INDIANAPOLIS – Indiana’s budget crunch has become so severe that some state workers have suggested leaving people with severe disabilities at homeless shelters if they can’t be cared for at home, parents and advocates said.

They said workers at Indiana’s Bureau of Developmental Disabilities Services have told parents that’s one option they have when families can no longer care for children at home and haven’t received Medicaid waivers that pay for services that help children live independently.

Marcus Barlow, a spokesman for the Family and Social Services Administration, the umbrella agency that includes the bureau, said suggesting homeless shelters is not the agency’s policy and that workers who did so would be disciplined.

But that’s exactly what Becky Holladay of Battle Ground said a BDDS worker told her when she called to ask about the waiver she’s seeking for her 22-year-old son, Cameron Dunn, who has epilepsy, autism and attention-deficit hyperactivity disorder.

“We are people and they are people,” she told members of the General Assembly’s Commission on Developmental Disabilities on Tuesday. “They have lives that are worth something.”

The commission’s chairwoman, Rep. Sheila Klinker, D-Lafayette, said she has heard similar stories from other witnesses who were told they could abandon their children. She scolded Julia Holloway, director of FSSA’s Division of Disability and Rehabilitative Services.

“We’ve got to stop telling people that they have to take their children to a homeless shelter,” Klinker said after Holloway testified on another topic.

Kim Dodson, associate executive director of The Arc of Indiana advocacy group, speculated the suggestions result from frustration among BDDS staff.

Families have become more outspoken in complaining about waiting for waivers – waiting lists had more than 20,000 names last month – and upset that FSSA has reduced services as Gov. Mitch Daniels has cut its budget. The Arc says cuts since July have eliminated 2,000 waiver slots.

“It is something we are hearing from all over the state, that families are being told this is an alternative for them,” Dodson said. “A homeless shelter would never be able to serve these people.”

The pressure is being felt elsewhere, too. Daunna Minnich of Bloomington said Indiana Department of Education funding for residential treatment for her 18-year-old daughter, Sabrina, is due to run out Sunday. Officials at Damar Services Inc. of Indianapolis have told Minnich that unless she takes Sabrina home to Bloomington, the agency will take her to a homeless shelter.

Jim Dalton, Damar’s chief operating officer, said he could not comment directly on any specific case, but said Damar would never leave a client at a homeless shelter, even as it finds itself stuck with some who’ve aged out of school-funded services but haven’t received waivers for services.