Sharon Henning and her husband, John, are considering taking out a second mortgage or an equity line of credit — not because they’re in debt, but because legislators are nearly three months overdue with a state budget.

The couple have owned and operated the Santa Maria Country Oaks Care Center, a skilled nursing home, for 17 years. The majority of their 57 patients are on Medi-Cal, California's Medicaid program.

Medi-Cal provides health care coverage for more than 6 million low-income children and families as well as elderly, blind and disabled people.

With no adopted state budget, the organizations that provide services to those people have not received payments from the state since July 1, when the new fiscal year began.

“I still have patients that I care for and staff that I pay, whether or not I get the money from the state,” said Sharon Henning, the executive administrator of Country Oaks.

Many nonprofit groups and businesses in the Santa Maria area were able to make ends meet for a short time after July 1.

Either the organizations had reserve funds or were receiving money from Santa Barbara County, CenCal Health (formerly known as the Santa Barbara Regional Health Authority) or similar agencies.

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If California had a 2008-09 budget, the local agencies would receive money from the state earmarked for services or programs and funnel it to the various nonprofits that have state or county contracts. However, after dipping into their reserves since July 1, their belts have begun to tighten.

Henning said she was told by CenCal that on Sept. 1 her payments would be reduced 70 percent. Paydays are the 10th and 25th, and Henning said a loan was the next option in order to keep her staff paid and provide care for her clients.

Two organizations have continued to receive payments from the county: The Pacific Pride Foundation, which provides services to the HIV/AIDS and lesbian, gay, bisexual and transgender communities of Santa Barbara County, and Good Samaritan, which provides programs that address homelessness and alcohol and substance abuse in the North County.

Good Samaritan Executive Director Sylvia Barnard said she had been notified recently by the county that “there may be a slight hold-up in funding,” but no details were given.

“Those who would be affected are the community’s most vulnerable people,” Barnard said. “We want to keep the doors open, but if there’s a hold-up in funding, these services could be jeopardized.”

David Selberg, executive director of the Pacific Pride Foundation, said each day brings them closer to draining their reserves and “we’ll need to access our bank line of credit to continue providing services.”

Many of the Pacific Pride clients are working mothers and fathers, while others are young students, homeless, disabled or mentally ill — or, as Selberg said, “the most fragile populations.”

Santa Barbara County recently received a letter from the state that stated, “if you spend money on the alcohol and drug programs, we won’t reimburse you until the budget gets passed,” said Mike Brown, CEO for the county.

“We don’t know much (about when the logjam might break) because the state hasn’t done much,” Brown said Friday. But the county has notified organizations that the county may not be able to step in for the state for much longer.

The county is trying for business as usual with state-funded programs, Brown said, while “encouraging and cajoling” legislators into passing a budget as soon as possible.

In preparation of a state budget with severe cutbacks, the county adopted a budget in June with painful cuts to the children’s health initiative and in-home senior services, while nonprofits also scaled back staff and services.

CEO Kirk Spry of VTC Enterprises, a Santa Maria organization that serves more than 350 people with developmental disabilities, said it has already budgeted for a 10 percent cut, but 30 percent of its budget comes from the state.

“We know we’re going to get beat up,” Spry said, “but we hope it’s only a few slaps in the face instead of a full-on mugging.”

“It seems like before (state legislators) take us seriously, someone has to get hurt,” Spry said. “It’s political garbage, using people as pawns to advance their political agendas.”

Sam Womack can be reached at 739-2218 or swomack@santamariatimes.com.

September 14, 2008