Legislature(1993 - 1994)
03/12/1993 03:50 PM HES
* first hearing in first committee of referral
= bill was previously heard/scheduled
= bill was previously heard/scheduled
Chairman Rieger announced that SB 101 (ELIGIBILITY FOR PUBLIC ASSISTANCE) would be heard next. He asked JAN HANSEN, Director, Division of Public Assistance, Department of Health & Social Services, to come before the committee to answer questions relating to the legislation. Chairman Rieger asked Ms. Hansen to explain page 2, Section 3. Ms. Hansen said that section concerns the department adopting regulations. Currently, the needs standard and payment standard are exactly the same. The legislation establishes the needs standard and repay. Ms. Hansen said with the legislation the department is proposing to create a reduction in their payment. Currently, the needs standard would be at the level it is and the department would pay less. This would allow the department regulations so that they could increase the needs standard. Ms. Hansen said the department is looking at ways to create work incentives so that people on welfare who work would get to keep some of the money that they earned. The department is trying to look for a way to do that without it costing a lot of money. CHAIRMAN RIEGER said he received a phone call from a person in a rural village who described a problem where they had a baby sitter who had to quit because the extra income would put them out of the eligibility standard for their AFDC. Ms. Hansen said the bill addresses that problem slightly in that if a person's income was within a few dollars of being eligible and the baby-sitting would make a person ineligible, they would be able to still qualify. The bill would allow a person who has a little higher income to still qualify for a small grant. She said at a given point when a person goes to work, their earned income makes them ineligible. Chairman Rieger asked if AFDC doesn't tapper off with increased income. Ms. Hansen said AFDC supplements what a person has. If a person has $500 in income, it will be supplemented up to the standard. Ms. Hansen explained that currently in federal regulations if people are working they get to keep some of what they earn, $30 and a third of the remainder, but only for four months. The department wants to expand that incentive, but that isn't allowed under federal law. It can only be done under a waiver. Under a waiver you can only do it for half of your case load under an experimental project. There have been indications from the Clinton Administration that some provisions could change which might allow the state to change that provision. Chairman Rieger asked what increases there are in other programs. He asked what else is happening with the Health and Social Service budget. Ms. Hansen said other things that are occurring that are part of the department's whole package have been to the Jobs Program which is the basic Welfare to Work Program. It is being expanded by federal mandate. This year there has been an average of 930 clients each month. Next year that will rise to 1,340 which is the required number to meet federal targets. Ms. Hansen said next year the program has to serve more unemployed parents rather than single parent families because of another federal regulation change. The department is required to do more work over and above the job training, job search, work experience, and adult basic education. The department will be expanding the work experience component, will be serving more people and unemployed parents. The adult basic education component is being expanded because people have to be brought up to a 8.9 literacy level and then to a G.E.D. level. Ms. Hansen said the department is slightly increasing the amount of supportive services in the Jobs Program. Supportive services is funding which goes for things like work clothes, car repair, or bus fare. Ms. Hansen said the governor's budget is proposing five positions for what is called "self sufficiency in our front line offices." The first time when a client comes in to apply for AFDC, they wouldn't just discuss whether the person is eligible. A ten minute component would be added to discuss what their goals and strategies are for getting off of welfare. Other things that may be discussed are whether the client needs Adult Basic Education, day care, or substance abuse help. The Jobs Program only serves 16 percent of the welfare recipients. Ms. Hansen said there are many clients who want to be served under the Jobs Program and are disappointed because they can't get into the program. Number 287 SENATOR ELLIS asked when the rateable reduction becomes effective. Ms. Hansen said it would be effective July 1. Senator Ellis asked how much time people would have to adjust to the new check amount. Ms. Hansen said the department's intention is to notify the clients after the bill passes the legislature. That would give the clients a minimum of six weeks. She explained that whenever the department does a mass change, a computer notice is generated. As the benefit is changed, the computer automatically tells the person what their grant was and what it will be. There is text in the notice that explains why. Senator Ellis asked how Section 8 housing works. Ms. Hansen said the amount the client pays is a percentage of their income. As their AFDC income goes down, their rent would be slightly adjusted downward. Senator Ellis asked how many adults and children are on AFDC. Ms. Hansen said there were 20,000 children and 12,000 adults in 1992. The figure is probably higher for the current year. She said the total cost of AFDC for FY 93, including the department's supplemental, will be $120 million. On top of that, when the department calculates the proposed caseload increases for next year at about 11 percent and the COLA if it is not suspended, the projected cost for FY 94 would be $137 million. If the changes in the bill were implemented, it would bring the FY 94 AFDC budget to $124 million. Ms. Hansen referred to the APA Program and said there is adult public assistance and then there is old age assistance hold harmless. The two together is the figure that creates the APA figure. She said it will result in a slightly higher figure paid in FY 94 than in FY 93. Just for adult public assistance without the old age assistance hold harmless, there would actually be a slight reduction in dollars in FY 94. In FY 93, it will be $34.8 million for adult public assistance. The proposed budget with the COLA and rateable reductions for FY 94 is $33.7 million. There was discussion regarding a chart the members had in their committee packets. Number 413 Senator Ellis asked Ms. Hansen how much federal money the state would be turning away if the bill were to become law. He asked her to speak to the fiscal notes. Ms. Hansen explained that in the AFDC Program the reduction, if the bill were to become law, would be $12,651,000 total. She said that would be 50 percent federal and 50 percent general fund. Ms. Hansen said the savings to the APA Program would be $5,134,000 and would be all general funds because of the different structures between the APA Program and the AFDC Program. Senator Ellis asked Ms. Hansen to review the fiscal notes. Ms. Hansen referred to the first fiscal note and said it is for the AFDC Program. The amount of savings that is attributable to the rateable reduction for FY 94 is $8.6 million. She noted that there are five fiscal notes as there are various components of the bill. The second fiscal note is suspending the APA COLA and the dollar amount related to the suspension is $607 thousand. Ms. Hansen said the third fiscal note is to implement the rateable reduction in the APA Program which would produce a savings of $4.051 million. The forth fiscal note is the interim assistance reimbursement portion. It creates a cost shift of what is currently $434 thousand general funds to become $434 thousand of federal funds. The fiscal note shows zero, but there is $434 thousand general fund savings. Chairman Rieger indicated there is a misunderstanding in the numbering of the fiscal notes. Ms. Hansen said the fifth fiscal note relates to the restructuring of the needs standards for AFDC unemployed parents. It produces a savings of $1.944 million. She said the last fiscal note relates to the funds that are directly attributable to suspension of the COLA for AFDC which is $2.107 million. Number 531 SENATOR MILLER moved that SB 101 be passed out of committee with individual recommendations. There were several objections. SENATOR ELLIS said he has several amendments but they are in rough draft form. He asked if he could have more time to prepare amendments. CHAIRMAN RIEGER said he would be willing to hold the bill until the following Monday. SENATOR MILLER moved and asked unanimous consent that he be allowed to withdraw his motion. Hearing no objection, the motion carried. Senator Ellis referred to the bill and said it represents about seven policy calls which have been considered by the previous administrations. He said he is concerned about all seven changes in a single year. Senator Ellis said he would like to know what the underlying policy reasons are for the cuts. Number 579 SENATOR SHARP asked what the COLA difference was between FY 92 and FY 93. Ms. Hansen said the amount added was 3 percent over the previous year and was granted January 1, 1993. TAPE 93-23, SIDE B Number 001 Ms. Hansen indicated the 3 percent is a COLA on the total amount paid, federal and state shares. There was general discussion regarding budget increases and decreases in state departments and programs.