COMMITTEE ON LEGISLATIVE RESEARCH
OVERSIGHT DIVISION
FISCAL NOTE
L.R. NO.: 3534-01
BILL NO.: SB 823
SUBJECT: Establishes the Missouri Works Program
TYPE: Corrected
DATE: March 6, 2000
# Corrected to remove assumptions incorrectly included in agency response.
FISCAL SUMMARY
| FUND AFFECTED | FY 2001 | FY 2002 | FY 2003 |
| General Revenue | ($3,793,967) | ($7,838,365) | ($8,179,261) |
| Total Estimated
Net Effect on All State Funds |
($3,793,967) | ($7,838,365) | ($8,179,261) |
| FUND AFFECTED | FY 2001 | FY 2002 | FY 2003 |
| Federal | $0 | $0 | $0 |
| Total Estimated
Net Effect on All Federal Funds* |
$0 | $0 | $0 |
* Savings and costs of approximately $2,000,000 net to $0.
| FUND AFFECTED | FY 2001 | FY 2002 | FY 2003 |
| Local Government | $0 | $0 | $0 |
Numbers within parentheses: ( ) indicate costs or losses.
This fiscal note contains 6 pages.
ASSUMPTION
Officials from the Office of Administration assume this proposal will not fiscally affect their agency.
Officials from the Department of Social Services - Division of Family Services (DFS) stated they see two distinct pieces to this proposal: 1) a separate state program for non-exempt individuals with severe or multiple barriers to participation and 2) the Missouri Works Program.
# SEPARATE STATE PROGRAM FOR NON-EXEMPT INDIVIDUALS WITH SEVERE # OR MULTIPLE BARRIERS TO PARTICIPATION: (Section 208.071.3 to .5)
In Section 208.071.3 regarding self-sufficiency pacts, the DFS is already meeting this requirement of the legislation.
As stated in Section 208.071.4, Temporary Assistance benefits will be paid out of State Maintenance of Effort (MOE) funds. There will be no additional cost associated with paying cash assistance from MOE. The DFS would shift $26,970,084 in benefits from Temporary Assistance for Needy Families (TANF) to MOE funds. This shift is not reflected in the fiscal note as it is not additional effort or responsibility for the DFS.
MISSOURI WORKS PROGRAM: (Section 208.326.1 - 10)
The DFS has made the following assumptions related to this proposal:
ASSUMPTION (continued)
Therefore, the costs for the Missouri Works Program can be summarized as follows:
$5,356 Wage per Participant
1,080 Work Related Expense Stipend
35 Unemployment/Worker's Compensation Coverage
250 Retention Bonus - 90 days
500 Retention Bonus - 180 days
1,800 Contracted Case Management
1,353 Administrative Costs
$10,374 Annual Cost per Participant
x1,000 Participants/year
$10,374,000 Total annual cost of Missouri Works Program
The above costs were split between state and federal funds for fiscal note purposes.
The DFS also assumes a savings from the TANF Block Grant from the average monthly Temporary Assistance benefit that would have been paid to the 1,000 participants of the Missouri Works Program. The savings was calculated as follows:
$1,000 Number of participants
x $ 243 Average grant
$ 243,000
x 12 Months
$ 2,916,000 TANF Block Grant Savings
This total would be split 83% federal ($2,420,280) and 17% General Revenue ($495,720).
ASSUMPTION (continued)
In Section 208.326.6 it states that the DSS is provide assistance to localities seeking to secure grant funding. To address this section it is DFS' plan to receive technical assistance from an agency, which specializes in grant writing.
For the purpose of this estimate, the DFS contacted Grant Link, Inc. Grant Link provides several different levels of consultation. For this illustration DFS will use the least expense option, which is $495 annually.
The DFS also assumed they would need one additional FTE to implement the proposal. The DFS stated they would need one Program Development Specialist ($39,696) to develop the contract language, monitor contract compliance and ensure payments to contractors. The FTE would need the accompanying expense and equipment items as well. Oversight has removed the office space expense from the fiscal cost estimate assuming the new FTE would locate in existing space.
Finally, the DFS stated that if TANF or Welfare to Work dollars are used for this program, the funds are considered assistance and count toward the five year lifetime benefit limits. If State only Maintenance of Effort funds are used, the time clock for the 5 year assistance stops for the participants.
Officials from the Department of Economic Development stated they do not anticipate fiscal impact for personal service or expense and equipment funds; only a diversion of Federal Welfare to Work (WtW) program funds.
| FISCAL IMPACT - State Government | FY 2001
(10 Mo.) |
FY 2002 | FY 2003 |
| GENERAL REVENUE FUND | |||
| Savings - Department of Social Services | |||
| Reduction in TANF Block Grant Costs | $247,860 | $495,720 | $495,720 |
| Costs - Department of Social Services | |||
| Personal Service (1 FTE) | ($33,893) | ($41,706) | ($42,748) |
| Fringe Benefits | ($10,422) | ($12,824) | ($13,145) |
| Expense and Equipment for FTE | ($20,240) | ($14,583) | ($15,018) |
| Grant Link | ($412) | ($510) | ($525) |
| Missouri Works Program | ($3,976,860) | ($8,264,462) | ($8,603,545) |
| Total Costs - Dept. of Social Services | ($4,041,827) | ($8,334,085) | ($8,674,981) |
| ESTIMATED NET EFFECT ON | |||
| GENERAL REVENUE FUND | ($3,793,967) | ($7,838,365) | ($8,179,261) |
| FISCAL IMPACT - State Government | FY 2001
(10 Mo.) |
FY 2002 | FY 2003 |
| FEDERAL FUNDS | |||
| Savings - Department of Social Services | |||
| Reduction in TANF Block Grant Costs | $1,210,140 | $2,420,280 | $2,420,280 |
| Costs - Department of Social Services | |||
| Missouri Works Program | ($1,210,140) | ($2,420,280) | ($2,420,280) |
| ESTIMATED NET EFFECT ON | |||
| FEDERAL FUNDS | $0 | $0 | $0 |
| FISCAL IMPACT - Local Government | FY 2001
(10 Mo.) |
FY 2002 | FY 2003 |
| $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 establishes the Missouri Works Program to provide community service jobs to welfare recipients to help them prepare for permanent unsubsidized employment.
Currently, Section 208.071, RSMo, requires the Department of Social Services to make individual assessments of certain public assistance recipients. New language states that, upon assessment, the Department should develop a self-sufficiency pact with the recipient. If recipients face barriers to participation in work activities, they will be required to participate in activities appropriate to their circumstances. Such individuals will receive temporary assistance from state maintenance of effort funds instead of federal Temporary Assistance for Needy
Families (TANF) benefits during their participation.
A new Section 208.326 creates the Missouri Works program. The program must provide jobs to 1,000 TANF recipients per month, divided among at least three pilot sites throughout the state.
The Department must contract with not-for-profit agencies who will help participants in their job-seeking efforts and may give preference to communities offering local funds for the program.
Program participants must work at least twenty hours per week for up to one year at minimum wage or above. Participants will also receive a monthly stipend of $90 for work-related
expenses and will receive TANF subsidized child care. The participant may also be eligible for certain TANF grants, depending on wages. If funding is available, the Department shall allow bonus payments to participants who obtain unsubsidized employment after completion of the program.
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
Department of Economic Development
Office of Administration
Jeanne Jarrett, CPA
Director
March 6, 2000