Group Home Operators in a Bind

Nancy Kelly emptied all her savings accounts two weeks ago to pay the people who work at the three homes she runs for 18 severely retarded people.

But payday for the 34 workers comes again Friday, so she set out to find a loan. On Tuesday, the answer came: Denied. So she scrambled to get her paperwork to a second bank. On Wednesday, she got approved.

“I’m so exhausted. I’m totally fried,” said Kelly, relieved that she will be able to pay employees at her group homes in the San Bernardino County town of Grand Terrace, but already worrying about the next payday.

Kelly and hundreds of group and nursing home owners like her depend on regular weekly or twice-a-week checks from the state. But state Controller Kathleen Connell cannot legally pay them until a state budget is signed into law.

With the budget six weeks late, Kelly and many others are struggling to scrape together enough money to remain in business.

At the Capitol, there has been little sense of urgency about the budget deadlock, now the second longest in California history. Lawmakers rack up pay and, because of rules governing per diem payments, can even count on a windfall once they get around to approving the final budget. Exactly when that will be is not known; perhaps this weekend, maybe next week.

The state already owes Kelly $90,000. The sum grows by $2,500 a day. Altogether in this year’s budget debacle, California has failed to pay $216 million to 2,150 long-term care facilities.

The homes shelter more than 100,000 Californians least able to care for themselves--the elderly, physically disabled, mentally ill and severely developmentally disabled. Kelly’s wards are typical. Most patients are in wheelchairs and cannot speak. Some are children. Others are elderly. Many cannot eat on their own, or clothe and clean themselves. They’re in need of constant care.

“This is not a widget shop,” said Dennis Mattson, who runs 24 homes that shelter 144 developmentally disabled people in San Diego, Orange, Los Angeles and Riverside counties. “We provide services to human beings. You don’t just close your doors.”

To meet his payroll, Mattson has juggled other bills. He has delayed sending rent checks and making payments on the vans he uses to shuttle his patients to their various workshops and outings. He has paid electric bills only after getting shut-off notices.

“I can assure you that there are many of us who are hanging by a thread,” Mattson said.

That thread is ready to snap for Naomi Brown. She runs three homes in Moreno Valley. After draining her savings, her final option is to cash out a life insurance policy to pay her workers. Even at that, she may be able to pay her employees only part of what they’ve earned. She is calling her workers’ landlords, pleading on their behalf for patience.

By law, Gov. Pete Wilson should have signed the budget by July 1, the start of the 1997-98 fiscal year. The state Constitution requires that a budget be in place before bills can be paid.

But there is no penalty when the governor and lawmakers fail to have a budget in place on time. And during the 1990s, when only one budget has been signed on time, many groups that rely on checks from the state have managed to carve out special deals.

Lawsuits by state workers require that the controller pay 200,000 of them on time, Connell says. Connell also says a federal court ruling requires that she pay welfare recipients.

A state law approved quietly after the record two-month budget impasse in 1992 permits the state to make payments on its bond debt, even if a budget is not in place. That allays Wall Street’s jitters.

Connell is withholding paychecks to legislators, the governor and their staff until a budget is in place. But even that problem is minor. Golden 1 Credit Union, the choice of many Capitol workers, extends interest-free loans to staffers and lawmakers equal to their net pay.

“We’re here to help when they need help,” said Stan Hollen, Golden 1’s chief executive officer, estimating that he is extending the courtesy to 800 staffers and 40 or 50 lawmakers.

For many lawmakers, a budget impasse will mean more money.

Not only do they remain on the payroll for annual compensation--$75,600 and more for legislators, $126,000 for the governor--most lawmakers go right on gaining chits for their daily living allowance of $110 a day, tax free. Their actual payments will come once the budget deadlock ends.

If a budget had been signed on time, legislators would have been on recess as of July 18 and would not be accruing the allowances. Only five Assembly members are turning down per diem during the impasse.

Members can be absent from Sacramento a day here, a week there, and still pile up per diem credits. Records show that between July 18 and Monday of this week, 31 Assembly members and 24 senators, not counting absences for illness, have missed at least one work day in Sacramento; some have missed several days.

The days away from Sacramento count as work as long as the member declares “legislative business” as the reason for the absence.

As long as a member logs in four workdays a week, his or her per diem payments continue at the rate of seven per week--or $770 tax free per lawmaker, per week.

The living expense allowances supposedly help cover the costs of travel and upkeep between Sacramento and members’ home districts. However, air fare to their home districts and car costs are free or nearly free to legislators.

There are no such sweet deals for people who operate or work at the nursing care homes that rely on state funding.

Owners of the businesses pay market-rate interest on their loans, if they can get them. Even when a state budget is in place and they get their back pay, the business owners won’t be able to bill the state for late charges on bills they have delayed, or interest on loans they’ve taken out.

Connell spokesman Byron Tucker says that until a budget is in place, the state Constitution precludes the controller from paying nursing care businesses or others who are covered by the state Medi-Cal program. Nor can the state pay pharmacists and doctors who provide Medi-Cal services, or private firms that supply food and other products to the state.

In yet another twist in this year’s budget impasse, the state, in a money-saving effort, closed Camarillo State Hospital and moved hundreds of patients from there and other state institutions into group homes.

So, this summer, group homes are caring for more disabled people. Mattson, for one, opened three new homes to capitalize on the influx. That used up his credit, and his banker is not extending him any more. As the situation turns more desperate, he and other operators have pleaded with legislators to approve the budget.

“There just seems to be finger-pointing. They’re terrific at it,” Mattson said.