SB 0980 - Fiscal Note

Fiscal Note - SB 0980 - Revises state welfare accountability and assessment

COMMITTEE ON LEGISLATIVE RESEARCH

OVERSIGHT DIVISION

FISCAL NOTE

L.R. NO. 4011-01

BILL NO. SB 980

SUBJECT: Revises State Welfare Accountability and Assessment

TYPE: Original

DATE: March 18, 1998

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FISCAL SUMMARY

ESTIMATED NET EFFECT ON STATE FUNDS
FUND AFFECTED	FY 1999	FY 2000	FY 2001
General Revenue	($12,966,800)	($5,359,200)	($5,359,200)
Total Estimated Net Effect on All State Funds	($12,966,800)	($5,359,200)	($5,359,200)

ESTIMATED NET EFFECT ON FEDERAL FUNDS
FUND AFFECTED	FY 1999	FY 2000	FY 2001
None
Total Estimated Net Effect on All Federal Funds	$0	$0	$0

ESTIMATED NET EFFECT ON LOCAL FUNDS
FUND AFFECTED	FY 1999	FY 2000	FY 2001
Local Government	$0	$0	$0

Numbers within parentheses: ( ) indicate costs or losses

This fiscal note contains 4 pages.

FISCAL ANALYSIS

ASSUMPTION

Officials from the Department of Social Services - Division of Family Services (DFS) assume enactment of the proposed legislation will require the DFS to complete and in-depth assessment on each recipient of Temporary Assistance for Needy Families (TANF) funding who: 1) has attained eighteen years of age; and 2) has not completed high school or obtained a certificate of high school equivalency and is not attending secondary school. Assessment parameters are defined in the proposal.

The DFS assumes they will contract with outside entities to perform assessments for compliance. Time constraints on performance expectations of workers, and staff education/training levels, coupled with current staffing levels themselves, do not make this a viable worker task. The cost of the assessment including the individual's background, proficiencies, skills deficiencies, education level, work history, employment goals, marketable skills, interests, aptitudes, employment preference, as well as factors affecting employability or ability to meet participation requirements (e.g. health, physical or mental limitations, child care, transportation, family circumstances, homelessness, domestic violence, medical needs, substance abuse, and special needs of any child of the individual) was estimated by Vocational Rehabilitation in comparison to their assessment costs. That cost is $500 to $600. The DFS uses the average of $550 for fiscal impact purposes.

The DFS assumes there are 18,461 TANF recipients who meet the conditions for assessment. That amount is 28% of current assistance receiving adult population (YTD average = 64,762). The DFS assumed that 28% is a constant average.

DFS budget decision projection is an average of 61,000 households for FY99. Data management reports reveal an average of 2900 TANF approvals monthly. The DFS further assumes that number as a constant through FY01. Initially, upon enactment of this proposal, 28% of the 61,000 households will need to be assessed, meeting the criteria as outlined in the proposed legislation. Thereafter, it is assumed that 28% of the 2,900 new approvals (monthly) will be assessed. The DFS assumes that this legislation, if passed, would be enacted in October '98 yielding only 10 months in the Fiscal Year 1999. Oversight notes that the time span from October 1998 to June 1999 results in 9 months, not 10. As a result, Oversight adjusted the fiscal estimate accordingly.

ASSUMPTION (continued)

The DFS provided the following analysis to document the cost estimate:

FY99 (October 1998) 61,000 (includes total population plus new approvals for month) x 28% = 17,080. $550 x 17,080 = $9,394,000.

November '98: 2900 new approvals x 28% = 812 mandated assayees x $550.00/test = $446,600 for that month. The DFS repeated this same estimate for the next 7 months, ending on June 1999. Therefore, for Fiscal Year 1999, the testing impact will be $9,394,000 + (8 months x $446,600 = $3,572,800) or $12,966,800.

The DFS estimated that for FY00 the cost will be: 12 x 446,600 = $5,359,200, and for FY01, the cost will be the same as FY00.

The DFS assume the proposal requires TANF benefits to be paid retroactively to the date of application. Currently cash benefits are paid for the month in which the application is approved or the month in which the 30th day from the date of application occurs, whichever is earlier.

DFS can not project what cost would be incurred by paying cash benefits retroactive to the date of application for approvals. That would be contingent on the household size (grant amounts vary according to that and available resources) and also, the day of the month the application was made, as the eligible amount would be prorated. An idea as to the number of approvals that would be due assistance payments could be illustrated by figures from the December Data Management FY 1997 TANF applications. There were 4,361 applications, of which 2,931 were approved. Of those, 1,073 were approved in the month of December, while 1,858 were approved the following month. The clients would be due some amount retroactive to their December application dates. That represents 63% of the December approvals.

DFS can not project how many of the referenced participants will be deemed to have "severe barriers" as stipulated by legislation. Thus, the DFS does not know how many will need to undergo training/employment preparation financed through state-only funding. A cost projection cannot be made on those services.

The DFS assumes funding for impact statements as 100% GR as an Administrative cost for assessments.

FISCAL IMPACT - State Government	FY 1999	FY 2000	FY 2001
	(9 Mo.)
GENERAL REVENUE FUND
Costs - Department of Social Services
Division of Family Services
Contracted Assessments	($12,966,800)	($5,359,200)	($5,359,200)
ESTIMATED NET EFFECT ON
GENERAL REVENUE FUND	($12,966,800)	($5,359,200)	($5,359,200)
FISCAL IMPACT - Local Government	FY 1999	FY 2000	FY 2001
	(9 Mo.)
	$0	$0	$0

FISCAL IMPACT - Small Business

No direct fiscal impact to small businesses would be expected as a result of this proposal.

DESCRIPTION

This proposal will implement provisions to ensure accountability on the part of the state agency administering programs that serve low-income families. The act modifies and expands the self-sufficiency program established in 1994. No participant in the program may be assigned to any education, training, or employment program prior to an individualized assessment relating to skill, experience, and employability. Department of Social Service staff will work with the individual to identify the needs of the client in order to meet certain self-sufficiency criteria.

This legislation is not federally mandated, would not duplicate any other program and would not require additional capital improvements or rental space.

SOURCES OF INFORMATION

Department of Social Services

Jeanne Jarrett, CPA

Director

March 18, 1998