Legislature(1993 - 1994)

01/25/1993 03:00 PM House HES

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
txt
                                                                               
           HOUSE HEALTH, EDUCATION AND SOCIAL SERVICES                         
                       STANDING COMMITTEE                                      
                        January 25, 1993                                       
                            3:00 p.m.                                          
                                                                               
  MEMBERS PRESENT                                                              
                                                                               
  Rep. Cynthia Toohey, Co-Chair                                                
  Rep. Con Bunde, Co-Chair                                                     
  Rep. Gary Davis, Vice Chair                                                  
  Rep. Tom Brice                                                               
  Rep. Bettye Davis                                                            
  Rep. Pete Kott                                                               
  Rep. Irene Nicholia                                                          
  Rep. Harley Olberg                                                           
  Rep. Al Vezey                                                                
                                                                               
  MEMBERS ABSENT                                                               
                                                                               
  None                                                                         
                                                                               
  OTHER LEGISLATORS PRESENT                                                    
                                                                               
  Rep. Jim Nordlund                                                            
                                                                               
  COMMITTEE CALENDAR                                                           
                                                                               
  Overview of the Department of Health and Social Services,                    
  Division of Public Assistance                                                
                                                                               
  WITNESS REGISTER                                                             
                                                                               
  Jay Livey, Deputy Commissioner                                               
  Department of Health and Social Services                                     
  P.O. Box 110601                                                              
  Juneau, Alaska 99811-0601                                                    
  (907) 465-3030                                                               
                                                                               
  Jan Hansen, Director                                                         
  Division of Public Assistance                                                
  Department of Health and Social Services                                     
  P.O. Box 110640                                                              
  Juneau, Alaska 99811-0640                                                    
  (907) 465-2680                                                               
                                                                               
  ACTION NARRATIVE                                                             
                                                                               
  TAPE 93-4, SIDE A                                                            
  Number 000                                                                   
                                                                               
  CO-CHAIR CON BUNDE called the meeting to order at 3 p.m.,                    
  noted members present, and announced he would chair the                      
  meeting.  He noted that the purpose of the meeting was to                    
  hear a 90-minute overview presentation on the Department of                  
  Health and Social Service's Division of Public Assistance.                   
                                                                               
  JAY LIVEY, DEPUTY COMMISSIONER, DEPARTMENT OF HEALTH AND                     
  SOCIAL SERVICES (DHSS), turned the presentation over to Ms.                  
  Jan Hansen.                                                                  
                                                                               
  JAN HANSEN, DIRECTOR, DIVISION OF PUBLIC ASSISTANCE,                         
  DEPARTMENT OF HEALTH AND SOCIAL SERVICES, began her                          
  presentation.  She announced her intention to describe the                   
  various and complex welfare programs the division                            
  administers so as to help the committee understand proposed                  
  program changes both in Alaska and the rest of the nation.                   
  She said she would describe client characteristics and                       
  program achievements to provide a context for proposed                       
  changes the department plans for FY94.  She acknowledged                     
  that national and state increases in welfare rolls and                       
  program expenditures were raising new interest in meeting                    
  such problems.                                                               
                                                                               
  MS. HANSEN said welfare rolls and expenses were tied to and                  
  grow along with economic factors, such as unemployment and                   
  worker migration, and with social factors such as teen                       
  parenthood.                                                                  
                                                                               
  MS. HANSEN introduced key staffers:  Randy Moore, the                        
  division's administrative officer; Curt Lomas, program                       
  officer for the Aid to Families with Dependent Children                      
  (AFDC) program; and Sandy Armstrong, program coordinator for                 
  the Job Opportunities and Basic Skills (JOBS) program.                       
                                                                               
  MS. HANSEN referred to two documents:  a FY94 program                        
  overview of the division (Attachment 1); and an article in                   
  the January 1993 issue of "Alaska Economic Trends," entitled                 
  "Welfare in Alaska -- Help or Hindrance to Self-                             
  Sufficiency?" (Attachment 2)                                                 
                                                                               
  MS. HANSEN referred to page one of Attachment 1, showing the                 
  division's program in a chart form.  Cash assistance                         
  programs included AFDC and Adult Public Assistance (APA).                    
  Assistance for specific needs includes programs for medical,                 
  home energy, food, emergency shelter and burial needs, and                   
  the specific programs that provide them.  In providing such                  
  services, the division works cooperatively with the Division                 
  of Public Health, the Departments of Labor, Education,                       
  Revenue and Community and Regional Affairs, and with private                 
  industry councils for various health, education and training                 
  programs.                                                                    
                                                                               
  MS. HANSEN also described the division's programs to                         
  increase self-sufficiency among welfare recipients.  The                     
  JOBS program, with a wide range of specific programs, is a                   
  key element of this effort, but there is also a program                      
  requiring some recipients of food stamps to enter education,                 
  job search and placement programs.  Other programs provide                   
  recipients with child care and Medicaid for a year after                     
  they take jobs to ease the transition from welfare to full                   
  employment.                                                                  
                                                                               
  MS. HANSEN briefly described the division's quality control                  
  function, which she said ensures that benefits go only to                    
  those truly qualified; and its fraud investigation function,                 
  which investigates and refers for prosecution cases of                       
  welfare fraud.  She described a complex computerized                         
  eligibility information system, which stores information on                  
  applicants and helps division workers assess applicants'                     
  eligibility.                                                                 
                                                                               
  Number 196                                                                   
                                                                               
  MS. HANSEN referred to page two of Attachment 1, showing                     
  FY92 expenditures of $182 million ($79 million from state                    
  general funds and $103 million from direct and matching                      
  federal funds) and how those expenditures were allocated                     
  among various programs.  She noted that AFDC is paid on a                    
  50-50 federal-state split basis and food stamps are paid                     
  directly from the federal government to the recipients,                      
  though the state and federal governments split                               
  administrative costs 50-50, with the state's share of AFDC                   
  administrative costs at approximately $5 million.                            
                                                                               
  MS. HANSEN referred to a graph on page three showing the                     
  annual totals of people on AFDC, APA, food stamps and                        
  Medicare programs, totalling some 64,000 people, though some                 
  recipients were enrolled in more than one program.                           
                                                                               
  MS. HANSEN referred to page three, which described the                       
  qualifications for AFDC, the level of payments to families                   
  of various sizes, the number of families enrolled,                           
  comparisons with other states and federal averages, and                      
  other information.  She differentiated between AFDC Basic,                   
  the traditional welfare program aimed at children of single                  
  mothers, and Unemployed Parent (UP), a federally-mandated                    
  program, which, as of October 1990, required states to                       
  include two-parent households in which one parent is                         
  unemployed.  The requirement resulted in larger caseloads in                 
  Alaska, and makes up about 40 percent of the increase in                     
  caseloads.  The AFDC program was supposed to be a short-term                 
  benefit for families, not a permanent means of support, she                  
  said.                                                                        
                                                                               
  MS. HANSEN stated that approximately 5.6 percent of the                      
  state's 586,000 residents (200,000 families) receive AFDC                    
  benefits, representing the poorest segment of the                            
  population.                                                                  
                                                                               
  Number 338                                                                   
                                                                               
  MS. HANSEN referred to page four of Attachment 1, a graph                    
  based on a client survey, showing reasons why people were                    
  enrolled in AFDC, including the inability to find work, low                  
  wages, poor job skills, and lack of child care or health                     
  insurance.                                                                   
                                                                               
  MS. HANSEN referred to pages five and six of Attachment 1,                   
  containing graphs breaking down AFDC cases by geographic                     
  location, race, and months of participation.  Fifty-five                     
  percent of AFDC cases have been on the rolls for less than                   
  two years, and 39 percent of current cases have been on the                  
  rolls for more than three years, she said.                                   
                                                                               
  Number 371                                                                   
                                                                               
  MS. HANSEN referred to page seven, displaying average                        
  caseloads per month since FY88, and showing growth from                      
  7,657 in FY88 to a projected 13,858 in FY94.  The increase                   
  is due both to the expansion into the UP program, and also                   
  increases in basic AFDC cases.  The page also showed an                      
  increase in the budget from $58 million in FY88 to a                         
  projected $125 million in FY94.                                              
                                                                               
  MS. HANSEN referred to page eight, describing the Adult                      
  Public Assistance programs.  A federal supplemental income                   
  program pays APA recipients $434 per month, which APA                        
  supplements with up to $374 per month.  An interim state                     
  assistance program pays up to $280 per month to those                        
  waiting for the federal government to determine whether they                 
  are eligible for supplemental security income.                               
                                                                               
  Number 375                                                                   
                                                                               
  MS. HANSEN referred to charts on page nine, showing average                  
  APA caseloads rising from 6,030 in FY88 to a projected 9,664                 
  in FY94, and a projected growth rate of 8.5 percent.                         
  Program costs also rose from $120 million in FY88 to a                       
  projected $36 million in FY94.                                               
                                                                               
  CURT LOMAS, AFDC PROGRAM OFFICER, noted that APA funds were                  
  paid entirely from state general funds, with no federal                      
  match.                                                                       
                                                                               
  Number 403                                                                   
                                                                               
  MS. HANSEN referred to page 10, which showed information                     
  including that 43,500 people in Alaska received food stamps,                 
  representing 7.4 percent of the population, below the 10                     
  percent national average.  She compared the 5.6 percent of                   
  the population on AFDC with the estimated 11.8 percent of                    
  the population living below the poverty level in the state.                  
  She said Alaskans living in rural areas, where marketbasket                  
  surveys show that food costs more, received higher food                      
  stamp benefits.                                                              
                                                                               
  MS. HANSEN referred to page 11, showing the food stamp                       
  caseload increased from 9,701 in FY88 to a projected 15,536                  
  in FY94.  Another graph showed the cost for the program rose                 
  from $27.2 million in FY88 to $52.6 million in FY94.                         
                                                                               
  Number 426                                                                   
                                                                               
  MS. HANSEN spoke on the division's fourth major program, the                 
  federal Job Opportunities and Basic Skills (JOBS) program,                   
  as outlined on page 12, which is aimed at helping welfare                    
  recipients who are least able to get jobs to do so.  She                     
  stated that the 39 percent who remain on AFDC for more than                  
  three years consume too much of the program money.  Teenage                  
  parenthood and the lack of a high-school diploma are prime                   
  indicators of long-term welfare dependency, she said.                        
                                                                               
  Number 458                                                                   
                                                                               
  REP. TOM BRICE asked where funds for JOBS came from.                         
                                                                               
  MS. HANSEN responded that the program is funded by the                       
  federal government at varying matching levels for different                  
  elements of the program.  The division also uses the                         
  services of other state and federal agencies for the JOBS                    
  program, she said.                                                           
                                                                               
  MS. HANSEN returned to page 12, briefly describing the                       
  services provided under JOBS, and the barriers to successful                 
  training and employment.                                                     
                                                                               
  Number 475                                                                   
                                                                               
  MS. HANSEN referred to page 13, which showed graphs                          
  outlining the different programs being used, such as basic                   
  education, job readiness, or post-secondary education, by                    
  the program's 930 participants as of December 1992.  The                     
  federal government will increase the required percentage of                  
  AFDC recipients to be enrolled in the JOBS program which,                    
  she said, will help increase the participation from 930 to                   
  1,340 people in FY94.                                                        
                                                                               
  Number 500                                                                   
                                                                               
  MS. HANSEN began to explain why the AFDC caseload is growing                 
  in Alaska.  She said the national trend since July 1989 has                  
  been steady growth, to record levels.  She referred to page                  
  14.  While Alaska ranked fifth in the nation last year in                    
  percentage of the population on AFDC, the state now ranks                    
  eighth, she said.                                                            
                                                                               
  MS. HANSEN referred to page 15 and to graphs showing that                    
  unemployment rates have generally been higher over the past                  
  three years, which she said was a partial cause of increased                 
  AFDC caseloads.  She also said client surveys showed that                    
  the Exxon Valdez oil spill and attendant expectations for                    
  employment opportunities drew workers to Alaska from the                     
  depressed Lower 48 states.  Tourism ads in Outside                           
  publications also tempt former Alaska residents to return to                 
  the state, the survey showed.                                                
                                                                               
  MS. HANSEN said that federally mandated increases in the                     
  Medicaid program, aimed at drawing pregnant, low-income                      
  women into prenatal care, also attracted some people to the                  
  AFDC rolls who had not previously known they might be                        
  eligible.  Other reasons for the increase in caseloads were                  
  increases in high school dropouts, teen pregnancies and                      
  unwed mothers, single-parent households, immigrants, and the                 
  poor, she said.                                                              
                                                                               
  Number 560                                                                   
                                                                               
  MS. HANSEN referred to page 16, which included charts                        
  showing the reasons why those on welfare came to Alaska, and                 
  the percentage of recipients who have been in the state less                 
  than one year, broken down by geographical area.                             
                                                                               
  Number 572                                                                   
                                                                               
  Answering a question from REP. HARLEY OLBERG, Ms. Hansen                     
  said the division compared 1992 rates to 1985 rates because                  
  the 1985 statistics were the only past numbers available.                    
                                                                               
  REP. CYNTHIA TOOHEY asked whether the division made                          
  allowances for seasonal fluctuations in unemployment rates                   
  as reflected in a chart on page 15.                                          
                                                                               
  MS. HANSEN answered that the department did not, but before                  
  1990 the AFDC caseloads did decrease in the summer.  She                     
  said the absence of seasonal job opportunities in recent                     
  years, in such fields as fishing or construction, has caused                 
  caseloads to stabilize, but not decrease, in the summer.                     
                                                                               
  Number 600                                                                   
                                                                               
  MS. HANSEN began speaking of efforts to contain growth in                    
  AFDC caseloads, which she called a more realistic goal than                  
  trying to reduce the load.  She referred to page 17.                         
  According to Ms. Hansen, the first step is a rigorous                        
  application process, somewhat akin to a mortgage                             
  application, which included computerized database cross-                     
  references in an effort to screen out unqualified                            
  applicants.  A quality control effort in recent years has                    
  reduced the error rate from 19 percent in 1980, the nation's                 
  worst, to 3.3 percent in 1992, she said.  The federal                        
  government allows a 6 percent error rate, but rebates 1                      
  percent of its contribution to AFDC (in this case, $1.2                      
  million) for each percentage point reduction the state                       
  realizes.  The state received $3.6 million in rebates last                   
  year, she said, justifying the staffing expense.                             
                                                                               
  Number 642                                                                   
                                                                               
  MS. HANSEN stated another tactic in lowering caseloads is                    
  the requirement that recipients submit monthly income and                    
  assets statements, which the department verifies.  An early                  
  fraud detection effort allows the department to check out                    
  suspicious new applicants before activating a claim.  Last                   
  year the department checked out 400 applicants, 40 percent                   
  of which were found to be fraudulent.  A post-certification                  
  fraud detection effort catches a few offenders.  Ms. Hansen                  
  said the division works with the Department of Law to                        
  prosecute deliberate fraud, and handles intentional                          
  noncriminal fraud by itself, suspending eligibility and                      
  deducting the amount fraudulently obtained from any future                   
  grant if those committing fraud are still enrolled, or                       
  requiring repayment if they are not.  The JOBS program                       
  represents a long-term effort to reduce AFDC caseloads by                    
  helping the recipients find jobs, according to Ms. Hansen.                   
                                                                               
  Number 666                                                                   
                                                                               
  MS. HANSEN discussed cost-containment efforts in the AFDC                    
  program.  She said the department is interested in lowering                  
  the level of benefits for some AFDC recipients.  They plan                   
  to suspend the cost of living allowance (COLA) normally                      
  granted at the start of a new calendar year.  They plan to                   
  begin paying welfare recipients less than their full needs,                  
  lowering the rates to the 1991 level for the AFDC program                    
  and to the 1990 level for the APA program.  The change would                 
  cut $53 from the maximum AFDC monthly benefit, but would cut                 
  $8.6 million from the program overall, she said.                             
                                                                               
  MS. HANSEN noted that welfare reform generally takes three                   
  forms:  changing behavior, saving money, and restructuring                   
  welfare systems; and Alaska is taking the money-saving                       
  approach.                                                                    
                                                                               
  Number 700                                                                   
                                                                               
  MS. HANSEN said the division will attempt to eliminate                       
  inequalities between the basic AFDC program and the                          
  unemployed parent program (AFDC-UP).  The AFDC-UP program                    
  pays $1,040 per month to a family with two parents and one                   
  child, compared to $950 to a mother with two children.                       
  Lowering the AFDC-UP rate by $90 per month to equal the AFDC                 
  rate would save the division about $1.9 million per year,                    
  she said.                                                                    
                                                                               
  TAPE 93-4, SIDE B                                                            
  Number 000                                                                   
                                                                               
  MS. HANSEN stated the department will also require those on                  
  Adult Public Assistance who receive the $280 monthly interim                 
  benefit while waiting for a determination of eligibility for                 
  federal supplemental income benefits to repay those benefits                 
  to the state after they receive their retroactive payments                   
  of $434 per month from the federal government.                               
                                                                               
  MS. HANSEN noted another small effort to reduce costs would                  
  be to prorate benefits from the date of application instead                  
  of from the first day of the month in which they apply.                      
  This change, which could be easily achieved, would save                      
  $475,000 in the APA program, she said.                                       
                                                                               
  MS. HANSEN explained that the reduction in welfare rates as                  
  of July 1 (the start of FY94) will have the largest impact                   
  on welfare expenditures.                                                     
                                                                               
  MS. HANSEN referred to the division's effort to determine                    
  barriers to self-sufficiency among welfare recipients,                       
  including a survey of clients and staff, focus meetings, and                 
  analysis of federal waiver restrictions and of other state's                 
  welfare waiver programs.  The study showed that those on                     
  welfare want to work but face barriers.  Results of the                      
  study are contained in Attachment 2, an article from the                     
  January 1993 issue of "Alaska Economic Trends" entitled                      
  "Welfare in Alaska -- Help or Hindrance to Self-                             
  Sufficiency?"                                                                
                                                                               
  MS. HANSEN said the division plans to put most of its hopes                  
  into the JOBS program, both because she believes it will be                  
  effective at winning jobs for long-term welfare recipients,                  
  and because the federal government requires that it be                       
  expanded.  She stated the department will also budget more                   
  money to give division staffers time during client contact                   
  to ask about welfare applicants' employment plans and                        
  capabilities, and to direct them toward appropriate basic                    
  employment and training resources.                                           
                                                                               
  Number 165                                                                   
                                                                               
  MS. HANSEN mentioned the job sampling program, which allows                  
  JOBS participants to visit job sites to observe those in an                  
  occupation of interest.  She mentioned a $120,000 federal                    
  grant to an alternative school in Wasilla, which is being                    
  used as a model of how to keep teen mothers in school.  She                  
  discussed a system that allows the division to cooperate                     
  with the Department of Labor to track JOBS program                           
  participants to see if they found jobs in the fields for                     
  which they trained, their pay levels, and other information.                 
                                                                               
  Number 213                                                                   
                                                                               
  MS. HANSEN noted other initiatives not yet decided upon.                     
  She said the division knows it would like waivers of some                    
  federal welfare program requirements that are disincentives                  
  to quit AFDC and go to work.  She would like to see those on                 
  AFDC who find jobs be able to keep more of their pay instead                 
  of having their welfare benefits reduced.  She would like                    
  waivers of a federal rule barring welfare payments to anyone                 
  working more than 100 hours a month, even if the resulting                   
  wages are low enough to qualify for welfare, which she said                  
  discourages people from taking low-paying but available                      
  jobs.  She would like waivers of the restrictions that                       
  disqualify welfare recipients who own cars worth more than a                 
  certain amount of money, which she said prevents such people                 
  from owning the reliable transportation they need to hold                    
  jobs.                                                                        
                                                                               
  MS. HANSEN stated the federal government requires rigorous                   
  study and evaluation of any waiver project, and requires a                   
  year-long demonstration project for half of the case load,                   
  that would also require outside evaluation.  Given such                      
  restrictions, she said, the up-front costs of such work,                     
  when applied to the relatively small client load in Alaska,                  
  do not balance out the projected savings through waivers.                    
  Demonstration programs for such waivers of disincentives                     
  would cost $750,000 over three years, she estimated.                         
                                                                               
  Number 267                                                                   
                                                                               
  With President Bill Clinton coming to office promising                       
  welfare reform, and with other states finding problems with                  
  the waiver process requirements, MS. HANSEN suggested it                     
  would be better to spend a year working with the American                    
  Public Welfare Association, the National Governors'                          
  Association and the U.S. Department of Health and Social                     
  Services to encourage Congress to lighten the legal                          
  strictures for waiver demonstration projects in hopes of                     
  later imposing a full set of waivers.                                        
                                                                               
  Number 282                                                                   
                                                                               
  MS. HANSEN mentioned other possible efforts, including                       
  offering vouchers to provide parents receiving AFDC with                     
  vouchers for child care, possibly on a 50-50 federal-state                   
  split, to allow such parents freedom to find a job, at which                 
  time they qualify for regular child care benefits.  Another                  
  possibility would be to allow welfare recipients, who will                   
  see their needs level decrease from $950 to $893 on July 1                   
  (the start of FY94), to earn back that $53 difference, or                    
  more, without penalty.  However, raising the needs standard                  
  to increase that difference would expand the pool of people                  
  qualified for AFDC and Medicaid, thus costing the state.                     
  Such changes are more attractive than waivers, she said,                     
  because they do not require the lengthy and expensive waiver                 
  process.                                                                     
                                                                               
  Number 346                                                                   
                                                                               
  CHAIR BUNDE asked Ms. Hansen to present her final points to                  
  allow time for committee questions.  Chair Bunde thanked her                 
  for the presentation and for her division's efforts at                       
  welfare reform.                                                              
                                                                               
  Responding to a question from CHAIR BUNDE, Ms. Hansen stated                 
  the current poverty level for a three-person household was                   
  $1,205 per month.                                                            
                                                                               
  CHAIR BUNDE mentioned Department of Health and Social                        
  Service Commissioner Ted Mala's proposal to inform all                       
  welfare applicants about the JOBS program, and expressed a                   
  desire to speak with Ms. Hansen about it in the future.                      
                                                                               
  Number 364                                                                   
                                                                               
  In response to a question from REP. BRICE, Ms. Hansen said                   
  there is no differences in AFDC benefits or poverty levels                   
  for geographic differences, though there are such allowances                 
  for food stamp allotments.                                                   
                                                                               
  MR. LIVEY explained that the poverty level for Alaska was                    
  set at a level 25 percent higher than in other states.                       
                                                                               
  MS. HANSEN, responding to a question from REP. BRICE, said                   
  the $950 monthly AFDC benefit level, representing 77 percent                 
  of the federal poverty level, was derived from the                           
  cumulative addition of COLA adjustments to the basic federal                 
  needs standard set in the early 1980s.                                       
                                                                               
  Number 403                                                                   
                                                                               
  REP. TOOHEY commended the division for the low error rate.                   
                                                                               
  Number 412                                                                   
                                                                               
  REP. IRENE NICHOLIA asked if the department considered the                   
  individual communities in setting needs levels, or set a                     
  statewide level.                                                             
                                                                               
  MS. HANSEN answered that she could not answer precisely, as                  
  records did not show how the needs levels were set.                          
  However, she said, social workers had usually set needs                      
  levels in the past, but not based on precise methods, and                    
  possibly based on legislative funding levels or historical                   
  rates.  She continued, saying that there are geographic                      
  differentials for food stamps and for some housing                           
  assistance and energy assistance programs.  Given those                      
  other allowances for geographic differences, it was not                      
  clear that it was necessary to include more allowances in                    
  AFDC benefits, Ms. Hansen said.                                              
                                                                               
  Number 441                                                                   
                                                                               
  In response to a question from REP. NICHOLIA, Ms. Hansen                     
  said approximately 20,600 children were receiving benefits                   
  through AFDC.                                                                
                                                                               
  (Rep. Jim Nordlund was recognized by Chair Bunde as being                    
  present in the audience.)                                                    
                                                                               
  REP. JIM NORDLUND asked whether the department planned to                    
  notify AFDC recipients about the impending reduction in                      
  welfare benefit rates planned to take effect July 1, the                     
  start of FY94.                                                               
                                                                               
  Number 470                                                                   
                                                                               
  MS. HANSEN responded that no, they had not, though they had                  
  started talking about the issue, which, along with making                    
  the actual program changes and reprogramming, must be done                   
  to effect the change.                                                        
                                                                               
  Number 476                                                                   
                                                                               
  MS. HANSEN answered a question from REP. OLBERG by saying                    
  the division will wait until January 1, 1994, to suspend the                 
  COLA adjustments to AFDC because that is when the                            
  adjustments will otherwise take effect.                                      
                                                                               
  Number 489                                                                   
                                                                               
  MS. HANSEN, responding to a question from REP. OLBERG,                       
  attributed much of the near doubling in the cost of AFDC                     
  from the expansion of the program to include the unemployed                  
  parent program, which will bring in an additional 2,000                      
  families in FY93 and 2,300 in FY94.  She further attributed                  
  it to the COLA adjustments and to the increased needs for                    
  the service due to increased unemployment and other factors.                 
                                                                               
  Number 500                                                                   
                                                                               
  Responding to a question from REP. PETE KOTT, Ms. Hansen                     
  said none of the benefit reductions she discussed would                      
  require waivers, but they would require a change in the                      
  state welfare plan and state regulations.                                    
                                                                               
  Number 525                                                                   
                                                                               
  MS. HANSEN, answering a question from REP. KOTT, said she                    
  believed there was a good chance federal laws would change                   
  to make waivers easier, and it would not be cost-effective                   
  to proceed with starting a waiver demonstration project at                   
  the same time it worked to ease the waiver process.  She                     
  referred to other information available on the waiver                        
  process, both information from the self-sufficiency study                    
  done by her staffer, Christina Klein, and a federal                          
  publication, "The Rush to Reform," on states' efforts to                     
  reform welfare, upon which she based her judgments.                          
                                                                               
  Number 537                                                                   
                                                                               
  REP. KOTT asked the reason behind the projected decrease in                  
  APA expenditures in FY94.                                                    
                                                                               
  MS. HANSEN answered that the decrease resulted from the                      
  suspension of COLA and the reductions in the welfare benefit                 
  rate, despite a projected 8.5 percent growth in the                          
  caseload.  Without the cuts, she said, APA FY94 costs would                  
  have risen $4.3 million over FY93 costs.                                     
                                                                               
  Number 554                                                                   
                                                                               
  REP. TOOHEY asked if the federal social supplement would                     
  increase to compensate for any reduction or loss of the                      
  longevity bonus.                                                             
                                                                               
  MS. HANSEN said no, the bonus was not now considered in                      
  setting aid levels, but without the $250 per month would                     
  still leave the maximum AFDC benefit for an adult over 65 at                 
  more than the poverty level.                                                 
                                                                               
  Number 574                                                                   
                                                                               
  REP. NORDLUND asked whether the department had considered                    
  the economic impact, especially in smaller rural communities                 
  with limited cash economies, of the reduction in welfare                     
  benefit rates and suspension of COLA planned to take effect                  
  July 1.                                                                      
                                                                               
  MS. HANSEN answered that the department had made no such                     
  analysis.  But, she noted, food stamps would increase by                     
  about one-third, somewhat mitigating the impact of the loss.                 
  She further noted that total AFDC outlay to Bush communities                 
  would rise along with the increasing caseloads, despite the                  
  benefit and COLA reductions.                                                 
                                                                               
  Number 598                                                                   
                                                                               
  REP. BRICE asked about any possible cuts in funding for job                  
  training, child care, and other programs that were related                   
  to APA benefits.                                                             
                                                                               
  MS. HANSEN answered that the federal Jobs Training                           
  Partnership Act, a significant element of federal job                        
  training, would see a budget cut in FY94, requiring a                        
  compensatory increase in state funding for such work.                        
                                                                               
  Number 616                                                                   
                                                                               
  REP. BUNDE asked about the possibility of waivers allowing                   
  children to work and save their money, possibly for                          
  education, without it reducing the family's welfare                          
  benefits.                                                                    
                                                                               
  MS. HANSEN said she would study the idea.                                    
                                                                               
  CHAIR BUNDE reminded the committee of a meeting on January                   
  26 in the regular HESS committee room, but a meeting on                      
  January 27 would once again be held in the House Resources                   
  committee room.  There being no other questions, he                          
  ADJOURNED the meeting at 4:25 p.m.                                           

Document Name Date/Time Subjects