SB 0979 - Fiscal Note

Fiscal Note - SB 0979 - Revises eligibility standards for public assistance

COMMITTEE ON LEGISLATIVE RESEARCH

OVERSIGHT DIVISION

FISCAL NOTE

L.R. NO. 4012-01

BILL NO. SB 979

SUBJECT: Revises Eligibility Standards for Public Assistance

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	($349,881)	($435,585)	($448,952)
Total Estimated Net Effect on All State Funds	($349,881)	($435,585)	($448,952)

ESTIMATED NET EFFECT ON FEDERAL FUNDS
FUND AFFECTED	FY 1999	FY 2000	FY 2001
Federal	($434,831)	($541,299)	($560,721)
Total Estimated Net Effect on All Federal Funds	($434,831)	($541,299)	($560,721)

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 Legal Services and Division of Child Support Enforcement assume this proposal will not fiscally impact their agencies.

Officials from the Department of Social Services - Division of Family Services (DFS) assume that at least 50% of cases denied or closed due to budgeting lump sum payments as income would be eligible for cash assistance when this payment is treated as an available resource and the higher resource limit is applied. During the most recent 12 months, 89 cases were closed due to budgeting lump sum payments as income. At least half of these cases, or 45 families would remain eligible using policy in the new legislation. DFS assumed that all unemployed parent cases which were denied due to lack of work history would be approved. DFS also assumes that all Unemployed Parents (UP) cases that closed due to the parent working over 100 hours would remain eligible. During the most recent 12 months, 8 applications were denied due to the parent either working more than 100 hours, or due to the parent lacking a work history. In the most recent 12 months, 14 UP cases were closed due to the parent working more than 100 hours.

The DFS assumes the proposed legislation would add 22 families to those eligible for cash benefits.

During the most recent 12 months, 504 cases were denied eligibility due to excess available resources. There were 118 cases closed due to excess resources during that time period. Because the proposal applies the less restrictive resource limit only to recipients, and not to applicants, denials based on resources would be unchanged. At least half of those cases closed due to excess available resources, or 59 families, would remain eligible.

The DFS assumes the proposal will result in increased assistance benefits for the newly eligible clients. The costs were split between General Revenue and federal funds.

Officials from the Department of Social Services - Division of Medical Services (DMS) stated that according to the DFS, during the last 12 months 89 cases were closed due to budgeting the lump sum payments as income and 118 cases were closed due to excess resources. Assuming an average of 1 adult and 2 children per case, this would result in an increase in Medicaid recipients of 377 persons. Based on an average cost for Medicaid benefits of $113.97 per person per month, this would result in an annual cost of $429,667 in FY 99. The average Medicaid costs for FY 00 and FY 01 are estimated at $119.02 and $125.59 resulting in annual costs of $538,446 for FY 00 and $568,169 for FY01. These costs were split between federal and state funds.

FISCAL IMPACT - State Government	FY 1999	FY 2000	FY 2001
	(10 Mo.)
GENERAL REVENUE FUND
Costs - Department of Social Services -
Division of Family Services
Increased Assistance Benefits	($179,045)	($221,499)	($223,048)
Costs - Department of Social Services
Division of Medical Services
Increased Medicaid Payments	($170,836)	($214,086)	($225,904)
ESTIMATED NET EFFECT ON
GENERAL REVENUE FUND	($349,881)	($435,585)	($448,952)
FEDERAL FUNDS
Costs - Department of Social Services -
Division of Family Services
Increased Assistance Benefits	($175,359)	($216,939)	($218,456)
Costs - Department of Social Services
Division of Medical Services
Increased Medicaid Payments	($258,831)	($324,360)	($342,265)
ESTIMATED NET EFFECT ON
FEDERAL FUNDS	($434,831)	($541,299)	($560,721)
FISCAL IMPACT - Local Government	FY 1999	FY 2000	FY 2001
	(10 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 modify the statutes to encourage the maintenance of two-parent families by eliminating federal requirements relating to the former Aid to Families with Dependent Children (AFDC) program. The proposal sets minimum uniform standards for income and asset requirements in the Department of Social Services. It requires the modification of asset requirements that are no longer appropriate or required in light of welfare reforms. The repeal of these rules is based on the need to allow recipients of public assistance greater flexibility to accumulate assets in order to move from welfare to work.

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