March 13, 2025

IMPORTANT NOTE REGARDING OUR EARLIER COMMUNICATION TO MEMBERS DESCRIBING ASPECTS OF THE TARGETED INFLATIONARY INCREASE (acronym is ‘TII’) PROPOSAL IN THE  SENATE ONE-HOUSE BILL:

We shared an email with all members earlier today (1:56 pm) that came directly from Senate staffers who were trying to clarify for a group of BH advocates that work together on this issue, what the Senate bill is proposing with regards to the Targeted Inflationary Increase (TII).  Here it is again for your convenience:

Note on recently released Assembly and Senate one-house budget bills and specifically regarding the (proposed) Targeted Inflationary Increase (TII) (some are still calling it a COLA) for Human Services.  Information came from Senate staffers:

• Governor proposed 2.1% TII in her executive budget proposal with no bifurcation as to how eligible agencies can use the funds 
• The Senate proposed a 7.8% increase in funding, and earmarks over half of the increase to be used for wage enhancements.  Specifically, the Senate would expand the reach of the COLA to include the following state agencies:  OCFA, OMH, OASAS, OPWDD, OTDA, and NYSOFA, and 3.8% may be used for any inflation related costs deemed necessary by the provider (similar to the Governor’s proposal, but more funding), while 4% is specifically set aside to increase direct care workers’ wages. Note:  According to the Senate this does not mean workers will receive a 4% salary increase, but that over half of the proposed increase in funding must be used specifically for wage enhancements.
• The Assembly one-house bill also proposes a 7.8% increase in funding with no strings that we can see.

However, the Senate one-house budget resolution bill released Tuesday says something different.  (See yellow highlight below).  As such it appears Senate staff may have misinterpreted or miscommunicated to BH advocates what the Senate intends.   It seems pretty clear that the Senate language would require at least 4% of a 7.8% TII to go to increase eligible staff salaries.  Stand by for more on this.  We apologize for the confusion.  Trust the language (below) from the Senate bill:

PART FF

Section 1. 1. Subject to available appropriations and approval of the director of the budget, the commissioners and directors of the office of mental health, office for people with developmental disabilities, office of addiction services and supports, office of temporary and disability assistance, office of children and family services, office of victim services, department of health, and the state office for the aging (hereinafter “the commissioners”) shall establish a state fiscal year 2025-2026 targeted inflationary increase (TII), effective April 1, 2025, for projecting for the effects of inflation upon rates of payments, contracts, or any other form of reimbursement for the programs and services listed in subdivision five of this section. The TII established herein shall be applied to the appropriate portion of reimbursable costs or contract amounts. Where appropriate, transfers to the department of health (DOH) shall be made as reimbursement for the state share of medical assistance.

    2. Notwithstanding any inconsistent provision of law, subject to the approval of the director of the budget and available appropriations therefore, for the period of April 1, 2025, through March 31, 2026, the commissioners and directors shall provide funding to support a seven and eight-tenths percent (7.8%) targeted inflationary increase under this section for all eligible programs and services as determined pursuant to subdivision five of this section.

    3. Notwithstanding any inconsistent provision of law, and as approved by the director of the budget, the 7.8 percent targeted inflationary increase (TII) established herein shall be inclusive of all other cost of living type increases, inflation factors, or trend factors that are newly applied effective April 1, 2025. Except for the 7.8 percent targeted inflationary increase (TII) established herein, for the period commencing on April 1, 2025, and ending March 31, 2026 the commissioners and directors shall not apply any other new cost of living adjustments for the purpose of establishing rates of payments, contracts or any other form of reimbursement. The phrase “all other cost of living type increases, inflation factors, or trend factors” as defined in this subdivision shall not include payments made pursuant to the American Rescue Plan Act or other federal relief programs related to the Coronavirus Disease 2019 (COVID-19) pandemic public health emergency. This subdivision shall not prevent the office of children and family services from applying additional trend factors or staff retention factors to eligible programs and services under paragraph (v) of subdivision five of this section.

    4. Each local government unit or direct contract provider receiving the targeted inflationary increase established herein shall use such funding to provide a targeted salary increase of at least four percent (4.0%) to eligible individuals in accordance with subdivision six of this section. Notwithstanding any inconsistent provision of law, the commissioners and directors shall develop guidelines for local government units and direct contract providers on implementation of such targeted salary increase.

    5. Eligible programs and services. (i) Programs and services funded, licensed, or certified by the office of mental health (OMH) eligible for the targeted inflationary increase established herein, pending federal approval where applicable, include: office of mental health licensed outpatient programs, pursuant to parts 587 and 599 of title 14 CRR-NY of the office of mental health regulations including clinic, continuing day treatment, day treatment, intensive outpatient programs and partial hospitalization; outreach; crisis residence; crisis stabilization, crisis/respite beds; mobile crisis, part 590 comprehensive psychiatric emergency program services; crisis intervention; home based crisis intervention; family care; supported single room occupancy; supported housing; supported housing community services; treatment congregate; supported congregate; community residence – children and youth; treatment/apartment; supported apartment; community residence single room occupancy; on-site rehabilitation; employment programs; recreation; respite care; transportation; psychosocial club; assertive community treatment; case management; care coordination, including health home plus services; local government unit administration; monitoring and evaluation; children and youth vocational services; single point of access; school-based mental health program; family support children and youth; advocacy/support services; drop in centers; recovery centers; transition management services; bridger; home and community based waiver services; behavioral health waiver services authorized pursuant to the section 1115 MRT waiver; self-help programs; consumer service dollars; conference of local mental hygiene directors; multicultural initiative; ongoing integrated supported employment services; supported education; mentally ill/chemical abuse (MICA) network; personalized recovery oriented services; children and family treatment and support services; residential treatment facilities operating pursuant to part 584 of title 14-NYCRR; geriatric demonstration programs; community-based mental health family treatment and support; coordinated children’s service initiative; homeless services; and promises zone.

    (ii) Programs and services funded, licensed, or certified by the office for people with developmental disabilities (OPWDD) eligible for the targeted inflationary increase established herein, pending federal approval where applicable, include: local/unified services; chapter 620 services; voluntary operated community residential services; article 16 clinics; day treatment services; family support services; 100% day training; epilepsy services; traumatic brain injury services; hepatitis B services; independent practitioner services for individuals with intellectual and/or developmental disabilities; crisis services for individuals with intellectual and/or developmental disabilities; family care residential habilitation; supervised residential habilitation; supportive residential habilitation; respite; day habilitation; prevocational services; supported employment; community habilitation; intermediate care facility day and residential services; specialty hospital; pathways to employment; intensive behavioral services; community transition services; family education and training; fiscal intermediary; support broker; and personal resource accounts. The office, in collaboration with the education department, shall also provide a comparable targeted inflationary increase to the independent living centers program.

    (iii) Programs and services funded, licensed, or certified by the office of addiction services and supports (OASAS) eligible for the targeted inflationary increase established herein, pending federal approval where applicable, include: medically supervised withdrawal services – residential; medically supervised withdrawal services – outpatient; medically managed detoxification; medically monitored withdrawal; inpatient rehabilitation services; outpatient opioid treatment; residential opioid treatment; KEEP units outpatient; residential opioid treatment to abstinence; problem gambling treatment; medically supervised outpatient; outpatient rehabilitation; specialized services substance abuse programs; home and community based waiver services pursuant to subdivision 9 of section 366 of the social services law; children and family treatment and support services; continuum of care rental assistance case management; NY/NY III post-treatment housing; NY/NY III housing for persons at risk for homelessness; permanent supported housing; youth clubhouse; recovery community centers; recovery community organizing initiative; residential rehabilitation services for youth (RRSY); intensive residential; community residential; supportive living; residential services; job placement initiative; case management; family support navigator; local government unit administration; peer engagement; vocational rehabilitation; support services; HIV early intervention services; dual diagnosis coordinator; problem gambling resource centers; problem gambling prevention; prevention resource centers; primary prevention services; other prevention services; community services; and addiction treatment centers.

    (iv) Programs and services funded, licensed, or certified by the office of temporary and disability assistance (OTDA) eligible for the targeted inflationary increase established herein, pending federal approval where applicable, include: nutrition outreach and education program (NOEP); New York state supportive housing program; solutions to end homelessness program; and state supplemental nutrition assistance program outreach program.

    (v) Programs and services funded, licensed, or certified by the office of children and family services (OCFS) eligible for the targeted inflationary increase established herein, pending federal approval where applicable, include: programs for which the office of children and family services establishes maximum state aid rates pursuant to section 398-a of the social services law and section 4003 of the education law; emergency foster homes; foster family boarding homes and therapeutic foster homes; supervised settings as defined by subdivision twenty-two of section 371 of the social services law; adoptive parents receiving adoption subsidy pursuant to section 453 of the social services law; congregate and scattered supportive housing programs and supportive services provided under the NY/NY III supportive housing agreement to young adults leaving or having recently left foster care; child care resource and referral agencies; healthy families New York; maternal, infant, and early childhood home visiting (MIECHV) initiative; New York state learning and enrichment after-school program supports (LEAPS); New York state commission for the blind; residential and non-residential domestic violence services and preventative services as defined by section 409 of the social services law.

    (vi) Programs and services funded, licensed, or certified by the state office for the aging (SOFA) eligible for the targeted inflationary increase established herein, pending federal approval where applicable, include: community services for the elderly; expanded in-home services for the elderly; wellness in nutrition program; New York connects program; long term ombudsman program; naturally occurring retirement communities (NORCs); neighborhood naturally occurring retirement communities (NNORCs); and social adult day services program.

    (vii) Programs and services funded, licensed, or certified by the department of health eligible for the targeted inflationary increase established herein, pending federal approval where applicable, include: health home care management agencies authorized under section 365-l of the social services law; rape crisis programs; and Medicaid transportation program.

    (viii) Programs and services funded, licensed, or certified by the office of victim services eligible for the targeted inflationary increase established herein, pending federal approval where applicable, include: crime victim service programs as defined by section 631-a of the executive law.

    6. Eligible individuals. Support staff, direct care staff, clinical staff, and non-executive administrative staff in programs and services listed in subdivision five of this section shall be eligible for the 4.0% targeted salary increase established pursuant to subdivision four of this section.

    (a) For the office of mental health, office for people with developmental disabilities, and office of addiction services and supports, support staff shall mean individuals employed in consolidated fiscal report position title codes ranging from 100 to 199; direct care staff shall mean individuals employed in consolidated fiscal report position title codes ranging from 200 to 299; clinical staff shall mean individuals employed in consolidated fiscal report position title codes ranging from 300 to 399; and non-executive administrative staff shall mean individuals employed in consolidated fiscal report position title codes 400, 500 to 599, 605 to 699, and 703 to 799. Individuals employed in consolidated fiscal report position title codes 601 to 604, 701 and 702 shall be ineligible for the 4.0% targeted salary increase established herein.

    (b) For the office of temporary and disability assistance, office of children and family services, and the state office for the aging, eligible support staff, direct care staff, clinical staff, and non-executive administrative staff titles shall be determined by each agency’s commissioner.

    7. Each local government unit or direct contract provider receiving funding for the targeted inflationary increase established herein shall submit a written certification, in such form and at such time as each commissioner shall prescribe, attesting how such funding will be or was used to first promote the recruitment and retention of support staff, direct care staff, clinical staff, non-executive administrative staff, or respond to other critical non-personal service costs prior to supporting any salary increases or other compensation for executive level job titles.

    8. Notwithstanding any inconsistent provision of law to the contrary, agency commissioners and directors shall be authorized to recoup funding from a local governmental unit or direct contract provider for the targeted inflationary increase established herein determined to have been used in a manner inconsistent with the appropriation, or any other provision of this section. Such agency commissioners and directors shall be authorized to employ any legal mechanism to recoup such funds, including an offset of other funds that are owed to such local governmental unit or direct contract provider.

    § 2. This act shall take effect immediately and shall be deemed to have been in full force and effect on and after April 1, 2025.

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Today the Senate and Assembly passed their “one-house” Article VII and Appropriation Budget Resolutions.  This begins the 2 and 3-Way negotiations that will commence between the Senate, Assembly, and the Governor with a goal of reaching a final budget deal by the April 1 deadline. Attached for your review is a section by section analysis of the One House changes to the Governor’s proposed revenue bill. 
Both houses included amendments to the personal income tax, decreasing taxes on middle and lower income brackets and increasing and extending taxes on the higher income brackets.  In addition, both houses increased the corporate income tax , the Assembly raising it to 9.25% on corporate taxpayers earning more than $10 million and the Senate raising it on corporate taxpayers with earnings over $5 million to 9%. Additional details are included in the chart.Both houses also proposed a number of both exemptions and new or amended taxes including Small Business Hardship Savings Accounts, Sales Tax Exemptions for Energy Storage Systems, Ending Sales Tax Exemptions for Boats over $230,000, Ending Tax Breaks for Fossil Fuel Companies, Moving the taxation on Vapor Products to Wholesale Collection, Taxing Non-Residential Helicopter Rides. etc.  

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I just attended a briefing from the National Council that helped to clarify some questions I’ve been asked by numerous NYS Council members as the process (and the confusion) in Washington DC continues: 

Continuing Budget Resolution Process

There are no cuts proposed (in the House Continuing Budget Resolution) to entitlement programs including (but not limited to) Medicare, Medicaid, Social Security.  And there are no cuts to service programs operated by SAMHSA other than a reduction in the funding for SAMHSA survey activities conducted where it monitors and measures certain metrics related to MH and SUD prevalence, etc.  So, no cuts to CCBHC expansion grants, MH First Aid Program, SOR grants, etc.  Furthermore, the current House CR extends telehealth waivers through September 30.  The real issue is what will happen to this legislation. The House passed it a few days ago and then promptly left town, so now the pressure is on the Senate. 
The Senate may agree to the House Continuing Budget Resolution (as described above) to avoid a federal gov’t shutdown.  While all this is happening and despite the fact that there are no entitlement cuts in the Reso bill the House sent the Senate,  continued firing of federal employees will impact the administration of the SAMHSA Block Grant, SAPT, SOR, CCBHC expansion grant program and a series of additional federal discretionary programs.  But again, in this discussion (of the House Continuing Budget Reso) there are no Medicaid cuts being proposed.   Note:  Continuing Budget Resolutions continue current year budget funding levels rather than increasing / decreasing funding to address increased expenses from year to year, as can be the case with new fiscal year budgets.  This could be felt as a cut the longer we continue to live with the current year federal budget rather than passing a new budget that responds to increasing needs, etc. The Continuing Budget Resolution process is different from the Budget Reconciliation process to get a new budget by October 1.  The latter has HUGE risks associated with it since the House Budget Reconciliation process instructs the Energy and Commerce Committee to cut Medicaid by $880B over 10 years.

ADVOCACY REQUEST:  Members of Congress will be home in their districts next week (March 17-21) for a week-long recess. THEY NEED TO HEAR FROM YOU as Congress considers significant cuts and other harmful changes to Medicaid and the Supplemental Nutrition Assistance Program (SNAP) through the upcoming Budget Reconciliation Process.   We will continue to send you lots of resources you can use in these discussions but if you want to talk it over please don’t hesitate to call me anytime (and that includes non-traditional business hours) if/when you need me.  My cell is (518) 461-8200.