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May 16, 2013
Foon Rhee: Are vet homes the best use of money?

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(May 16 -- By Foon Rhee)

When it comes to California's veterans homes, I'm conflicted.

Destitute and disabled veterans who have nowhere else to go absolutely deserve dignified places to live. It made no sense to spend tens of millions to build two state-of-the-art homes in Fresno and Redding and have them sit empty for months on end.

Still, veterans homes are awfully expensive to operate - a net cost to the state's general fund of about $119 million in 2011-12 and $165 million in the current fiscal year while ramping up to open the two new homes. That eats up almost the entire general fund allocation for the state veterans department. With so many new veterans as the Afghanistan war ends and the military downsizes, money is at a premium for other programs and services.

So how wise is it to sink so much into veterans homes?

That dilemma is highlighted by a new report from state Auditor Elaine Howle that points out that in recent years, fees, reimbursements and other revenues have covered far less than half the cost of running the homes. The net cost to the general fund is about $48,000 for each resident.

Released last week, the report calls on the state to make sure it is getting all potential federal benefits and public and private insurance payments, and to look at contracting out more services and leasing more unused space.

The auditor also raised the possibility of increasing how much residents are charged. Now, what vets pay is capped at between $2,400 and $5,600 a month, depending on their income and level of care. The maximums are often much less than what private facilities charge.

The report urges officials to look at whether resident fees should be based on total assets - including property, stocks and cars - and not just income. It also says legislators should review restrictions on collecting reimbursements from veterans' estates after they pass away.

Any changes are sure to cause concern among veterans and their families.

Yet if it's a choice between an older veteran with an untapped nest egg paying more and a younger vet with little savings getting needed help, it's an easy call for me.

Also, as the auditor points out, generating more revenue would allow more needy veterans to live in the homes. The six existing homes are budgeted for 1,781 residents, but there are about 470 licensed beds that are empty because there is not enough money to hire additional staff. At the same time, there are more than 560 veterans on waiting lists.

The 300-bed Fresno home and 150-bed one in Redding are scheduled to slowly begin admitting residents in October. Construction on the homes was completed in early 2012 at a combined cost of $247 million, but budget shortfalls kept them unused. Instead, the state spent $280,000 a month to keep the buildings from falling into disrepair.

In response to the audit, the state Department of Veterans Affairs says it generally agrees with the findings and will look at how to increase revenues at the homes. Deputy Secretary J.P. Tremblay told me Thursday that it's "too early to say" whether the department will propose any changes in fees for veterans.

It's clear to me that in coming up with a plan, CalVet needs to keep all veterans in mind, not just those living in the homes.

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