DHS Senate Budget Hearing Summary and RCPA Divisional Highlights

Earlier this week, Pennsylvania’s Senate Appropriations Committee held a public hearing to review the Department of Human Services (DHS) Fiscal Year (FY) 2026/27 proposed budget, with the goal of learning more about the Department’s portion of the overall proposal. The hearings were led by Senate Appropriations Majority Chair Scott Martin, while DHS was represented by Secretary Arkoosh, Fiscal Director Gloria Gilligan, and program deputies.

Governor Shapiro proposed a $53.3 billion spending plan in early February, representing a $2.7 billion (5.4%) increase over the previous fiscal year. Within this proposal, the allocation from the General Fund for DHS is $21.9 billion, which increases to $67.2 billion with federal support and other funds. See the DHS Blue Book for a detailed explanation of the appropriations.

On the Republican side of the Appropriations Committee, questions focused on the long-term fiscal sustainability of the Governor’s proposal, with concern about how costs greatly exceed anticipated revenues. There was also concern on the proposed budget’s reliance upon the rainy-day fund, potentially leaving the state vulnerable to future economic downturns. Republicans also voiced worries regarding hospital closures, especially in rural areas.

Democrats focused the majority of their questions on the essential nature of human services and external threats posed by federal legislative changes. They highlighted the impending implications of HR1, arguing that it would severely undermine Pennsylvania’s social safety net with reductions upward of $20 billion over the next decade.

RCPA Divisional Highlights:

Children’s Services:

• When asked about the $100 million for school mental health and safety, Secretary Arkoosh explained that those funds are not allocated through DHS and instead flow through the Pennsylvania Commission on Crime and Delinquency (PCCD).
• Questions were also asked regarding the lack of community provider involvement in school-based mental health programs, noting that there is no need to create a secondary school mental health system, and urging for coordination between counties and schools. RCPA will be releasing a school-based mental health position statement outlining a blueprint for sustaining and growing the existing treatment service delivery relationship between schools and community-based mental health providers.

Early Intervention:

• In response to a question regarding the apparent cut of $5.2 million to Early Intervention Part C funding that is listed in the Blue Book, the Secretary shared that there is no cut in funding to EI Part C, but instead, the budget will utilize carryover funds from the prior year rather than requesting additional funds from the General Fund. She highlighted that the 7% increase in provider rates from 2025/26 will be annualized in next year’s budget.
• When asked why the Department did not request additional funds for EI Part C to shore up a skilled workforce and serve additional children rather than keep a flat budget, the Secretary did not directly respond. Instead, she again mentioned the 2025/26 provider rate increase.

Intellectual and Developmental Disabilities (IDD):

• Waiting list initiatives have resulted in a significant reduction in previous waiting list numbers. A reduction of approximately 30% has been achieved by ODP initiatives.
• In response to DHS cost-cutting measures, Secretary Arkoosh shared an update about the recently implemented Specialized Assessment and Treatment (STAT) program that supports a physical health telehealth assessment on demand for individuals in the waiver program. This assessment is intended to divert individuals from the emergency room when those services are not medically necessary. Since its implementation, there have been approximately 5,500 individuals who have used the services. Those individuals received 8,942 assessments, which have prevented nearly 7,000 unneeded emergency room visits, creating significant cost savings.
• For increases in State Center funding, Secretary Arkoosh confirmed that State Centers are operating at less than 50% of their bed capacity; however, she also confirmed that staffing expenses are commensurate to the actual census. The proposed budget increase of $1.9 million was attributed to increases in staffing expenses and physical plant upkeep costs. She also confirmed that there is no plan to close either of the two remaining State Centers.
• In response to a question regarding the allocation of funding for new waiver slots, the Secretary explained that of the proposed $76.8 million for the Community Waiver Program, there is an allocation of $30 million to fund new waiver slots. The remaining $46.8 million is allocated to fund annualization of rate adjustments, account for changes in FMAP, and fund ICF beds to be converted to community waiver programs.

Mental Health:

• When asked about the lack of County mental health base funding, Secretary Arkoosh explained the important activities that these base funds are utilized for, including psychiatric treatment, competency evaluations, targeted case management, community residential services, drop-in centers, and many more. She also explained that these county base funds help pay for people who are either uninsured or underinsured. She mentioned that the Governor has called for a total increase of $60 million of base funds, and that so far $40 million has appropriated, but was unable to account for the lack of base funds in the proposed 2026/27 budget.

Office of Long-Term Living (OLTL):

• In response to a question regarding the lack of rate increase for Brain Injury providers since 2010, the Secretary explained the complexity of the system but ensured that both she and Deputy Secretary Marsala have been working closely with providers to help them understand how they can bill for services.
• There was a discussion regarding the self-direction rates and hours worked and the intersection of whether refugee workers and undocumented immigrants are eligible to work.

Please reach out to your RCPA Policy Director with any questions. The House Appropriations Budget Hearing for DHS takes place on Wednesday, March 4 at 10:00 am. The hearing can be livestreamed here.