McKenna’s 6% proposal is not grounded in reality

Rob McKenna has said if elected Governor he would cap increases in non-education-program funding at no more than 6 percent per biennium — a number he said would cover inflation and population growth.[1]

However, this assertion is not grounded in reality.  A 6-percent cap on funding to long-term care, in-home care services would quickly lead to an underfunding of this essential public program as caseload growth and employment compensation costs alone will exceed the 6-percent cap.

A recently released report by Washington’s Caseload Forecasting Council (CFC) has calculated the current caseload growth for long-term care in-home services at 5.5% in FY2012 and 5.6% in FY2012.  Caseloads will likely grow more rapidly as we approach 2030.[2]  According to Washington’s Aging and Disability Services Administration (ADSA), gains in the number of individuals in the age 65-plus population are expected to increase from 25,000 persons per year to more than 40,000 per year starting this year (2012).  This trend is expected to hold through 2028.[3]    According to the Washington State Office of Financial Management (OFM) the number of individuals aged 65 and older will represent one-fifth of the state’s population (i.e. about 1.7 million) by 2030.

Additionally, according to the Bureau of Labor Statistics recently released Employment Cost Index compensation costs for civilian workers increased 2.0 percent for the 12-month period ending December 2011. This was the same rate of increase as the prior year period ending in December 2010.[4]

Thus, a conservative estimate of increased program costs, which assumes the caseload and employment cost index trends, will remain at their current level already puts the increased costs of home care services at 7.6% per year, exceeding McKenna’s 6% per biennium cap.