County Hopes Human Services Block Grant Can Help Ease Pain Of State Funding Cuts
The following article was featured in the February 2014 issue of the Office's newsletter Developments. To download a PDF of the entire issue, click 

As the 2012 summer neared an end, it was clear that 2012 would be a difficult year for the providers of human services across Pennsylvania. Gov. Tom Corbett had signed a new budget that, as part of a number of austerity measures, cut the state human service dollars allocated to counties by 10%, leaving to speculation how such cuts would affect the services they provide and the well being of the vulnerable adults and children who rely on them.

None of the 67 counties were spared the cuts, which reduced the money they receive for mental health, child welfare special grants, intellectual disability, homeless assistance, behavioral health services, drug and alcohol services and the Human Services Development Fund. But Allegheny County and 19 others were selected for a block grant pilot program that merged funds for those line items and offered a degree of flexibility in deciding how to spend it.

In Allegheny County, the cuts meant a loss of about $12 million in those funding categories for fiscal 2012-2013 from the previous year and foretold of difficult decisions for the county Department of Human Services (DHS).

The offer of more flexible funding motivated DHS to participate in the block grant rather than continuing to work under rigid funding categories that tend to inhibit the innovation and service integration that might give it a better chance of doing more with less, said Director Mark Cherna.

“The demand always outweighs the supply of what we do and the majority of people we serve have multiple needs,” Cherna told a large audience at a public meeting scheduled by DHS to explain the decision last October.

“We figure the way to minimize the damage with less money and more demand is to be more creative and have more flexibility in how we serve those people.”

Efforts in the county to use the block grant in ways that lessen the pain of the 10 percent state funding cuts and improve the human services system remain a work in progress as DHS enters its second fiscal year under the pilot program.

The new fiscal year marks the first time DHS has used the flexibility of the block grant to move funds among programs and finance new initiatives. DHS estimates that such flexibility accounts for about 2 percent of the state dollars received under the block grant in fiscal 2013- 2014.

Among the ways DHS is using that flexibility in the current fiscal year is to fund several new initiatives, including ideas for improving the quality of service for homeless families that had been proposed by the University of Pittsburgh Office of Child Development (OCD).

Deep Cuts

In the spring of 2012, Gov. Corbett presented a proposed budget that sought to trim the state deficit with steep spending cuts, including a 20 percent cut in funds allocated to counties through the Department of Public Welfare for seven categories of human services. 

The response to those cuts included an advocacy campaign in Allegheny County that became know as the Campaign for What Works, a joint effort initiated by the United Way of Allegheny County, Greater Pittsburgh Nonprofit Partnership and the Pittsburgh Foundation to ensure the future of critical human service programs and the wellbeing of the people they serve. That effort was joined by organizations across the state to advocate for the rollback of the human service cuts contained in the

governor’s budget.

When the state General Assembly passed a state budget for fiscal 2012-2013, the cut in human services funding had been pared from 20 percent to 10 percent.

In Allegheny County, the cuts represented less than 2 percent of the more than $800 million budget managed by DHS, which serves some 200,000 people each year. But to providers in the county and across the state, the new cuts were the continuation of a trend that has seen overall public spending for human services steadily reduced in recent years, despite a heightened demand for those services following the 2008 recession.

The cuts were made across seven state-funded human services line items, all of which were merged in the block grants given to counties selected for the pilot program.

• Mental Health Base funding, which is allocated to a range of populations with a large share earmarked for people who have previously been served in state mental health facilities or who are being diverted from that level of care.

• The Intellectual Disabilities Community Base Program, which is mostly used to meet the needs of those with intellectual disabilities who may or may not be eligible for waiver programs. The dollars are largely used to pay for individual services such as residential, in-home supports, day programming, employment, rehabilitation, and transportation.

• The Behavioral Health Services Initiative, which funds most mental health and drug and alcohol services for people who are poor, but not eligible for Medical Assistance.

• Act 152 Drug & Alcohol funding, which gives people access to residential treatment who are enrolled in Medical Assistance but do not yet have behavioral health coverage.

• The Homeless Assistance Program, which supports emergency shelters, bridge housing, rental assistance and case management programs for homeless families and individuals.

• The Human Services Development Fund, which helps counties provide services to low-income residents who need assistance but don’t qualify for categorically funded services. It is a key funding source for disabled 18-to-59 year olds in need of in-home care. The incomes of most who receive services fall below 125 percent of the federal poverty level. 

• Child Welfare Special Grants, which offers counties lower match requirements as an incentive to conduct best practice programming, such as High Fidelity Wraparound and innovative delinquency and truancy programs.

Block Grant

DHS was several months into the 2012-2013 fiscal year when its application to participate in the block grant

pilot program was approved by the state. Agencies were already under contract and those contracts were based on the 10% across-the-board state funding cuts. As a result, DHS did not use the flexibility afforded by the block grant that fiscal year.

For Allegheny County, the state cuts required trimming $12 million in human services costs that fiscal year. Not all providers felt the cuts, but many did. For example, 70 mental health agencies had their funding reduced and funding for eight others was eliminated altogether. Eight providers of intellectual disabilities services had their funding eliminated and 25 others had it reduced. Nine drug and alcohol providers endured lower funding levels. DHS itself pared $1 million from its operating budget through staff reductions and other cost-saving measures.

In the meantime, the decision to accept funding through a block grant raised some concern among providers and others. One lingering concern has been the implication it has for advocacy. Advocates for underserved populations have spent years building organizations and strategies to influence decisions related to specific funding streams. Funds combined into a block grant can make advocacy for a specific funding stream, program or population more challenging.

Another concern is that the block grant can be seen as shifting the responsibility for the impact of the 10 percent funding cuts on agencies and clients from state government to the counties, which decide how to spend the smaller amount on local services. Still another concern is that the block grant can steer the conversation away from the cuts themselves and their implications for specific vulnerable populations.

“I am of two minds on this,” said Ray Firth, director of the OCD Division of Policy Initiatives and the county block grant advisory committee DHS assembled last year. “When you examine closely a public human services system, you see how much overlap there is. So, the notion of an integrated human services block grant from a management and client perspective makes a lot of sense. But there is very little public discussion today about the cuts from last year and restoring them. There is a lot of discussion about the block grant. The mechanics of the block grant take all of the oxygen out of the room and the needy gasp for air.”

Moreover, the state Department of Public Welfare has not announced whether the state will evaluate the impact of the funding cuts on services and those who rely on them, or whether there will be a formal study of how the block grant is being implemented across the state.

The ability to use the flexibility offered in the block grant to find ways to stretch the lower overall dollar amounts is not without challenges. Funds are still allocated categorically and the block grant pilot program was not coupled with regulatory and reporting reform, leaving in place some restrictions that complicate integrating services across funding categories.

At least in Allegheny County, the block grant led to greater transparency in how human services funding decisions are made. DHS held a series of public “town hall” information meetings to explain the state funding cuts, its decision to pursue the block grant, the decision-making process and other issues. An advisory board was established that offered advocates, users of human services, foundations and others a chance to inform and review the county’s block grant plan.

DHS also conducted a series of case reviews to examine the experience of consumers involved in multiple services to get a better idea of how systems interact and to help identify ways to improve service delivery and outcomes.

New Concepts

In some cases, unspent dollars in 2012-2013 fiscal year were identified and used to increase support for certain services in fiscal 2013-2014, including an increase in funding to help reduce the waiting list for drug and alcohol treatment.

Also in 2013-2014, DHS used about 2 percent of the flexibility allowed under the block grant, which totals about $2.4 million. Those dollars were allocated to support concepts in areas the county block grant plan suggests DHS will continue developing in future years, including homeless services, transition-age youth services and justice-related services. For example, block grant funds were used to continue to support and, in some cases, expand some re- entry services for inmates and services for their families that have been offered through the Jail Collaborative, which has shown promise in reducing recidivism.

Several new approaches were adopted as part of the recent spending plan that emerged from a public call for concept papers on ways to improve services and outcomes that was part of the block grant decision making process.

“That shocked a lot of people,” Firth said of the call for concepts. “Some folks may say, ‘Just tell me what you want me to do.’ Others see it as an opportunity. It wasn’t big money. But opening up that process was good for public perception of DHS, which is important, and it opened them up to ideas they might not have thought of otherwise.”

OCD was among those who had concepts included in the block grant plan. OCD submitted several proposals related to improving the process and quality of care for families in the county’s homeless system. To address needs identified by OCD, the county reports that in 2013-2014 it will begin offering case management to families with children in emergency shelters in order to better connect them to services. DHS also plans on examining its homeless system from top to bottom, including intake, process of care, system integration and transition.