Self-Determination Program Changes Coming to California (2025-26)

The 2025-26 California state budget, finalized and signed by Governor Newsom on July 3, includes a budget cut to the Self-Determination Program of $22.5 million dollars — increasing to a $45 million cut in subsequent years — prompting concern from many families. With the current overall SDP budget at $480 million, the cut represents roughly a 10% reduction. We scrutinized the accompanying AB 143 trailer bill to understand where these savings might be coming from.

The Self-Determination Program (SDP) is an option for people with developmental disabilities to have more choice and control over the services and supports they receive through Regional Center services. Instead of the Regional Center choosing providers, participants get a budget and can hire their own staff and services based on their needs and goals. It’s designed to promote independence, inclusion, and flexibility. Participants create a person-centered plan, work with an Independent Facilitator, and use a Financial Management Service to manage the budget.

SDP is particularly impacted by these new requirements:

1. The individual participant’s initial budget will be based on their past year’s authorized services, rather than past spending. Prior to AB 143, individual initial budgets often mirrored historical "purchase of service" (POS) expenditures.

2. The requirement to consider “unmet need” is eliminated. Now, budgets must be structured around the services authorized in the Individual Program Plan (IPP). This is the place to address unmet needs and add an IPP goal or “desired outcome.” Participants with no or low authorized services, are still required to consider “unmet needs” in their IPP.

3. SDP participants must have their spending plans certified by Regional Centers for completeness, reasonableness, and alignment with IPP objectives before disbursements, adding an extra layer of oversight (and potential delay).

4. Regional Centers are to consider if spending plans are “cost effective,” which will be defined by a directive from the Department of Developmental Services (DDS) by August 2026.

5. AB 143 also instructs DDS to develop and implement standard procedures and criteria for SDP, incorporating community input, to ensure consistency across all Regional Centers by March 1, 2027.

6. Over the Regional Center systems as a whole, AB 143 mandates that providers meet electronic visit verification, HCBS rules, and fiscal audit standards starting fiscal year 2026–27 to qualify for quality incentive payment, which may slightly impact initial SDP participant budgets.

What’s behind the $22 million cut?

The $22 million figure is less than 5% of the current expenditure within the SDP program, growing to around 10% in subsequent years. We have not yet found any data attached to the figure to account for that being the expected savings. One possibility is that this figure draws on the historic progress of the SDP program and historic cost savings. During the pilot for SDP, the experience of the early participants was that after initial higher costs, the program generally led to 10% savings in costs each year — due to the inherent efficiency of the program itself — and that as participants became better at managing their spending plan, they were able to do the same or more with a 10% cut. If this is the unstated rationale, it is possible (but not transparent) that the budget assumes that the program can deliver a 10% cut without the participants having to lose vital services.

SDP started in 2013, but it is only since 2021 that the program was opened to all Regional Center participants who wanted to switch to this option. At the time that this program was developed, advocates argued that it would be cost-neutral or even cost-saving. However, in practice, SDP participants are now spending more per participant than those on traditional services because they have more authorized services, even if those services are more cost effectively purchased.

The trailer bill AB143 also comes with some changes to the program that many advocacy organizations have highlighted as being the potential mechanism for cost savings that could, potentially, negatively impact participants. These changes have raised specific concerns, including the following potential issues:

No requirement for Regional Centers to assess unmet need

In the SDP program so far, participants have been able to boost their initial budget because Regional Centers have been required to look at “unmet need.” While perhaps not intended as such, many participants have viewed this requirement as “compensatory” in nature, i.e. that the initial budget should make up for the lack of services the participant has had up until that point.

Now, with the passage of AB143, Regional Centers will:

• Calculate the initial budget based on the authorized services from the previous year. This is an unexpected benefit of this bill, since previously participants’ budgets were based on what they actually used or spent — purchase of service (POS) — which is often far less. (Note that there is an exemption for participants with no authorized services or very low services with the expectation that their budget will increase based on their IPP.)
• In your initial budget, they will also deduct one-time funds — such as those for equipment — and programs that are outside the scope of self-determination, including some Regional Center programs for adults such as the Paid Internship.

The services authorized should be attached to IPP goals or “desired outcomes,” so it does seem that participants whose needs have not been met in the traditional model will still be able to advocate for having a boost of services and supports written into their IPP. This process will be driven by their person-entered plan (PCP) that helps create long-term personal goals and relates the services in their spending plan to each goal.

If you have no or low authorized services, it is essential to start with a thorough person-centered plan. At minimum, consider respite and social-recreation services, which should be available to all Regional Center clients. The difference is that under “unmet need,” some people were perhaps considering past years’ lack of service, while the new law solely addresses the needs of the participant now in the present.

When it comes to renewing your annual budget, Regional Center is going to take into account the services authorized last year, but can increase or reduce the amount based on the participant’s circumstances, needs, or resources as documented in the IPP. The Regional Center certifies on the individual budget document that the expenditures, including any adjustment, would have occurred regardless of the individual’s participation in the Self-Determination Program.

Regional Centers will have more control of each participant’s spending plan

SDP participants must have their spending plans certified by Regional Centers for completeness, reasonableness, and alignment with IPP objectives. Spending plans can be rejected based on cost effectiveness as well as other Regional Center and Medi-Cal rules such as the Home and Community Based Services Final Rule. These changes to the wording of the Welfare and Institutions Code go into place with the passage of AB143, while we are waiting for direction from DDS that might take over a year. Concerns have been raised that this certification process could be time-consuming and, without guidance from DDS, could increase fair hearing appeals.

Cost-effective does NOT mean the cheapest. It means the cheapest way to purchase that service or equipment while still meeting the individual’s unique needs. For example, if a participant wants to pay a higher rate to an employee who has been working with the participant a long time, has great rapport, and has skills and experience that serve their needs, that can still be cost effective if those needs are documented in the IPP and in the spending plan. Provider shortages and difficulties finding vendors in your area can still be taken into account when assessing cost-effectiveness.

AB143 requires DDS to issue a written directive defining the term “cost effective” for the purposes of SDP and all Regional Center Programs by August 1, 2026. DDS has to consult with the their Lived Experience Advisory Group, individuals and families, caregivers, advocates and associations, service providers, Regional Centers, the State Council on Developmental Disabilities Statewide Self‑Determination Advisory Committee, and legislative staff to write this directive and then publish it so that the public can provide feedback before the deadline.

Some disability advocates have expressed skepticism, arguing that the only way this could become a cost-saving measure is if Regional Centers impose unrealistic restrictions that prevent participants from turning their IPP goals into services funded through their spending plans. They worry that Regional Center service coordinators could begin gatekeeping the flexibility that participants value in the Self-Determination Program, insisting on new rules that limit creative use of funds.

Additional concerns are that Regional Centers could use cost-effectiveness requirements to eliminate participants’ ability to pay higher rates for providers while using fewer hours. One strategy might be to ask them to wait for the directive before applying the standard of cost-effectiveness if they disagree about what cost-effective means. If you feel that the Regional Center is applying the standard of cost effective unreasonably, it may be worth filing a 4731 complaint.

Consistent SDP policy across all Regional Centers

The third important component of the bill is the requirement for DDS to create a plan to have consistent SDP policy across all Regional Centers. This process is not due to be completed until March 2027. Again, advocates warn it’s a possibility that DDS and Regional Centers could adopt the least generous policy from each Regional Center, so families need to speak out early and often as to what their children rely on.

Since each Regional Center offers different services, standardized rules based on the most restrictive interpretations could lead to limits on the number of social, recreation, and education programs you can ask for; recreational services that take place in the home or only include students with disabilities; how much participants can boost pay rates, especially to staff who are also relatives; and policies that determine what cost-effectiveness means within an individualized service without addressing the individual’s unique needs or regional factors.

This plan that DDS will create to provide consistency across Regional Centers in SDP must have public input. As soon as we hear how that might be done, we will let you know. Hopefully, the public input will convey to DDS the flexibility we need to make SDP work — without the inconsistency that Regional Centers have developed in implementation — and guide a plan to assist families to “Think Outside the Box,” which is what made the original pilot truly cost-effective.

Despite the new state budget, in reality, there is no legal binding mandate or instruction to Regional Center service coordinators to reduce the cost of SDP budgets by 10%. The savings are likely expected to come from the natural cost savings built into the program.

If you do experience a Regional Center coordinator insisting on cuts that have come either from AB 143 or from federal Medicaid cuts, ask to see the policy and instructions from the Regional Center in writing. Remind your coordinator that cost savings in the SDP come from the flexibility it provides participants in using the funding to meet their needs. You also have multiple ways to appeal Regional Center decisions:

• Fair Hearing Appeal
• Section 4731 Complaint
• You can file a complaint with the State Council on Developmental Disabilities, and mark your complaint to also apply to “all others similarly situated.”

SDP participants might also experience pushback from Regional Centers when their budgets and spending plans are renewed. Keep in mind:

• Link items in your budget to IPP goals.
• Try to use as few service codes as possible to make it easier to adjust your spending plan.
• Pay vendors reasonable rates.