State Sen. Fran Pavley announced Monday the passage of legislation that will provide more funding for services to the developmentally disabled.

These services had been devastated by recession-era budget cuts and providers say such services are “on the brink of collapse.”

On bipartisan votes, both houses of the Legislature today sent to Governor. Jerry Brown legislation that will provide an ongoing increase of nearly $500 million for services provided by Regional Centers and by community services providers. Those services support children with development disabilities to remain in their family homes and allow adults with developmental disabilities to live as independently as possible in communities of their choice.

Governor Brown, whose administration helped negotiate the legislative agreement, is expected to sign the bill.

“This will go a long way toward providing needed services for an often overlooked portion of California’s population,” said Pavley, who co-authored the bill appropriating the additional funding. “With the help of adequate support and services, the developmentally disabled can live productive, independent lives and be contributing members of our communities.”

Pavley noted that while the additional funding will end the crisis in developmental services, it will also create the opportunity to implement reforms to improve the delivery of services.

The bill will provide nearly $339 million in much-needed funding to increase staffing at Regional Centers and to provide wage increases for those who provide direct care, often at the minimum wage. It will also increase spending for direct services such as transportation and housing, and allow for a restoration of previous wage rates for supported employment of Department of Developmental Services’ consumers.

A restoration of funding in this area has been a major budget priority for Senator Pavley.

Services for the developmentally disabled in California have become so decimated that the system’s very survival has been in doubt. Indeed, the Association of Regional Center Agencies issued a report this month it titled, “On the Brink of Collapse.”

The report detailed how California ranks last in the nation in the amount it spends on individuals with development disabilities with needs – less than half the national average. The association reported that the state “can no longer assure the federal government that sufficient resources and supports are available to meet the health and safety of Californians with developmental disabilities.”

The agreement will provide an additional $306.5 million in state funding and qualify the state for additional federal funding, estimated at $189.2 million.

The increase is essential because, as the association points out, “regional centers have no choice but to allow caseload ratios to climb above legally required levels.”

Regional Centers and community service providers were established under the Lanterman Act in the 1960s as a means to offer individuals with developmental disabilities and their families an alternative to large, state-run institutions.

The new funding is made possible because of agreement on a new structure for an arcane tax called the Managed Care Organization tax. The existing structure had been in place for years. It was supported by the managed care insurance industry because providers received back in additional federal support more than enough to make up for their tax payments, which in turn provided revenue that allowed the state to meet its matching share for the federal money.

The federal government, however, ruled California’s tax structure did not meet its requirements, and the state faced a $1 billion annual loss unless it could develop a new tax structure that met federal standards by July 1.

After much negotiation with the industry, an agreement was reached whereby a broader base of managed care providers will pay the tax, and will receive a commensurate reduction in other state taxes in exchange. The arrangement is revenue-neutral for the state and for managed care providers, so it will not create any financial pressure for insurance rate increases.

The Legislature’s action today came in a special session on health care called last year by Governor Brown, specifically to deal with this issue.