$11 million in federal cuts hits Utah Human Services

Federal budget cuts to Medicaid and other programs have caused an unexpected $11 million shortfall in the Utah Department of Human Services' current budget — a figure that is projected to nearly double by 2007.

The reductions, according to Human Services deputy director Mark Ward, represent the "largest federal cut in the modern era" to the affected programs.

News of the shortfall comes as lawmakers are already grappling with the need to fund an additional $70 million to keep the state's Medicaid program functioning at current levels.

"It is huge, and it could be pretty devastating," said Rep. Merlynn Newbold, R-South Jordan, co-chair of the Health and Human Services Appropriations Subcommittee.

The committee will tackle the issue today at a public hearing on the department's budget. Until lawmakers understand the full scope of the problem, Newbold said, it's not clear what steps can be taken to mitigate the impact of the cuts.

The bulk of the federal cuts are the result of the Deficit Reduction Act of 2005, which alters funding to programs such as Medicaid and Temporary Assistance to Needy Families.

Although Congress has not yet passed the legislation, officials within the Department of Human Services are preparing for the worst.

"If these cuts aren't restored, we'll be working with the Legislature to replace the lost federal funds," Ward said.

According to information provided to lawmakers late last week, the predicted cuts impact several divisions in the department, most notably the Division of Child and Family Services.

This year alone, DCFS stands to lose nearly $5 million this year for its targeted case management program, which provides Medicaid health and mental health services and treatment for Utah children.

The amount jumps to nearly $10 million for fiscal 2007, 2008 and 2009.

If the state is not able to plug the hole left by the reduction of federal dollars, valuable services and programs would need to be cut dramatically. Department officials have said they'll try to make the reductions as minimal as possible.

However, Ward said, "At this magnitude, they're going to be disruptive."

Proposed changes will also reduce federal funding now used to provide services to disabled Utah children in foster care or children who are potential candidates for foster care.