To: The Honorable Caroline Menjivar Chair, Senate Budget Subcommittee No. 3
Honorable Members Senate Budget Subcommittee No. 3
The Honorable Dr. Corey Jackson Chair, Assembly Budget Subcommittee No. 2
Honorable Members Assembly Budget Subcommittee No. 2

Dear Chair Menjivar, Chair Jackson, and Members:

On behalf of the undersigned organizations, we write to express our strong opposition to proposed reductions to the In-Home Supportive Services (IHSS) program in the Governor’s 2026–27 Budget that would have grave consequences for consumers. We urge the Legislature to reject these proposals as they would negatively impact our most vulnerable older adults and persons with disabilities, and we also urge the Legislature to adopt statutory changes that preserve the current 50/50 cost sharing arrangement between the State and counties for the Community First Choice Option (CFCO) penalties.

The Administration has cited significant growth in overall costs of the IHSS program; however this should not only be expected, but celebrated. Between 2010 and 2022, the population of Californians 65 and older increased by 44% (usafacts.org). IHSS enables nearly 900,000 older adults and people with disabilities to remain safely in their homes and communities, avoiding costly institutional care incurred in the Medi-Cal Program, through assistance with daily living tasks such as meal preparation, assistance at medical appointments, assistance with the administration of life-saving medication, and other life-saving personal care services.

IHSS is a critical component of California's Master Plan for Aging, the State’s blueprint to address the needs of this growing population. By 2040, that population will increase by 59 percent (Public Policy Institute of California). At the same time demand is accelerating, counties that administer the IHSS program are being asked to absorb additional costs without the staffing or resources necessary to meet state mandates for timely and complete intakes and reassessments, which means older adults and persons with disabilities could experience longer waiting times for their assessments, potentially resulting in rushed assessments, that ultimately can jeopardize the safety of those who need, and are entitled to, IHSS services.

Shifting Growth Costs to Counties Will Directly Harm Recipients. The Governor’s Budget proposes eliminating the state’s share of cost associated with growth in IHSS hours provided to recipients (a $233.6 million General Fund shift to counties), beginning in FY 2027-28. By pushing $233.6 million in new costs onto counties (an amount that is expected to grow each year based on the growing aging population), the state creates incentives for counties to reduce or deny hours clients genuinely need or find other ways to reduce local costs. Those savings could come at the expense of the state-mandated collective bargaining between counties and provider unions for fair wages and benefits for IHSS providers, the latter of which would reduce available providers and therefore access to quality of care for IHSS recipients. Either outcome is catastrophic for IHSS recipients.

Although framed as fiscal shifts or adjustments, the e􀆯ect is clear: counties will be forced to reduce access to IHSS or other critical county health and human services as these costs are above what counties can afford within Realignment. This cost shift would also occur at a time when counties are facing billions of dollars in increased health and human services costs as a result of the implementation of H.R. 1. When counties are pushed to reduce hours or not increase provider wages and benefits, clients pay the price. For an older adult with a disability, losing even a few hours of care can mean missed meals, avoidable injuries, or the inability to remain safely at home. A reduction in hours is not just an inconvenience; it is a safety risk that can lead to hospitalization or institutional care.

Eliminating the IHSS Backup Provider System (BUPS) Puts Recipients in Emergency Situations At Risk. The Governor’s Budget proposes to eliminate BUPS (a $3.5 million General Fund reduction). BUPS prevents gaps in care when a regular IHSS provider is unavailable by matching IHSS recipients with short-term providers. According to the California Association of Public Authorities (CAPA), in FY 2024-25 over 4,100 requests were submitted to BUPS, and almost 2,500 were fulfilled. Note that CAPA could not gather data from all 58 counties, and as of this date CDSS has not provided requested data for all 58 counties, but we believe it is likely that the number of requests received and fulfilled is higher. Eliminating BUPS would leave recipients with no safety net, creating service gaps for consumers who rely on backup providers in emergency situations. Consumers with the most complex needs, especially those relying on backup providers, will face increased health risks and potential institutionalization. We also note that the BUPS was already reduced in the FY 2024-25 Budget by $3 million General Fund to true up to utilization of the program.

We urge the Legislature to reject the Governor’s proposals to remove the state’s share of cost for growth in IHSS hours and its associated trailer bill language (TBL) and to eliminate the BUPS program.

Shifting Full CFCO Penalties to Counties Will Worsen Delays for Recipients. CFCO serves individuals with the highest needs, those who would otherwise require nursing facility-level care, making it a vital component of California’s long-term services and supports system. The current policy of the 50 percent state / 50 percent county split in covering the costs of federally-imposed CFCO penalties has already had a negative impact on clients and their providers: potential IHSS clients are waiting longer to be authorized for their IHSS services by counties, and non-CFCO IHSS recipients are waiting longer to have their service needs reassessed and updated based on their needs (often needing increases as they age). Their providers—72.7 percent of whom are related family members (as of January 2026)—may be put in the difficult position of either providing uncompensated care or seeing their IHSS recipient struggle with unmet need.

Delays in assessments and reassessments can result in unmet care needs, increased risk of injury, and greater likelihood of institutionalization. The latest data from CDSS shows late applications have nearly tripled from July to December 2025, adding 3,000 more cases to an already strained system. This means there are 3,000 additional people waiting longer for IHSS services. These outcomes undermine the fundamental purpose of IHSS and CFCO. The below stories from real IHSS recipients and applicants show the potentially detrimental impact the penalties are having on vulnerable Californians:

“Dan”, an 80-year-old who lives alone, currently receives domestic and related services with minimal personal care, funded through PCSP (i.e., not CFCO), and uses a registry provider. As Dan’s condition begins to decline, he requests a change-in-condition assessment to increase his hours. However, because CFCO cases are being prioritized to avoid fiscal penalties, his assessment is significantly delayed. During the waiting period, Dan’s safety deteriorates and he goes without the additional help he urgently needs.

An adult son submitted an IHSS application on behalf of their father in October. Due to the prioritization of CFCO cases, the county advised an assessment would not occur for 2–3 more months. The applicant has 11 di􀆯erent medical diagnoses, and his family has been advised by his physician to not leave him alone. The delay places him at risk of injury and may jeopardize his ability to safely remain at home.

These experiences are not isolated incidents, but reflect a statewide pattern as CFCO penalties increasingly drive workload decisions. These harms may grow if the state shifts the full penalty burden to counties.

The state’s policy has accomplished its intended goal: counties have largely caught up on late CFCO reassessments, and federal penalties have significantly declined. According to CWDA, the federal penalty amounts incurred this Fiscal Year have totaled $15.4 million total ($7.7 million assessed to counties). The projected penalties are on track to be well below the projected $40.5 million total penalties projected for FY 2025-26 and $92.1 million projected for FY 2026-27. However, county IHSS administration is chronically and deeply underfunded—by $246 million based on estimates by the California Department of Social Services.1 This has resulted in high social worker caseloads in many counties, and county social workers must keep shifting their priorities of focus between intakes and reassessments.

Shifting 100% of penalty costs to counties would undermine counties’ efforts to catch up with delayed intakes and non-CFCO reassessments. It is critical that we do no further harm to older adults and persons with disabilities who are seeking or are currently receiving IHSS services.

To address this issue, we urge the Legislature to adopt TBL that would maintain the current 50/50 cost-sharing arrangement between the State and counties for CFCO penalties. Specifically, the proposed TBL would do the following:

• Maintain the current 50/50 state-county cost-sharing arrangement for CFCO penalties
• Make county penalty payments contingent on CDSS providing specific information to counties to allow for county-level financial reconciliation and documentation
• Exempt cases that move counties or return from leave from penalty calculations for 30 days after notifying the county of the change
• Clarify that the penalty is specific to overdue CFCO reassessments

See Attachment A for the full text of the proposed TBL.

IHSS is not simply a budget line; it is the lifeline that keeps nearly 900,000 Californians safe, housed, and cared for in their own homes and communities. The proposed budget reductions and cost shifts threaten the stability of the entire program and will inevitably, and profoundly, harm the consumers who rely on it.

We urge the Legislature to protect IHSS, preserve the current cost sharing structure, and reject proposals that undermine access to essential in-home care before harm is done to California’s seniors, persons with disabilities, and their providers.

Thank you for your consideration and for your continued commitment to preserving and strengthening California’s long-term services and supports system.

Sincerely,

Carlos Marquez 111
Executive Director
County Welfare Directors Association

Justin Garrett
Senior Legislative Advocate
California State Association of Counties

Tiffany Whiten
Senior Governmental Relations Advocate
California State Council of SEIU

Kim Levy Rothschild
Executive Director
California Association of Public Authorities for IHSS (CAPA)

Kristina Bas Hamilton
Senior Director of External Affairs
UDW/AFSCME Local 3930

Anna Leach-Proffer
Managing Attorney, Healthcare/HCBS
Disability Rights California

Elizabeth Zirker
Senior Attorney
National Health Law Program

Hagar Dickman
Director, California Long-Term Services and Supports Advocacy
Justice in Aging

Attachment A: Proposed CFCO TBL

Amend the Welfare and Institutions (W& I) Code Section 12306.16 (d)(7) to read:

1. Beginning July 1, 2026, if the state ceases to receive enhanced federal financial participation for the provision of services pursuant to Section 1915(k) of the federal Social Security Act (42 U.S.C. Sec. 1396n(k)) due to noncompliance of timely case reassessment for the Community First Choice Option program, the state and county shall each pay 50 percent of the amount of lost enhanced federal financial participation that would have been received pursuant to Section 1915(k) of the federal Social Security Act (42 U.S.C. Sec. 1396n(k)) for the months in which the state did not receive the enhanced federal financial participation. Counties shall only be held responsible for their share of the enhanced federal financial participation due to case-specific penalty assessments associated with noncompliance of timely reassessment for their individual county. The department shall develop guidance, in consultation with the County Welfare Directors Association of California, to implement this paragraph.
2. Any case that has changed addresses to an address that is outside of their prior county, and any cases that have returned from leave status, shall be exempted from a penalty assessment for 30 days from the date of notification to the county and shall not be included in the penalty determination. The department shall develop guidance, in consultation with the County Welfare Directors Association of California, to implement this paragraph.
3. County payment for its share of the lost enhanced federal financial participation due to federal fiscal penalties, pursuant to paragraph (A), shall be contingent upon the department providing the county with timely and sufficient data necessary to reconcile overdue reassessments. Data shall include, recipient case number and status for each affected reassessment, social worker assigned to that case, hours paid per case used to calculate the penalty, the methodology used to calculate the penalty, the date and time the data used to calculate the penalty was pulled, the penalty amount attributed to each case, and the total penalty cost for each case attributed to the county. The department shall provide quarterly data to the County Welfare Directors Association that includes the total amount of fiscal penalties paid to the federal Centers for Medicare and Medicaid and total amounts charged to counties for federal penalties for reconciliation.

• 1. California Department of Social Services (CDSS). “In-Home Suppor􀆟ve Services (IHSS) Administra􀆟ve Reassessment Methodology.” May Revision 2025. Document provided to stakeholders; not publicly posted. This document was provided by CDSS to program stakeholders as part of the 2025 May Revision budget process and was not posted publicly on the CDSS website.