State cuts could cause lapse in transportation services for disabled adults

SAN FRANCISCO - Some adults living with special needs might be getting a lapse in service due to state funding cuts. 

A rate reform by the Department of Developmental Services is set to go into effect early 2026 as the state works to standardize the way it reimburses service providers.

Gateway Transportation is one of the few providers in San Francisco helping adults with intellectual and developmental disabilities get around. It has a fleet of buses that take people to day programs that offer them community and income.

Owner Raymond Bell said the cost of operating was already climbing at an unsustainable rate. For the last two years, he has only taken a $1,500 income.

He said the cuts are going to force him to close his business before the end of the year after 13 years of service.

What they're saying:

"I have had to take money out of my account to pay payroll and expenses to keep the company going and we’re at a point now where with this substantial cut, I can’t afford to do it anymore," Bell said.

Vice President of Gateway Transportation Craig Allen said he’ll have to lay off 30 employees before Christmas.

"We’re outraged, for our Bay View Hunter’s Point employees and for the 200 people we transport to this program," Allen said.

Bell said he understands the need. He started the company because he has two family members with Down’s Syndrome who used his buses as well.

Impacts of service

Ripple Effects:

Inside the walls of Creativity Explored in Potrero Hill, artists like Yukari Sakura are working on their masterpieces.

"This is an ice cream themed painting of a unicorn," she said. "I usually work as an artist here at the Creativity Explored and one of my paintings was used as merchandise at the California Academy of Sciences."

It’s a day program for adults with developmental disabilities which offers the chance for them to express themselves through art, earn an income by selling their pieces, and establish a sense of community.

"Most of the people that come here day to day they don’t have a lot of other opportunities for community," said the organization’s Associate Director for Social Services Roshann Pressman.

The clients, some who’ve attended for decades, said they need Gateway Transportation to get there. 

"They’re kind of safe for me so I can get around a little bit," said client Vanessa Luo.

Pressman said about 90 people with intellectual and developmental disabilities attend the day program between two locations each day.

She said the nonprofit is minimally impacted by the rate reform directly. However, without the transportation, fewer people will attend on a daily basis, which means fewer reimbursement dollars to fund the day program.

"It is absolutely life changing," Pressman said. "The transportation system is a critical part of our clients support systems."

What the state is saying

The backstory:

DDS said confirmed a rate reform will change how much providers get reimbursed.

DDS said the new rates "better and more consistently reflect today’s cost and workforce needs."

A spokesperson wrote in an email that it began with a 2019 rate study "addressing the sustainability, quality, and transparency of community-based services for individuals with intellectual and developmental disabilities (IDD)."

Until February 2026, the state issued a hold harmless policy to maintain funding to providers with higher pre-existing rates. 

"We found out last Wednesday that the hold harmless rates were not going to hold us harmless," said Allen.

Allen added that he has spent months trying to convince DDS to change its rate plans, even writing to the Governor.

"This is not a good look," Allen said. "This is the city you built your career in." 

DDS said Gateway did exactly what the department asked providers to do when they sent in data and suggestions if there was a problem with the new rate model.

What's next:

Now, the state said it’s analyzing the data and looking for solutions. 

If the state does not adjust the rates, Allen said he doubts another company will be able to replace them as costs to operate continue to climb.

"Instead of a desperately needed rate increase we’re going to cut the funding, which means not only can we do it but nobody else will be able to do it either," he said.

Gateway said it’ll stop operating its buses after December 19. It’s unclear after that how these people who use their services will get around in the immediate future.

The program operates under a government-funded nonprofit, the Golden Gate Regional Center. DDS said the regional center will need to look for a new provider.