[NFBK] FW: Overview of the current proposed budget impacts

[Todd E. Stephens]

Good morning, Federationists and Friends:



Something to share from Kentucky Office of Vocational and Rehabilitation
Services Executive Director, Cora McNabb.



Respectfully,



Todd



From: McDaniel, Brooke N (ELC) <brooke.mcdaniel at ky.gov>
Sent: Thursday, June 12, 2025 9:18 AM
Subject: FW: Overview of the current proposed budget impacts
Importance: High



SCVR Council Members,



Please see the below information, sent on behalf of Cora McNabb.



  _____



Department of Education Proposed Budget impacts on VR





● CHIMP and Budget Proposal Create a De Facto Unfunded Mandate on States:

The CHIMP (Changes in Mandatory Programs) mechanism has never been applied
to the VR program, introducing new uncertainty. At the same time, the
President’s budget proposal zeroes out key discretionary funding streams
that support the VR system, including:



● Training funds critical to building and sustaining the VR workforce
pipeline

● Supported Employment (SE) grants

● Client Assistance Program (CAP) funds

● Technical Assistance (TA) centers



Eliminating these core supports shifts the burden to states without
providing the necessary federal resources-effectively creating an unfunded
mandate that jeopardizes service delivery, staff development, and client
outcomes.

● Returning to FY24 Funding = A Major Step Backward



Reverting to FY24 funding levels would severely compromise the ability of VR
programs to meet the needs of individuals with disabilities. The increase in
FY25 was not an overage or surplus-it was a critical catch-up investment
that allowed programs to begin stabilizing after flat funding and rising
costs.

However, due to the late timing of the COLA increase, most states were
unable to adjust their general fund requests in time to fully leverage the
federal increase. State legislative calendars had already closed budget
negotiations, meaning VR programs were left with federal funds they couldn’
t fully match-not because of lack of effort, but because of systemic timing
constraints.

The FY25 increase helped programs contend with:



● Rapidly rising operational costs - including leases, insurance, salaries,
and technology infrastructure





● A significant post-pandemic increase in service demand, as more
individuals seek employment and vocational support

● Clients with more complex and resource-intensive needs, driving up
per-case service costs



Failing to sustain this increased funding level-and reverting to FY24-would
erase hard-won progress, worsen service gaps, and leave programs unable to
meet current demand.



● Flawed Assumptions on “Unused Funds”: The argument that FY24 funding
levels are sufficient because of unclaimed funds from past years ignores the
COVID-era context. During the pandemic:

○ Staff shortages limited service capacity

○ Customers delayed services due to health risks

○ These two largest cost drivers-personnel and service expenditures-dropped
temporarily

Today, both are rebounding significantly, and funding needs have outpaced
pre-pandemic norms.



Extending Match Timeframes Doesn’t Solve the Problem:



Allowing longer timeframes to meet state match requirements only delays the
issue. Many states rely on the next fiscal year’s appropriations to meet
their federal match, so without sustained funding increases, the challenge
compounds over time.



Cora McNabb

Executive Director

Office of Vocational Rehabilitation

Mayo-Underwood Building

500 Mero Street

Frankfort, KY  40601

Phone (502) 782-3402

Fax (502) 564-6745

 <mailto:cora.mcnabb at ky.gov> cora.mcnabb at ky.gov

Coming Soon--New Case Management System for the Kentucky Office of
Vocational Rehabilitation

In the coming months, the Kentucky Office of Vocational Rehabilitation will
transition to a new case management system. This new, more modern system
will create greater efficiencies in services when full implementation is
completed. To prepare for this transition, OVR agency staff will be working
diligently to get case files in the current system ready for transfer to the
new system. Staff also will undergo intensive training required for the new
system. All these items will temporarily impact staff schedules and may
increase the wait time for appointments or require rescheduling of existing
appointments. OVR appreciates your patience during this hectic time of
transition to the new case management system and will do all it can to
minimize its impact on our services.



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