rules 12 were 102 pages or something long, and it 13 took us probably a week and a half to go 14 through the whole thing and trace it out 15 and ask six questions. 16 The number of individual rules 17 that have to be made for the Block Grant 18 is extraordinary. Just the time it's 19 going to take to tease each of them apart 20 and figure out where at the end of the 21 day the rule hits and what it means and 22 then have to write responses and go to hearings and see if we can change the rules, it's an extraordinary amount of work that's going to have to happen, I DiscoveryWorks Global 888.557.8650 www.dw-global.com 3/20/12 - PUBLIC HEALTH - RES. 120090 figure, in a 30-day period.

Well, Commissioner, I welcome that articulation of that policy. For years my initial advocacy for kids with disabilities was around that specific loophole issue. It is a pejorative term that makes it look like these families are not -- they're breaking the law or they're somehow skirting regulations and getting something they're not entitled to. That is nowhere near what the truth is. One of the issues, as you've wonderfully articulated, the impact is not easily definable. Some of these families have children who break TVs every day or they're so medically fragile, you cannot predict what the instant cost is going to be from a functional standpoint from that family, let alone from a financial impact. The issue around the loopholes, I find it curious that this increase is not considered a fee increase, which is a DiscoveryWorks Global 888.557.8650 www.dw-global.com 3/20/12 - PUBLIC HEALTH - RES. 120090 tax, but I do believe -- and I'll say this emphatically -- for all those families, I believe this is a tax increase for the most vulnerable in the Commonwealth of Pennsylvania, and darn it, if they're the only ones that are going to be taxed in this conversation, that upsets me greatly. And I will bring this to a close by emphasizing that the whole discussion around the loophole issue brought us to a resolution where Governor Rendell said that he will leave the loophole kids alone forever, forever. That also resulted in us passing legislation that provided that the insurance companies of the Commonwealth of Pennsylvania under Act 62 collect some of those fees. To date -- and this isn't a question; this is a flat-out statement -- the Commonwealth of Pennsylvania has not implemented Act 62. There's $28 million a year on the table because they refuse to go after the DiscoveryWorks Global 888.557.8650 www.dw-global.com 3/20/12 - PUBLIC HEALTH - RES. 120090 insurance companies to implement Act 62. To my knowledge, there are no discussions taking place in the Commonwealth of Pennsylvania surrounding the implementation issue and there's $80 million that is owed this General Fund. At the same time, they're cutting the line item just, just, just to autism by maybe percent. Eighty million 11 dollars, that $80 million under an 12 informal discussion was supposed to go 13 back to fund the autism waiver and the 14 ACAP program. I'm not greedy enough to 15 say that I want that whole $80 million for autism, but I'm going to tell you something, that $80 million belongs in the General Fund for health and human services, and my kids shouldn't be the only ones that are paying the tax in the Commonwealth of Pennsylvania, and the insurance company shouldn't be allowed to skirt their legal responsibility and obligation to pay $80 million for the diagnostics and for the medical supports DiscoveryWorks Global 888.557.8650 www.dw-global.com 3/20/12 - PUBLIC HEALTH - RES. 120090 they need to access their education. So I've said my peace, and I know I've taken too much time, but I thank you, Madam Chair.

Thank you very much. We do have about -- (Applause.)

Thank you. We have six more panels, so --

I apologize for that.

No. It's okay. Just keep your questions short. We do have -- thank you. Any other questions for the Commissioner? (No response.)

Thank you so much for taking time to come in and share with us the issues around this subject. (Applause.)

I want to say to the other panels, we have the County Commissioners coming next, but we DiscoveryWorks Global 888.557.8650 www.dw-global.com 3/20/12 - PUBLIC HEALTH - RES. 120090 do have State Senator Vincent Hughes here who will come and make a comment. He is in the Legislature. He's a Senator and Chair of the Appropriations Committee in Harrisburg, and he will give us his take on what's happening there. Thank you. And then the County Commissioners will come forth. (Witness approached witness table.) SENATOR HUGHES: If I may get my notes out.

Yes. SENATOR HUGHES: First of all, let me thank Council for the invitation to come down and just spend a few moments, and I'll take a few moments, because, quite frankly, the length and breadth of the conversation that should be had, some of the details that former Speaker and now Councilman O'Brien talked about are very real, very pertinent, and we need to get into some of those details. com 3/20/12 - PUBLIC HEALTH - RES. 120090 least have two or three more of my staff people here to help walk through line by line some of the issues. I'm just going to give you a general oversight, tell you what it is that we're observing, and really thank you for this collaborative process that I think needs to continue after this point. First of all -- and I've said this publicly, so I'm not speaking out of school -- we're very concerned about the general math that's being utilized by this Administration in terms of how they're calculating their budget. We're very concerned about the math. There's a history in this Administration with respect to its math where -- just to give you a brief example, last year the Governor's folks projected a $79 million budget surplus for last year's budget and the budget surplus wound up being over $785 million. It was off dramatically. Okay? com 3/20/12 - PUBLIC HEALTH - RES. 120090 address in March. We said that they were off. They still held to those numbers all the way up until June of last year when it became clear that they couldn't come anywhere clear. So we have some general concerns about how they're doing their calculations. This year's budget projection for a deficit of $719 million we believe is probably off by a couple hundred million dollars. It probably should be somewhere close to about $500 million. The Independent Fiscal Office that was just established by the General Assembly, signed off by the Governor, is supposed to be an independent entity that provides the General Assembly essentially an independent analysis of the numbers in Harrisburg. Their initial assessment is that the deficit is probably closer to about $500 million. So, again, we're very concerned about the math that's being utilized. com 3/20/12 - PUBLIC HEALTH - RES. 120090 about the math, is, there was a determination made by the Governor and the Secretary of Revenue to adopt something called accelerated depreciation. And I'm not going to get into all of the details of it because, quite frankly, it's probably a lot more complicated than most of us can probably comprehend. But they accepted a federal rule that they didn't have to accept. They calculated that that would have probably about a $200 million cost on the state budget. The numbers are now in. That's probably twice as much. The probably cost on the state budget is probably around $400 million. A number of professionals at Shippensburg University have substantiated that. Folks at the national level have substantiated that, and that's a national phenomenon. So very concerned about the math. com 3/20/12 - PUBLIC HEALTH - RES. 120090 at least two ways to deal with a deficit reality. You can deal with cuts, which is one way. You can deal with a growth strategy, which is another way. You can try to create efficiencies in government, but you could also try to grow the economy, try to put people back to work, do economic incentives to do projects and create jobs and try to grow the economy. So far, the Administration has not adopted a process to deal or any programmatic agenda to try to grow the economy. In January of 2011, Pennsylvania was the seventh fastest growing job economy of any state in the nation. We were ranked seventh. Now we're ranked in the bottom quadrant. We've dropped from seven to in the bottom percent of all states in terms of job 22 growth and job creation and economic 23 development. com 3/20/12 - PUBLIC HEALTH - RES. 120090 about a third. Probably about $200 to $300 million of the Department of Community and Economic Development have been cut out.

So that's, as you all know in this body, that's projects we can generate, that's funding we can generate from Harrisburg that could come down to the region, come down to local municipalities and invest in local economic development activities. And we have a lot more numbers that can go into a lot of that whole area, but I'll just put those on the side for now. Many of you have heard, getting specifically, in terms of the direction the Administration is going in. Many of you have heard some of my comments and have heard me say that this Administration has his foot on the neck of working individuals and low-income individuals. We stand by that. com 3/20/12 - PUBLIC HEALTH - RES. 120090 stamps, the piece around cutting folks off of Medical Assistance and having them have to reprove themselves to get back in. The cuts in education expenditures in the last year's budget, over a billion dollars, has resulted probably about a job loss of 15,000 people across the Commonwealth of Pennsylvania, who were teachers and educators and folks who work in the educational system across the state; has forced about 70 percent of all the local school districts across the State of Pennsylvania to raise local property taxes; has forced most of our higher education institutions at least on the public side to raise tuition rates for about 7, 8 and 9 percent, in addition to other fees that they attached on to a student's expenditures. com 3/20/12 - PUBLIC HEALTH - RES. 120090 agenda that we don't think is consistent with the needs of the people of the Commonwealth of Pennsylvania or is consistent with sound economic policy or sound budget policy to try to achieve an end. We work closely with the City. Dr. Schwarz and his office have been very helpful in terms of giving some very specific and detailed information in terms of the impact on the City of Philadelphia. Those -- I cannot -- I was listening to Dr. Schwarz provide his testimony about how he describes the safety net of services, especially in the behavioral health area and the folks who are living on the margin and how fragile that safety net already is, and with these cuts that will happen, clearly the hole that will be torn in that safety net will be wide, dramatic. The conversation that Dr. com 3/20/12 - PUBLIC HEALTH - RES. 120090 drugs for some kind of behavioral health issue and those services are brought out to their homes and if you miss that service -- and all of you know about this. I'm not preaching to the choir -- I am preaching to the choir. You all know about this. Someone misses that one day's worth of prescription care, they wind up possibly lost in the entire system, and it could be days, weeks, months before they're ever found again. I see my friend Brian Eury here from the hospital folks. They will wind up in an emergency room somewhere, and that will wind up costing the State of Pennsylvania more money than they've saved in terms of making cuts. And just if I can just roll back. We did an analysis on the whole food stamp piece, and as all of you know, that that reduces no spending of state dollars. com 3/20/12 - PUBLIC HEALTH - RES. 120090 time with state personnel, state public workers trying to do the asset test. The dramatic increase in overtime expenditures in that particular category I think is almost 600 percent of those workers in terms of the overtime that they're putting in to try to deal with that whole area. And many of you know what's happening in most of our public assistance offices. The level of pressure on those workers now to try to deal with the kinds of issues that they're dealing with, in addition to the recessionary reality that exists where there's already an increase on the service area, is dramatic. We've looked at various saving options, because, again, you can create some savings in the Commonwealth to try to minimize the cut. Councilman O'Neill -- and I always want to call him the Speaker.

O'Brien. SENATOR HUGHES: O'Brien. com 3/20/12 - PUBLIC HEALTH - RES. 120090 sorry. Denny, Speaker, because I've always been calling you Speaker for a while -- talked about the Capital Stock and Franchise Tax. That's a $275 million reduction that's supposed to go into place in this year's budget. If you suspended that for a year, you could save $275 million right there. That could be pumped back into the state budget to deal with some of these issues. Or if you postponed it for a half a year, so instead of $275 million, it was $140 million reduction, then that's $140 million that you can make available. We believe the closing of the Delaware loophole, which has now come in a bipartisan conversation out of the House of Representatives, our assessment is that that's probably about $150 million that could be saved or generated for the Commonwealth of Pennsylvania. com 3/20/12 - PUBLIC HEALTH - RES. 120090 that could be utilized to save state spendings. And, you know, I could go on and on. We have a prescription drug program, Madam Chair, that different 7 agencies, state agencies -- 17 different 8 prescription drug programs in Harrisburg 9 utilized by nine different state 10 agencies. Well, we figure if you 11 collapse them into two or three, we could 12 probably save the state about $25 million 13 just in that area alone, which could have 14 a significant impact in terms of 15 restoring funding into various different 16 areas. 17 On the growth conversation, there's tremendous amount of things that could be done. There's probably about a billion to $2 billion of work, of spending that could be spent right now out of Harrisburg that could drive economic activity, especially in our transportation conversation. com 3/20/12 - PUBLIC HEALTH - RES. 120090 everyone agrees that that's probably one of the quickest and fastest drivers for putting people back to work, because it has a ripple effect, a ripple effect across various areas of the economy and the business structure. When you drive more activity in transportation, when you're fixing roads, when you're fixing bridges, you got to buy concrete. Somebody has got to make that stuff. Folks go back to work. It has an incredible ripple effect. We see a number of different areas where this can go on, and what I'd prefer to do is provide -- to take a lot of what we have here, combine it with some of the documents that we've already prepared in Harrisburg and share it with you in a more detailed fashion so that you can walk through everything and see clearly what it is that's out here. com 3/20/12 - PUBLIC HEALTH - RES. 120090 other communities across the Commonwealth of Pennsylvania, because our economy is so inextricably intertwined with state support with our hospitals, with our higher education institutions, the economies that come out of all of this, how everything mixes together. When the state gets a cold, we get pneumonia. When the state chooses to have reductions and not be thoughtful, and not be thoughtful about how to do economic incentives -- if you go back eight or nine years ago, the first year of the Rendell Administration, significant budget problems at that point. We did some efficiencies, we did some cutting, but at the same time, we also did a $2 billion economic stimulus plan at Harrisburg to drive economic activity. The result of that is we've had a lower unemployment rate in Pennsylvania than the national economy. com 3/20/12 - PUBLIC HEALTH - RES. 120090 Administration about what can be done, what the alternatives are and how we can approach this in a much more thoughtful, more compassionate fashion.

To put kids in a classroom, 45 kids in a public school classroom, to ask students who started off two years ago, started off two years ago going to Cheyney or West Chester or Temple University, paying X dollars and now have already received a 9 percent tuition increase and probably have another 9 percent tuition increase on top of that, to ask those students and those families to have to go through that, without looking at these other options, is a crime, and it's a crime being committed on all of Pennsylvania citizens. It's taking the state back. And specifically it's a crime being committed on the citizens of Philadelphia, because it does not respond to the reality that exists here in the City. com 3/20/12 - PUBLIC HEALTH - RES. 120090 entire region and impacts the entire Commonwealth. I got lots of pages, Madam Chair. I'm not going to do that on you right now. I appreciate you allowing me to come in and speak at this point. Whatever way we can be helpful. We've had a very good close working relationship with this Council, with the Mayor's Office and communicating with our offices with the entire Philadelphia Delegation. Senator Kitchen is our Chair, and very communicative, a very close working relationship. We want to keep that going on, but we do not need to let the voices represented by you be silent in this process. They have to be heard. Thank you very much.

Thank you. (Applause.)

What do you think our chances would be in influencing the members of the -- well, I DiscoveryWorks Global 888.557.8650 www.dw-global.com 3/20/12 - PUBLIC HEALTH - RES. 120090 know you can speak on behalf of the Senate, but you've been in the House before you went to the Senate. What do you think the thinking is there in terms of all of this and what impact any of our lobbying and doing a Roxanne Jones, taking buses up to Harrisburg? And we need a Roxanne Jones right now to go and knock down the Governor's door. That's how I met her back in the '70s. SENATOR HUGHES: God bless Roxanne.

So if there are any Roxanne Jones here, I want to talk to you about going to Harrisburg and knocking down the Governor's door to get the attention. But what do you think the impact -- what will happen in the House? SENATOR HUGHES: Madam Chair, I was -- I'm from a school of belief where you always have to keep hope alive. So I'm always going to be optimistic. I'm always going to be hopeful, always going DiscoveryWorks Global 888.557.8650 www.dw-global.com 3/20/12 - PUBLIC HEALTH - RES. 120090 to wage the fight. I was at a -- I had lunch yesterday with the CEO, Gavin Kerr, of Inglis House, a major provider of services, probably the largest provider of services for the disabled community in the Commonwealth of Pennsylvania, has services up in your area, has services, Councilman, in your area, services all over the place. It is a -- this has to be a grassroots conversation, but it also has to be a CEO/Board member conversation. These Board members for these organizations that -- and these are Board members, most of them are giving their own time, they're not getting paid for sitting on these boards or sitting on these organizations. They're giving their own time. They're spending their own energy. They've got to get invested in this. When Inglis House talks about the kinds of changes that they might have to make to provide services to people, DiscoveryWorks Global 888.557.8650 www.dw-global.com 3/20/12 - PUBLIC HEALTH - RES. 120090 that's just the tip of the iceberg, all right, of what other institutional providers, but those Board members have to get engaged. They have to speak. The folks don't go to the country club. All right? The Board members do. Okay? They hang out in different areas. They party in different places. Old friend of ours, Councilwoman Tasco, Obra Kernodle, used to talk about who parties with who and who hangs with who. They hang with those individuals.

They have their gangs. SENATOR HUGHES: They have their crew. And that's fine. We don't, you know, dismiss that, but they must get engaged and see this as important and crucial to the economic vitality of the City and this region. All right? When folks lose services, when we ask children, students, to pay percent 24 more over a cumulative period in tuition, 25 a four-year degree becomes a six-year DiscoveryWorks Global 888.557.8650 www.dw-global.com 3/20/12 - PUBLIC HEALTH - RES. 120090 process, a six-year journey, becomes debt that they just can't afford. So I think there's an opportunity. I think many members of the General Assembly are, on both sides of the aisle, in both houses, in the House and the Senate, are not comfortable with what is being presented to them right now. They'd like to see something different. They'd like to see a different proposal. We have to encourage them and help them understand that there is a different way to look at this. We are -- I believe that we're fighting not just a budget number; I think we're fighting an ideology here. And I think we have to be very mindful of that as we go forward. But they must get engaged. It's not just the folks getting on the buses, Madam Chair. It's everybody.

I agree. Thank you very much. Councilman Kenyatta Johnson. DiscoveryWorks Global 888.557.8650 www.dw-global.com 3/20/12 - PUBLIC HEALTH - RES. 120090

Thank you, Madam Chair, and thank you, Mr. Chairman, for being here. SENATOR HUGHES: Councilman, good to see you.

It's kind of spooky, because I was just talking about how you're going to play a major role in helping us and how we need to support you as you advocate for the needs and concerns for the residents of not just Philadelphia but the surrounding counties and those who will be impacted across the State of Pennsylvania as a whole. But I just want to ask just a couple of questions. You talk about there could be a possibility of an additional $200 million coming from the feds. What actual departments or agencies will be willing to -- would that actually come from? SENATOR HUGHES: One of the areas that we've looked at is probably in DiscoveryWorks Global 888.557.8650 www.dw-global.com 3/20/12 - PUBLIC HEALTH - RES. 120090 some long-term care areas where there may be some adjustments that could be made at the state level that would allow for us to draw more dollars, more federal dollars down in that area. Now, that may be the largest area that we could do that. It's currently going on. We think it could be tweaked a little bit. They need to be encouraged in that area. That's probably the biggest area. And what I think would be most productive, Councilman, is we get all of our detail folks together and share that dialogue. But that's probably the largest area. But the point that I want to urge, Councilman, is forcing folks to be creative in terms of how they do what it is that they do and maybe think out of the box a little bit. But we believe that that's a huge area that could be utilized.

com 3/20/12 - PUBLIC HEALTH - RES. 120090 mention that it would be helpful to get the business community involved. So obviously the Chamber of Commerce, who we support to provide different incentives when they come to us asking for support from businessmen through the surrounding community, businesswomen from the surrounding community, should also have a reaction to this actual budget and how it's going to have an impact on Philadelphia and the surrounding counties. So I want to take a look at that. But I think also the other component, which I have learned in Harrisburg as well, is the role of unions, and supporting both sides, just to be frank, can play a critical role in this budget process from a rank and file 20 perspective and really trying to see how those two components, the union side and the private side, can have an impact on this government. com 3/20/12 - PUBLIC HEALTH - RES. 120090 you from a strategy standpoint to push back that proposal, because just because the Governor puts it out there doesn't mean necessarily we have to accept it, but only if we can find a way from a strategy standpoint to partner and kind of be supportive across the board to see if we can reduce what his proposal is. And I believe honestly it is ideology that we're fighting against. I mean, Councilman Curtis Jones mentioned this when we talked about this early on, when you look at the numbers with the state budget, there's a decrease in social services, right? There's a decrease in support for higher education, but there's an increase on the corrections budget, particularly Department of Probation and Parole. com 3/20/12 - PUBLIC HEALTH - RES. 120090 substance abuse, drug addiction, they don't get the help that they need, they will find it on the street, robbing, stealing. Someone who has a behavioral health problem, which you don't necessarily talk about, in the prison system -- more than 35 to 40 percent of the people in the prison system have mental health issues, takes medications. If they're cut off the rolls under the Department of Human Services, they will resort to crime. And so when I look at the ideology of how this budget is being presented, it's kind of like, okay, well, we know we're going to cut here, but we're going to prepare -- you know, we already got four new prisons going up, but we're going to make sure we have some additional resources for probation officers to begin addressing those individuals who call themselves getting involved in something that's negative. com 3/20/12 - PUBLIC HEALTH - RES. 120090 time out of your schedule and coming down here and really informing us and really bringing this to light. But the business community component is very, very notable, because a lot of times as Council, they come to us for support, and you can't come to us for support and at the same time you're being silent on an issue that very much affects the same people that make your businesses strive. So thank you for that. SENATOR HUGHES: I've had -- I think two points on that. On the corrections side, Secretary Wetzel, who is our Corrections Commissioner, I found to be a very reasonable individual, and if you have not had the opportunity to spend some time with him -- I'm sure you have -- we've tried to help him link up more with the social service sides that Secretary Schwarz and Dr. com 3/20/12 - PUBLIC HEALTH - RES. 120090 Crime in Harrisburg. We believe that there's probably about $100 to $125 million worth of savings that can be utilized by dealing with some Smart on Crime policies and non-violent offenders, the same community that you were just talking about. So finally there's been some movement for it on that. I found recently that the business community has been more receptive in a broader sense, but also when you talk in a specific sense.

When you talk about the major employers here in the region, the major institutional employers, our hospitals, our higher education, eds and meds, they clearly are prepared to come to the table and talk more. What we need them to do is bring more of their friends with them, and I think this is part of a process to help encourage that. Thank you.

Senator, I know there's always a bone of contention DiscoveryWorks Global 888.557.8650 www.dw-global.com 3/20/12 - PUBLIC HEALTH - RES. 120090 about the certification of revenues. I can't be specific, but a little birdie told me that the revenues are on the upswing. So from a strategic standpoint, I would caution against doing an early budget until all those numbers are in. SENATOR HUGHES: We are not advocates of doing an early budget, but we do know -- I mean, tax -- we think the Governor is wrong on his budget deficit projections. We think he's front-loaded the hole, to make it a larger hole on the front end, so that his budget proposal can force more cuts. We know that tax receipts are running about 1.2 percent ahead of last year's tax receipts. This is all without economic development activity going on. This is all without job creation activity going on that can be funded, that can be funded right now in various different -- and PENNVEST and our Commonwealth Financial Authority, on the transportation initiative alone, 35 states have utilized a federal provision DiscoveryWorks Global 888.557.8650 www.dw-global.com 3/20/12 - PUBLIC HEALTH - RES. 120090 called a Garvey Transaction. In fact, SEPTA has utilized the provision called a Garvey Transaction where you take a portion of your federal dollars coming down to transportation and you securitize that. You securitize that. That has no 8 impact -- so it's paid off of your federal dollars coming in. It has no 10 impact on the state spending. Virginia, I believe, just did a $300 million transaction to put into their roads and highways and bridges. That's part of a $1.5 billion plan. They're not spending any state money. They're utilizing only a piece of their federal money to go and securitize it more and bring more money to the table. That puts people to work. I'm not sure what we're waiting for. We're waiting for a bridge to fall down? I'm not sure, but that's an option that is out there available right now. That's growing the economy. That's adding to that financial statement, as DiscoveryWorks Global 888.557.8650 www.dw-global.com 3/20/12 - PUBLIC HEALTH - RES. 120090 you talked about, Mr. Speaker. That's how that works. Those are options that are out there that could be done in a number of different areas that we think are the path we need to go down.

Thank you. Councilman Jones.

I will be brief, Madam Chair. We have an ambitious schedule before us. But I want to thank the Chairman for coming down, taking time out of his fight in Harrisburg to protect Philadelphia. I had an opportunity with a couple of other Councilmembers to go up to Harrisburg early on, and Councilman O'Brien is right on point and Councilman Johnson is right on point. This is a philosophical idealogical budget gamesmanship that is happening. com 3/20/12 - PUBLIC HEALTH - RES. 120090 high in the beginning and then when the actuals start to come in and they are not what you projected them to be falsely in the beginning, then you sharpen your knife for severe cuts to complement your philosophical political view, which is Philadelphia is a foreign country in the Commonwealth of Pennsylvania. So as we look at this and then it's embarrassing when those projections start to even exceed what you falsely put them up to, then what do you do? You fall back on the fact that you just are mean-spirited and want to elevate your political platform not just in the Commonwealth, but in a national way, in a national way. And Governors are taking this opportunity to not put forth the kinds of revenues that can help the most vulnerable of us in cities. And I just want to thank you, Senator, Chairman, for coming down here and sharing that with us. com 3/20/12 - PUBLIC HEALTH - RES. 120090 Council has been meeting with the state delegation, both in the Senate and in the House. More often we are exchanging information. We're finding out what's going on because of your efforts and other efforts in the House to kind of get our act in order to prepare for what we have to fight against at the state and federal level. So we thank you for sharing that information with us today. SENATOR HUGHES: Thank you, Councilman. If I could add one point, and I'll wrap up here. We have a -- one thing that I'd like everyone to pay attention to is, as you all know, there's been a settlement with the banks in terms of the foreclosure issue. Madam Chair, it's something that I know you're very familiar with and worked on many years. And Pennsylvania is scheduled to receive, I believe, $79 million to help deal with that. com 3/20/12 - PUBLIC HEALTH - RES. 120090 hearings process, Secretary of Banking, a number of other individuals in the Administration came before the Appropriations Committee and we asked them specifically what their plans were for that $79 million, and we wanted it all to go, we wanted it all to go to the HEMAP program, all to go to the HEMAP program. In fact, the Secretary of Banking indicated that he wanted it all to go to the HEMAP program, which is Homeowners' Emergency Mortgage Assistance Program. I remember. All right? And I'm not sure if the Secretary of Banking checked off his comments with the front office, but the front office has been silent, the Governor's Office has been silent on where those dollars should be going. And I put -- I make note of that because in Wisconsin where Governor Walker, the notorious Governor of Wisconsin presides, he has made a decision to utilize his share to try to fill a budget hole in Wisconsin. com 3/20/12 - PUBLIC HEALTH - RES. 120090 And so there is apparently some latitude that exists in the context of that settlement of how those dollars can be utilized. So I guess I'm kind of alerting this Council to be on notice on that, and it may be appropriate if a message or an intent from Council -- I don't want to tell you how to do what you do, but you know how to do what you do -- be sent to the appropriate individuals with a statement of your concerns about how those dollars should be spent. We still continue to have a major foreclosure crisis across the state here in Philadelphia. We get the spreadsheets on a daily basis. The one number that remains consistently red of all of our categories -- I receive categories -- is in the housing area, where it's just a huge deficit. com 3/20/12 - PUBLIC HEALTH - RES. 120090 hole.

So just put a note in that. And I would be remiss if I didn't mention seeing my good friend and colleague Senator Joe Rocks, former colleague Joe Rocks. Once a Senator, always a Senator. That's how we kind of operate. Once a Speaker, always a Speaker. But I, again, want to thank this Council for its willingness to bring the Senate to this Chamber to discuss what's going on in Harrisburg.

Thank you so much. We appreciate your coming. We again recognize the relationship between this Council and the State Legislature, the Senate as well as the House. Never worked so closely with them as we are this time. We did pass -- I introduced a resolution on HEMAP, sent a resolution to Harrisburg. We will follow up, pinpointing that now that these dollars are there, that those dollars should be used for the HEMAP program. DiscoveryWorks Global 888.557.8650 www.dw-global.com 3/20/12 - PUBLIC HEALTH - RES. 120090 SENATOR HUGHES: Exactly.

And so we thank you so much for coming and sharing. I appreciate getting your e-mails relative to what's happening in Harrisburg with the budget and your analysis. We appreciate the information. And so, again, thank you for coming. SENATOR HUGHES: Thank you very much, Madam Chair. Thank you all. (Applause.)

We now want to call up the County Commissioners. We want to thank them for coming and taking time to be a part of this discussion, because, you know, we are Philadelphia County. We do have surrounding counties. We also have -- is Mr. Doug Hill, Ms. Brinda Caroll Penyak, Ms. Joanne Kline, is she here, Mr. Eric Goldstein and Brian Eury. Would you come forward, please. (Witnesses approached witness DiscoveryWorks Global 888.557.8650 www.dw-global.com 3/20/12 - PUBLIC HEALTH - RES. 120090 table.)

We wanted to sort of give a picture that this issue is not just impacting on Philadelphia alone, that the surrounding counties, and we also have a County Commissioner Association, which is made up of all the counties across the state who deal with legislative issues in Harrisburg, and we're pleased that they have come to join us also. Thank you. Are you Mr. Hill?

Yes.

Would you please state your name for the record and begin your testimony. And thank you all for coming.

Thank you. And it's my pleasure to be with you today. I'm Doug Hill. com 3/20/12 - PUBLIC HEALTH - RES. 120090 and Government Relations team. I'll be presenting a few remarks. Brinda will be helping me as we get into questions and answers following the presentations by the rest of the panel. And at the outset too, I also want to thank and acknowledge Senator Hughes and Speaker O'Brien for the many years of assistance and understanding and leadership that they have given us on the kinds of issues that we're testifying about this morning. I'm not going to do any formal remarks. We did distribute to you our statement on the proposed 2012-2013 budget, and that's in front of you. That is really a compilation of 80 or so line items that we follow that affect county government and how they're being treated in this proposal, and you'll notice that of those, the Priority 1's almost all relate to human services. com 3/20/12 - PUBLIC HEALTH - RES. 120090 today's hearing is the fact of the percent cut in seven line items that are a part of a much larger budget. Even by the Administration's own estimates, the overall funding levels for county human services lines decreased by about 3 percent, and that's across the board, and we can comment on that in a little bit more detail later. But I think it's also important to note that this is a continuation of what's been about an eight-year freeze or decline in many of those same line items, and so it is very much a critical issue for us. But the centerpiece of today's hearing is the block grants and the proposal to merge parts of seven lines into a single block grant program and then to effect a 20 percent cut in those lines. com 3/20/12 - PUBLIC HEALTH - RES. 120090 we believe we need to treat them as two separate issues, and the reason for that is that block grants, as you heard in Dr. Schwarz's testimony, can be a valid and useful strategy in human services delivery, but we need to consider that in a separate context from the funding that's attached to it. So if the Block Grant is simply a mechanism to effectuate cuts, then we haven't achieved what we're really intending to achieve. In that context, our Association has been a long supporter of block grants. Right now, as you all know, most of the human services we deliver are through narrow categorical programs. com 3/20/12 - PUBLIC HEALTH - RES. 120090 and certainly out of separate funding streams. And that's really not the most efficient way to deal with families in need. And so we have for some time supported a reasoned and structured approach to moving to a block grant concept. So we do support, on a conceptual basis, moving to block grants, but there are a number of issues with what has been proposed so far. Certainly there is not a lot of detail in the proposal, but that will be coming. Dr. Schwarz indicated that he's part of a work group that our Association convened. We also have Allegheny County involved and we have a number of other larger and smaller counties involved as well. And what we are doing is developing a comprehensive approach on how block granting might work within the context of these lines, but, more importantly, in a broader context of the other human services lines as well. com 3/20/12 - PUBLIC HEALTH - RES. 120090 is not a short-term project. That is not something that we can accomplish in the weeks between now and the July 1st 5 beginning of the 2012-2013 budget. 6 Last year, we anticipated that 7 there was going to be a block grant 8 proposal as a part of that budget. We 9 talked to the Administration prior to the 10 proposed budget's release. Ultimately as 11 we worked through the process, we were 12 able to achieve the language in Act 22, 13 which required DPW to work with counties to develop pilot programs, and then of the pilot programs that worked, replicate those in a broader context in the 2012-2013 budget.

Last October, we presented an 18-page detailed outline of those funding streams, where the opportunities were for block granting, where the opportunities were for other efficiencies in service delivery, and that's something that we have been discussing behind the scenes with DPW from that time until now. com 3/20/12 - PUBLIC HEALTH - RES. 120090 Unfortunately, the pace hasn't been what we might have liked. We had hoped to have pilot programs in place by now. And so it is with some trepidation that we support moving forward with some concept of block granting, but our core support for that remains the same. It is not something that we can do wholesale, statewide, every county 1st of July. It has to be a -- there has to be a phased-in approach. We have to start with the counties that have the capacity administratively and fiscally to adapt to block grants, and then we have to allow time for the other counties to properly plan, properly restructure and, as they are able, to properly put in place these types of -- this type of administrative structure. On the fiscal side, I mentioned earlier this is the eighth or ninth year of a steady series of freezes and cuts. com 3/20/12 - PUBLIC HEALTH - RES. 120090 these lines is unsustainable, and in our budget piece, we have indicated that we have to -- the starting point has to be maintaining -- at least maintaining the funding levels from the current fiscal year. And when I talk about the current funding levels, I mean what was originally appropriated. As you know, we've also been subject to a budgetary freeze at the beginning of 2012. We have some understanding, at least from many members of the General Assembly, that they don't like the level of cut that's been proposed. They are willing to work toward a different number. We don't think it's incumbent upon us to suggest what an appropriate cut should be, and so our starting point is at least hold us harmless from where we are now and allow these programs to continue. com 3/20/12 - PUBLIC HEALTH - RES. 120090 waste and fraud. We have been involved with the Department in a number of respects trying to find cost savings elsewhere. The MATP program is one example. Behavioral Health is another, and certainly there are others as well. We, though, have been emphatic that we are not the agents of waste and fraud. That does not exist at the county level, and it's inappropriate to try to find the $400 million savings on the backs of the programs that we're providing at the local level. Moving forward, you had some discussion of revenue alternatives. I think it's also valid to have a discussion of where the Commonwealth's fiscal picture really lies. This will be the first budget in which some of the estimates are prepared by the new Independent Fiscal Office. com 3/20/12 - PUBLIC HEALTH - RES. 120090 million worth of difference there. We have had discussions, as I said, with a number of legislators on where their opinions lie on some of the cuts and other things that have been proposed. And so we think that there are opportunities there to restore funding levels to where they need to be. I also need to emphasize that we do have a productive working relationship with the Corbett Administration. We were called in in advance of the Governor's budget proposal this year to have some preliminary discussions on where block granting might go. They were not willing at that point to talk about funding levels, but they were and are willing to talk about how block grants can be put in place productively. And there's certainly recognition of the broad array of issues that we're going to face if we are going to be able to do this successfully. com 3/20/12 - PUBLIC HEALTH - RES. 120090 maintenance of effort or county joinders or any number of different administrative issues that have to be dealt with in order to bring program areas together and efficiently provide those services.

But at the core, block granting does present us that opportunity if we -- and it really runs at both ends of the spectrum. At the administrative end right now if you take these seven lines, we're doing seven plans, seven reports, seven audits in seven different DPW agencies. If we can block grant that, one report, one budget, one plan, one audit. At the other end of the spectrum, and perhaps more importantly, when we deal with families with multiple issues, if we can block grant and if we don't have to narrowly fit each piece of that family's issues into a separate category, we can certainly provide more holistic coverage, more holistic services to that family and much more efficiently. com 3/20/12 - PUBLIC HEALTH - RES. 120090 And so we think it is worth pursuing on that basis. org. We continue to populate that as additional information is developed, and we hope you'll take advantage of that. We do also appreciate Dr. Schwarz being part of the discussions that we're having on this and other issues, as well as other staff in the Administration who participate in other affiliate groups of ours. And I'll just finally say that as an organization, I think you appropriately recognize that the smallest county is no different from Philadelphia in the types of services that we provide and the citizens that we are trying to serve. com 3/20/12 - PUBLIC HEALTH - RES. 120090 is there and is available.

Thank you very much. Who is going to be next? Let me ask -- well, we'll wait until the testimony is over and then I'll ask a question. Go ahead. Would you identify yourself.

Yes. My name is Eric Goldstein. I'm the Administrator for Behavioral Health and Developmental Disabilities in your neighboring Montgomery County. Thank you for giving me this opportunity to speak with you today on behalf of Montgomery County and its citizens. I have a lot of things in my testimony that are very similar to what Dr. Schwarz said, what Dr. Evans has been saying all along. Dr. Evans and I have a wonderful relationship. Michael Covone and I have a wonderful relationship. I just want to make a few quick comments then. DiscoveryWorks Global 888.557.8650 www.dw-global.com 3/20/12 - PUBLIC HEALTH - RES. 120090 This is the year that we're supposed to take 30 people out of Norristown State Hospital. The story was going to end at that, but it really begins there, because we can't do that if this is going to be the budget that's going to be in place. The impact on homelessness, emergency rooms, all the things that were mentioned by people who spoke earlier will be doubled and tripled. We built this infrastructure over a 30-year period of time, and now in one year it could be taken down. Again, I don't mean to be repetitive and redundant, so I want to address a few other things. We've been working very hard for the last number of years on supportive housing, employment. These are the things that will be threatened enormously by these budget reductions. It seems to me that with the Corbett Administration requesting us to move people along, get them off the rolls, get DiscoveryWorks Global 888.557.8650 www.dw-global.com 3/20/12 - PUBLIC HEALTH - RES. 120090 them self-sufficient, the whole idea is counterintuitive. Cut the funds that would get people employed and get them off the rolls doesn't make any sense to me. For individuals with developmental disabilities, fewer families now will be receiving services, period. Secondly, that safety net is enormous for developmental disabilities or intellectual disabilities, as they call it in other places. That safety net will be taken down, and there will be a scary situation at least in every county at one point or another during the year where someone will have no place to live, no place to go and no way to think it through. I think that the other matter that gets ignored sometimes when we look at this budget is that it does affect the drug and alcohol system. Even though these funds come from the Office of DiscoveryWorks Global 888.557.8650 www.dw-global.com 3/20/12 - PUBLIC HEALTH - RES. 120090 Mental Health, it is also the Office of Mental Health and Substance Abuse Services. Their funds are already woefully low, and now with reductions in Act 152 and BHSI funds, which are there for people who fall through the cracks, who can't stay on Medicaid for whatever reason, with those funds now being threatened, we're going to have an enormous problem with people with drug and alcohol problems not being able to receive treatment. My conclusion actually in writing is, throughout my county and region as a whole, we see an increased cost in emergency service, jail days, physical health service, demands on shelters, stress in urban areas, and agency unemployment. These are costs that may very well equal the reduction. Yet if it's going to cost that much to make up for what they're reducing, they may be equivalent. That doesn't seem fair or sensible. DiscoveryWorks Global 888.557.8650 www.dw-global.com 3/20/12 - PUBLIC HEALTH - RES. 120090 The effect on the region as a whole will find many people without homes and services and nowhere to go to receive them. Thank you.

Thank you very much for your testimony. Ms. Kline.

Good morning. I'm Joanne Kline, the Director for Aging and Adult Services in Montgomery County, and as Eric has mentioned and everyone here today has, we're delighted to be included, because this is not just an issue for Philadelphia. As CCAP has mentioned, this is an issue across every county across the state, and in Montgomery County just as here in Philadelphia, the cuts in the recent years have been substantial. In my office alone, we manage the Human Service Development Fund and the Homeless Assistance programs. Both of these funds have seen dramatic reductions in recent DiscoveryWorks Global 888.557.8650 www.dw-global.com 3/20/12 - PUBLIC HEALTH - RES. 120090 years, up to 71 percent in the HSDF funding just recently, and on top of that now to be told percent is significant. 5 At a very key time in our 6 county and in the City of Philadelphia 7 when homelessness and housing is really 8 something that we have been able to 9 address as an issue, not just an issue 10 locally but regionally as well, we're 11 developing a blueprint for housing that 12 is based in many ways on some of the 13 concepts that began here in Philadelphia, 14 and it's beginning to work in our county. 15 We're very encouraged by that. However, 16 with a 20 percent reduction, it is going 17 to be very difficult for us. 18 We applaud the concept of a 19 block grant if it can be done 20 appropriately and if it can be funded. Unfortunately, this does not have the foresight necessary. What is happening is, the strings that are attached already to the numerous grants that are very disparate in nature are being put DiscoveryWorks Global 888.557.8650 www.dw-global.com 3/20/12 - PUBLIC HEALTH - RES. 120090 together in one large and unwieldy block grant that really challenges us at the county level to then decide who can we choose, how can we choose. And if I could digress for a moment, I'll just tell you a story. One of our discussions in our Commissioner's office recently we were talking about that. It almost feels as if you're a member of a very large family with a lot of children whose shoes are just worn down, and you're looking and you're trying to decide how you can address the need. They all have tremendous need. We all have tremendous needs, and in trying to decide with percent 18 less, so many in need, where is the 19 priority and looking ahead to the 20 long-term impact on the counties, that is of a significant concern in Montgomery County as well as in Philadelphia. So I applaud the comments of everyone that has come before us and the County Commissioners Association for DiscoveryWorks Global 888.557.8650 www.dw-global.com 3/20/12 - PUBLIC HEALTH - RES. 120090 being here as well. Thank you.

Thank you so much for coming. We appreciate it. We have a great cooperative relationship with Montgomery County, and we thank you so much for coming. Mr. Eury. We'll ask the questions, so don't leave. We'll have questions at the end of your testimony.

Good afternoon, Madam Chair and the Committee. Thank you very much for the opportunity to testify today. I'm Brian Eury, Legislative Director for the Delaware Valley Healthcare Council of HAP. We represent and navigate for more than 50 acute and specialty care hospitals and health systems, over 30 facilities that provide inpatient behavioral health systems and 20 physical rehabilitation facilities. com 3/20/12 - PUBLIC HEALTH - RES. 120090 discussion on Resolution 120090, otherwise the proposed Human Services Development Fund Block Grant. The Block Grant in itself is an initiative, important aspect proposed for this fiscal year in the Pennsylvania Department of Public Welfare, but what we have found out, it has also provided a brighter light on some of the other proposals that are coming through to the public Department of Welfare in this year's budget. Deputy Mayor Schwarz has already gone through all the appropriate funding cuts, about $41 million total to Philadelphia in terms of 37 of which to Department of Health and Human Services and 7 million to Department of Health. As part of the City's healthcare safety net, hospitals in Philadelphia and the entire Delaware Valley are extremely concerned about the proposed Block Grant as it's currently written on the City's most vulnerable. com 3/20/12 - PUBLIC HEALTH - RES. 120090 about $320 million in addition to General Assistance program that provides bridge support for low-income people who are temporarily unable to work. General Assistance affects roughly 31,355 people in Philadelphia, which is roughly 50 percent of the enrolled -- total enrollment of General Assistance in the Commonwealth, and when you add the surrounding collar counties or the suburban counties, it roughly appropriates about 58 percent. So once again, it's about 60 percent of all enrollees in General Assistance are coming from the Southeast. General Assistance, as I've already mentioned, is temporarily disabled or sick adults without children, domestic violence survivors, adults caring for someone who is sick or disabled, and adults participating in alcohol and other drug treatment programs. com 3/20/12 - PUBLIC HEALTH - RES. 120090 assistance, next year's budget calls for changes in General Assistance eligibility, which will make it more difficult for those with temporary disabilities to qualify for Medical Assistance health insurance. As a result of that, we're expecting a negative projection of $24 million to bad debt, which basically just goes back into the system and just increases the overall cost of healthcare in the state but also by nation. 55 million in the Southeast alone, Philadelphia and the surrounding counties. com 3/20/12 - PUBLIC HEALTH - RES. 120090 adults without insurance has increased percent from 2008, and visits to emergency room use has been on the rise. In the past year alone, we have a net increase of about 4 percent. Now, that's just the Southeast. So that's the six counties -- or the five counties. But when you look at the individual hospital within your district, that can be up as high as 7 to 10 percent increase in emergency room use. Hospitals operate seven days a week, 365 days a year, hours a day. 15 We have a moral obligation. com 3/20/12 - PUBLIC HEALTH - RES. 120090 times and then when they do present, they're already in a much more severe case as they would have been a month beforehand when they first initially got sick. The trickle down, it's basically, in our mind, it's a cost shift. It goes from the state to the county and then from the county to the hospitals. So it really is a huge concern to us. And we appreciate the opportunity to present our comments today, and we look forward, as always, to working with you and this legislative body, not on just this issue but every issue coming through that involves healthcare.

Thank you very much. We appreciate your testimony, and thank you for waiting. When we have these hearings, they tend to go a little longer, but people come to present their information. Dr. Schwarz talked about how the present current system took years and DiscoveryWorks Global 888.557.8650 www.dw-global.com 3/20/12 - PUBLIC HEALTH - RES. 120090 years to build and sort of work on, and now we're going to change the whole system that's taken 30 years, as Mr. Goldstein said, and just collapse it into three or four months and say let's change it. And so I think that it needs a little more discussion, slower implementation, if that's the way they're going, but just not to throw services out the door that people can't access. Councilman Denny O'Brien.

Madam Chair, I'm very dedicated to try to be brief. I know I'm --

Please.

-- mostly challenged, but I will say that -- and I'll bring up one other point. When I wrote Act 62, there was a safety net put in that the Commonwealth would pay if the insurer is denied. They cut your budgets by $28 million. You got to get up off your butts and tell them you want your money. Act 62 owes the Commonwealth of DiscoveryWorks Global 888.557.8650 www.dw-global.com 3/20/12 - PUBLIC HEALTH - RES. 120090 Pennsylvania $80 million, and that's money that affects your services. I'm not as optimistic, Doug, of the implementation of a block grant. It took us years to do the prison reform 7 package. I don't see where the 8 professional development is if you're 9 going to cut 20 percent. I don't see 10 where the cross training and cross 11 agencies, Eric, is going to happen. You 12 have people with developmental 13 disabilities who also have mental health 14 issues, not counting the developmental 15 disabilities who lose their parents and 16 also have depression issues, which is 17 also a very discounted mental health 18 issue. 19 Brian, the fact that you are 20 asked to absorb Medical Assistance cuts 21 is just absurd. When the insurance 22 companies cut the budgets of the Delaware 23 Valley Healthcare Coalition back in the 24 '90s, that resulted in the hospitals 25 cutting nursing positions. Then -- it's DiscoveryWorks Global 888.557.8650 www.dw-global.com 3/20/12 - PUBLIC HEALTH - RES. 120090 like the water balloon. When you cut those nursing positions because you have to cut actual costs, medical errors go up. Nurses stop going to nursing school because they can't get jobs. It's the same thing that's going to happen over here with our providers like SPIN and PATH and all the wonderful social service agencies. When these jobs disappear, that creativity goes along with it. It took us seven years to negotiate ACAP with CMS, seven years, and a long time to do the adult waiver. The whole thing that's missing here -- and that's why the Chairperson, Chair Lady was very indulgent with me -- there is no 18 process to bring the communities in to represent that we understand who they are. You cannot create the efficiencies that are necessary unless bring them in. The buy-in has to be first and we can start talking about creating some efficiencies. I'm very concerned about this. I'm glad that you're here, and I DiscoveryWorks Global 888.557.8650 www.dw-global.com 3/20/12 - PUBLIC HEALTH - RES. 120090 will end my brief remarks.

Thank you.

I hope they were brief enough.

Is anyone else going to testify? (No response.)

Thank you so much for coming. We appreciate your testimony, and we appreciate you, County Commissioners, for sending us your information. (Thank you.)

Thank you. (Applause.)

We'd like to now call Panel 3: Senator Joseph Rocks, Henry Nicholas, Paul Sachs, Sharmain Matlock-Turner. She was here. She may have had to leave. And Sister Mary Scullion had to leave, but she left her testimony, which will be part of the record. Oh, Sharmain is still here. Thank you. DiscoveryWorks Global 888.557.8650 www.dw-global.com 3/20/12 - PUBLIC HEALTH - RES. 120090 (Witnesses approached witness table.)

Good afternoon.

Good afternoon.

Who is going first? Senator Rocks, I think we have you first. Good afternoon and thank you for your leadership. You were our State Senator for a long number of years and very helpful to our community. SENATOR ROCKS: Thank you, Madam Chairwoman and distinguished members of Council. Thank you for the honor and, more importantly, for the opportunity. When you move in grade from Senator to CEO, I will tell you one of the things that becomes intolerant is redundancies. And so having heard all of your valued testimony today, I will not -- I'll leave my statement, three pages long, to your submission. com 3/20/12 - PUBLIC HEALTH - RES. 120090 like to make a couple of points that listening to the experts that you assembled here today and depth of concern around these cuts, these issues. It has been my privilege now for over years to be Chairman and CEO 8 of the largest not-for-profit provider in 9 the United States of behavioral health 10 services. We are involved in the whole 11 array of mental health services, 12 including addictions, children's services whereby coming to know not just Representative and Speaker O'Brien extremely well over the years, but admiring his unbridled passion over children on the autism spectrum. I will tell you in NHS today, we have over 2,700 children on the autism spectrum within our care. Across seven states, I have the privilege of employing over 13,000 people. They all pay taxes. com 3/20/12 - PUBLIC HEALTH - RES. 120090 the delivery of our services, in addition to a very committed, dedicated, direct care workforce. Of those 13,000, strange people, they have mortgages, they make car payments, they too pay tuitions. So once in a while as a CEO of an endeavor of this size, I do get to remind my other business colleagues while we're not in the business of making iPods, we are in the business of very fragile and vulnerable lives to be cared for. We also are a very major business enterprise and take the responsibility of that seriously as anybody who is out there making widgets today, except we think our call and our responsibility is much more serious. In Philadelphia, we are by far the largest provider of these services, including therapeutic family and therapeutic foster care. com 3/20/12 - PUBLIC HEALTH - RES. 120090 Park -- I'm very happy whenever I see my suburban colleagues here. A little over 900 heroin-addicted people walk through our door at 5000 Parkside Avenue today. They do it seven days a week. It is one of the best managed and highest accredited treatment facilities in this nation. We're very proud of the work that we do there, and, quite frankly, the cuts that we are staring at would cause us to greatly cut back on what is the level and the quality of those services, as one example. In Philadelphia, we do serve 15,780 adults and children across all of our services, our service lines. There are 3,200 staff that are citizens of Philadelphia. Our combined revenues here with the City and the state and federal government primarily as our funder, it's a little over $130 million and a payroll of approximately $92 million that we have in Philadelphia County alone. com 3/20/12 - PUBLIC HEALTH - RES. 120090 couple of statements that were made. We are the only provider of these services. I have consumers that come from 67 counties of Pennsylvania. So that's every county of Pennsylvania. And for those who may want to be aware of this -- Secretary Alexander maybe should hear me state this, although I'll do it to him in person -- I'm not treating any mentally ill white tail deer nor black bear. The clients that we have come from every county of this Commonwealth, where we do employ just in Pennsylvania alone over 10,000 people. We operate over seven states out of 700 facilities. com 3/20/12 - PUBLIC HEALTH - RES. 120090 this mission and importance, I have served under eight Secretaries of Welfare.

If you ever had asked me if I would dream of the day when I would look at what is proposed, not just in this budget but what is happening in and out of that department -- and I've been through the Helen O'Bannons of the world and the John F. 's of the world, the Estelle Richmans. I've been through Feather Houstoun. It didn't matter if they were democrat or republican, to be very frank about it. There's something that goes with the role of being a Secretary of that department in this Commonwealth that requires a sense of advocacy on behalf of the very vulnerable lives in this Commonwealth. Never did I believe -- and, Councilman, you made mention of it, and I heard it mentioned by one of your colleagues -- that an ideology would dictate what was to happen. There's no 25 big mystery here. com 3/20/12 - PUBLIC HEALTH - RES. 120090 targeted to be hit the worst. If you looked at the Medicaid budget, and while I leave you a lot of numbers, they're not new to me. I sat in the second chair of Appropriations in the Senate of the Commonwealth. Thank God we have the lionhearted Vincent Hughes who is there and on the forefront of trying to take this challenge on, as he effectively does, by the way. But this is not about numbers, as has been said. 6 billion in Pennsylvania for any one of us, several, about 200-plus providers in Pennsylvania, in the world of intellectually challenged people to provide those services. It's a big number. It sticks out. This has been an audit exercise. This has not been by this department in its budget-making having anything to do with the lives that they are legally charged to protect. I agree with Senator Hughes. I'm not the first. com 3/20/12 - PUBLIC HEALTH - RES. 120090 and with Board members to greatly mobilize every voice that we can. The last thing I'll leave you with -- and so sincerely thank you for this forum and what you're doing here today. You know, it's interesting, if you look at an overall $29 billion state budget where you pick the cuts, the people that we're here talking about today and the sincerity of this exchange, this conversation, often have no voice at all. So it's us. It's you. Thank you for this opportunity. Thank you for what has been your leadership. And certainly in Philadelphia this will be devastating to this city. Commissioner Schwarz said it very effectively and well as to the size, yes, Denny, of the safety net, the hole that can be torn in a city like ours. And the absurdity of this in the end -- I have O'Brien's impediment. We just had our national holiday on Saturday, and it's double fold for Denny and me. com 3/20/12 - PUBLIC HEALTH - RES. 120090 not only born Irish; we're very Irish. We come from centuries of storytellers, and then on top of that, I'm a politician. So you got to cut me off here any minute, Sharmain or Paul. What it is that we are facing that has to be taken on, the absurdity of it is if all this would go forward, the cost is more in the end. That's not even the cost in human lives. It's the dollar cost of this. There's a reason that we're the largest provider in every state that we're in of IDD services. The state couldn't do it. Their asylums got shut down, either by judicial edict, legislation or advocacy. Do you know that a person today with an intellectual disability still state institutionalized is double the cost of what it is at NHS for us to provide a higher quality of service and to care for that person? Double. So what are we going to do? Give everybody back to the state? com 3/20/12 - PUBLIC HEALTH - RES. 120090 reopen your institutions, get your butts sued within a month by the Justice Department all over again? There is no sense in this direction and where this is going, and the voices that are needed have to be ours, because too many of the people we represent, they have no voice. Thank you, Madam Chairwoman, very much. )

Thank you. Thank you very much. The Chair recognizes Mr. Henry Nicholas.

Thank you, Madam Chair. Madam Chair, this is a historical event. It is the only place and the only time in history that both the management and the union are at the same table with the employees. The employees who work in this system, they are the angels of mercy. DiscoveryWorks Global 888.557.8650 www.dw-global.com 3/20/12 - PUBLIC HEALTH - RES. 120090 Joe articulated all those Secretaries of Health that we both have interacted with over the years, but we've come, all of us. Our members are here. Your constituents are here. They are the angels of mercy. They are the members of my union. They are the ones who work seven days a week around the clock doing their level best to make sure that there is a semblance of dignity provided to those who they are trusted to care for. Now, we're here and we would impose on you to hear from those who have given their all to take care of them. They are here. I represent those workers who provide the services across the Philadelphia area, the more than 3,000 of them, in every single district, providing every speck of care. It would be unjust if you believe that as a result of the action taken by the Commonwealth that the people who give more than their fair share be asked to give even more. It is DiscoveryWorks Global 888.557.8650 www.dw-global.com 3/20/12 - PUBLIC HEALTH - RES. 120090 unrealistic, if you would, that if we are required to have to compete with Walmart in terms of whether there's going to be workers who will show up to provide this care, whether they should punch out and go to Walmart, because this act puts us in that place. For those of us who was compassionate enough to rise up and believe that the institutional lives of this care was an unjust proposition and fought for the change that we now have, it is this -- this puts us at no other option. I've been here in my 52 years in Philadelphia. This is my third time before this Council. It is those issues that are so passionate and so meaning and the ones that require justice that forces us to be here. We have some options. The people we take care do not. We have the option to take those patients who we fought for their freedom back to the DiscoveryWorks Global 888.557.8650 www.dw-global.com 3/20/12 - PUBLIC HEALTH - RES. 120090 state and say, Here they are. They now belong to you. What happens if that happens? We are here pleading for your intervention, because without your help, those who need our help cannot be expected to humanly ask for it. Most of the people that my members take care can't ask for the help that they need. They need us around the clock. And we need you, one, to hear from some of the angels of mercy who work tirelessly, fight with me all of the time, because they want to know why are they forced to be more passionate and more compassionate than the rest of the citizens, without justice and respect. And so we urge you, if time permits, just to hear -- they're here. They are Joe's employees, they are my members. And the union, the members and their boss have never sat at the same table together in history. This is a historical moment, and we urge you to DiscoveryWorks Global 888.557.8650 www.dw-global.com 3/20/12 - PUBLIC HEALTH - RES. 120090 hear from them, because they are jewels. No one else would do this work. And if we are not able to get out from under this crisis, this will have a tremendous impact on every community across the City. Thank you so very much.

Thank you. We're going to hear from them next, but we want to finish with this panel and then we'll call up the members to testify. Next, Mr. Sachs.

Thank you, Madam Chairperson and distinguished Councilmembers. I'm Paul Sachs. I'm Executive Director of NHS Human Services of Philadelphia, but I'm here representing the Philadelphia Coalition, which is the 11 longstanding members of the Philadelphia community who operate behavioral health and intellectual disabilities services. In the interest of time and DiscoveryWorks Global 888.557.8650 www.dw-global.com 3/20/12 - PUBLIC HEALTH - RES. 120090 also in the interest of avoiding repetition, I'm going to go through some of the comments I have, and you have my written testimony.

All the testimony will be entered into the record in its entirety. So it will be part of the record.