Last week, members of the Victim Compensation and Government Claims Board made some very difficult decisions regarding the services CalVCP provides. These decisions, while not easy, were necessary in the face of a diminishing Restitution Fund. For the past few years the amount of revenue received from restitution fines, orders and penalties has declined. For FY 2010-11 the Governor’s budget estimates our revenues will be down by 3%, while claim payments are projected to increase by 2.1%. At this pace without budget reductions, the Restitution Fund will be $4.2 million in the red by June 2012 and have a $36.2 million negative balance by June 2013.
In an effort to assure that the Board can continue to compensate victims of crime, the Governor’s Budget for FY 2011-12 calls for more than $5.8 million in savings which includes a $2.2 million savings in operating expenses and a reduction in Joint Power (JP) and Criminal Restitution Compact (CRC) local assistance program contracts of $700,000. It also places a cap on the growth rate of benefit payments to victims of 2.5 percent for claims from FY 2010-11 to FY 2011-12. However, even with these proposed savings in the Governor’s budget, the Restitution Fund would still have a deficit of $20.3 million in 2013.
That is why the Board took decisive actions and voted on measures that will provide a savings of $15.7 million and better align the program benefit payments with its revenues. Specifically, the Board voted to:
- Limit chiropractic, physical and occupational therapy to a combined total of five sessions and require a physician’s recommendation for additional sessions up to a maximum of 20 sessions.
- Limit income and support loss benefits to victims who are actually employed at the time of the crime and require income and tax records to verify income.
- Establish a maximum benefit of $30,000 for vehicle purchase, renovation and retrofitting per qualifying crime.
- Determine appropriateness of attorney fee limit of payment in statute and prepare a regulation that requires verification of the reasonable value of legal services provided to an applicant.
- Establish a maximum benefit for funeral and burial expenses of $5,000 and remove food and beverages as reimbursable expenses.
- Establish a maximum benefit amount of $63,000.
- Reduce the CalVCP medical reimbursement rate to the flat Medicare rate and reduce restorative cosmetic surgery, prosthetics, hearing aids and eyeglasses, and foreign provider rates by 20%.
- Reduce the CalVCP mental health reimbursement rate by 10%.
- Continue the reduction of the reimbursement rate for mental health services provided by interns adopted by the Board on December 16, 2010 and implemented by staff in January 2011.
These actions adopted by the Board along with the other cost savings measures that the Board has already implemented such as reducing our administrative costs, holding positions vacant, limiting outreach and training and travel expenditures, will allow CalVCP to realize a balance of approximately $14 million by 2013. We will continue to work with our stakeholders on finding more long-term solutions to ensure solvency of the Restitution Fund for years to come so that we may continue to provide vital services to victims of violent crime in California.