MINUTES OF THE
ASSEMBLY COMMITTEE ON WAYS AND MEANS
Sixty-seventh Session
April 26, 1993
The Assembly Committee on Ways and Means was called to order by Chairman Morse Arberry, Jr., at 7:40 a.m., on Monday, April 26, 1993, in Room 352 of the Legislative Building, Carson City, Nevada. EXHIBIT A is the Meeting Agenda. EXHIBIT B is the Attendance Roster.
COMMITTEE MEMBERS PRESENT:
Mr. Morse Arberry, Jr., Chairman
Mr. Larry L. Spitler, Vice Chairman
Mrs. Vonne Chowning
Mr. Joseph E. Dini, Jr.
Mrs. Jan Evans
Ms. Christina R. Giunchigliani
Mr. Dean A. Heller
Mr. David E. Humke
Mr. John W. Marvel
Mr. Richard Perkins
Mr. Robert E. Price
Ms. Sandra Tiffany
Mrs. Myrna T. Williams
COMMITTEE MEMBERS ABSENT:
None
STAFF MEMBERS PRESENT:
Mark Stevens, Fiscal Analyst
Gary Ghiggeri, Deputy Fiscal Analyst
AB259Makes appropriation to legislative fund for portrait of Isaac Roop.
Mr. Dennis Myers provided a brief history surrounding Isaac Roop and the portrait project. He stated, in the 1850s, much of what is now Nevada was part of Carson County, areas around Genoa, Carson City, and the Honey Lake region, which at the time was thought to be in Utah Territory (though a later boundary survey showed it to be in California). The Carson County area was principally a ranching area -- the Comstock Lode had not yet been discovered.
Mr. Myers explained because the most settled regions of Carson County were so remote from the territorial capital of Salt Lake City, grievances against the territorial government over the adequacy of services such as law enforcement slowly grew. These were exacerbated when Carson County lost its representatives in the Utah territorial legislature. In addition, on September 26, 1857, a wagon train of about 450 of the leading residents left western Carson County to return to Salt Lake City. All of these factors led to a situation which historian Russell Elliott has described as a four-year period of "political chaos." Squatter meetings were held to try to give the area a new government. More ominously, a vigilante committee was formed in March 1858, and at least one person was put to death as a result of the vigilantes. He stated on September 7, 1859, settlers in the western Carson County region went to the polls and effectively seceded from the Territory of Utah, creating a new provisional territory in the process.
Mr. Myers stated Isaac Roop was elected governor of the new territory, a delegate to Congress was elected to petition for status as a new federal territory, a legislature was elected and three other executive officers were elected. He pointed out most of these officials were inactive for the duration of the provisional territory's life, but the congressional delegates and Governor Roop were not. The neighboring State of California dealt with Roop as a de facto governor. Roop slowly gave this region an identity separate from Utah and many people in California and Washington began to recognize the provisional territorial areas. Mr. Roop laid the groundwork for the creation of the new State of Nevada which followed the mineral discoveries of 1859.
Mr. Myers indicated, unfortunately for Isaac Roop, the success of his leadership of the drive for creation of a new territory also spelled the end of his role in that territory. After Congress created the new Territory of Nevada, Roop was elected to the upper house of the Nevada territorial legislature, the Council, but after the boundary survey showed clearly the Honey Lake region was actually in California, his Nevada years came to an end. A small uprising known as the Roop County War did not change that outcome.
Mr. Myers explained AB259 had a history of its own. It was first drafted for the 1975 legislature by Assemblyman Steve Coulter at Mr. Myer's request. However, due to bill-drafting problems, the BDR came out too late to be considered. In 1975, a Lassen County Historical Society staff member in Susanville, California heard about the bill and requested a copy. He noted Governor Roop was a founder of Susanville which was named for his daughter. Mr. Myers provided the staff member with a copy and was found in their files by Ms. Janet Corey last year.
Ms. Corey took the portrait project up anew and had brought it along over the ensuing months. Mr. Myers stated the current bill, in addition to giving legislative consent to the project, contained two clauses which should be addressed. First, the legislative appropriation may never be needed because of the fund raising drive launched by Ms. Corey. He emphasized the appropriation would be used only if the fund raising did not produce all the needed funds and any funds not utilized would revert to the general fund. Secondly, as a result of the clause regarding portrait manner, style and size, and approved by the Legislative Commission prior to hanging, adequate funding should be available to assure the portrait meets the stated criteria and is not rejected like some other Governor's portraits in the past.
Mr. Myers emphasized, in the years since Governor Roop's departure from Nevada public life, Nevada has done little to honor him. His contemporaries named a Nevada county for him, but it was the northern portion of Washoe County and was later eliminated for lack of population. Thereafter, the principal recognition given to Roop from Nevadans came from the people of Carson City, where one of the main streets through town is named Roop Street.
Mr. Myers concluded Isaac Roop was the leading founding father of Nevada, the Silver State's George Washington, and he deserves better recognition from the state he did so much to create.
Mr. Brandon Swain, a 15 year old from Isaac Roop Preparatory School, asked, since Isaac Roop was a leader of a group of ranch towns a long time ago, why should we remember and honor him today? He explained during the 1850's, many people in what was then Western Utah tried to organize a government for the area that is now the State of Nevada. In 1859, Isaac Roop and a group of miners, ranchers and community leaders organized the government for the Provisional Territory of Nevada. They drafted a Constitution and submitted it to a vote of the people on September 7, 1859 when a number of other officers and Roop as Provisional Governor were elected.
Mr. Swain pointed out Roop's provisional government and the representative it sent to Washington showed the Federal Government the people of Nevada were serious about self-government and eventual statehood. Roop's government provided a foundation for the Territory and state that would later follow. Later it was found Roop's hometown was not within the Nevada boundaries, but he had the interest of Nevada at heart. He is an example of Nevada's pioneer spirit and an inspiration for Nevadan children and adults alike.
Mr. Swain emphasized Governor Roop was a statesman, a Western legend and a popular hero and deserved the honor of a portrait among Nevada's governors. He urged the committee to pass AB259 which would commission a portrait of Provisional Governor Isaac Roop.
Mr. Myers submitted a copy of a photo of Isaac Roop which will be what the portrait will be based on (see EXHIBIT C). He expressed his thanks to Ms. Corey for reviving this worthwhile project.
Chairman Arberry asked if the appropriation would be needed if fundraising was ongoing. Mr. Myers indicated the appropriation would be utilized to supplement the fund raising monies to assure quality control and to meet the portrait requirements. He emphasized the portrait must be the type and quality to hang in the capitol building and the goal is to make sure the project does not fail because of the lack of funds. If the appropriation is not utilized, it will revert to the general fund.
Chairman Arberry asked what the financial goal of the fund raising efforts would be and how much has already been raised. Ms. Janet Corey, President of the Lassen County Historical Society, stated the society is very proud and pleased to offer to the State of Nevada a portrait of the state's Provisional Territorial Governor, Isaac Newton Roop. She explained several years ago when she became president of the society, many oldtimers told her Nevada does not recognize Roop as the Provisional Governor because there was no portrait in the Nevada State Capitol. After a little research, she stated she found Nevada does recognize Mr. Roop and, when searching through files at the Nevada Historical Society, she found a copy of the 1975 bill proposing a portrait of Roop. She explained there was a note on the bill indicating it had not been introduced because of lack of time in the session. She exclaimed she knew there was hope for the project and she began inquiring with Nevada officials. Upon reaching Mr. Terry Sullivan, she was given permission to hang a suitable portrait of Governor Roop in the Capitol Building.
Ms. Corey explained in Susanville, California, formerly Susanville, Nevada Territory, the Society began working on fund raisers, such as soliciting donations, putting on plays and selling Isaac Roop buttons. The Society is currently half way to the goal of $1,000. She testified the Society intends to hang the portrait in March 1994. The project has the blessing and encouragement of the Lassen County School where the children study local and state history including units on Isaac Roop and Lassen County plus a fieldtrip to Roop's Fort in Susanville. She pointed out California history involves the formation of both states: California and Nevada.
Ms. Corey stated Mr. Ben Barker, a painting and arts teacher at Lassen County Community College in Susanville, is painting the portrait. He has previously painted Isaac Roop and Roop's daughter, Susan, in a mural in Susanville. She indicated Mr. Austin Minerch will create a frame to surround the portrait. He is a craftsman who works in wood. She emphasized both men are enthusiastic about the project, have visited the Governors' Portrait gallery at the Capitol Building and know what style and quality of work is necessary. Further, they are grateful to be a part of the project to honor Governor Roop. The two artists have agreed to do the project for nearly nothing at $500 each. She expressed the desire that the funds cover the cost of materials even though it would not cover the artists' time or talent.
Ms. Corey recommended the placement of Governor Roop's portrait be directly across the hall from Governor Nye's portrait. She urged the committee to complete the process recognizing the Honorable Governor Isaac Roop. It has been about 134 years and is long overdue. She introduced to the committee Mrs. Zelda Mae Miles, the granddaughter of Isaac Roop. Ms. Corey stated she has pictures of Ben Barker's work and his resume if the committee would like to see them.
Mr. Terry Sullivan, Director of the Department of General Services, pointed out the administration supports hanging Isaac Roop's portrait in the Capitol and stated anything the Legislature can do to support Ms. Corey's request and AB259 would be appreciated.
Mr. Guy Rocha, State Archivist, provided the committee with a copy of Mr. Roop's obituary indicating his status as Governor of Nevada (see EXHIBIT F), a list of holding in the State Archives relating to Governor Roop (see EXHIBIT G), and a petition which relates to the boundary dispute of 1863 which includes an original signature of Governor Roop (see EXHIBIT H).
Ms. Michelle Bero, Nevada Association of Counties, pointed out the teachers and classmates from the elementary school which she had attended. She urged the committee's support of AB259. She stated she grew up in Susanville and most of the TV stations and news were from Reno. She emphasized if the ballot measure in California had not failed, NACO would have 18 members which would have included Lassen County, Nevada also.
Chairman Arberry requested everyone in the audience who did not testify to stand up and be recognized for their support of the proposed legislation.
Mr. Price thanked everyone who came from Susanville to support AB259. He indicated he had Nevada pins for the students and noted the committee members would like to get some Isaac Roop buttons also.
AB72 Makes appropriation to Nevada Appellate and Postconviction Project, Inc.
Mr. Michael Pescetta, Executive Director of the Nevada Appellate and Postconviction Project (NAPP), provided the committee with a report on NAPP's first year of activity. (Report is on file in the Fiscal Division of the Legislative Counsel Bureau for five years.) This report was prepared for the Nevada State Federal Judicial Council and includes a narrative description of activities. He noted a number of letters have been submitted in support of NAPP (see EXHIBIT I).
Mr. Pescetta explained NAPP is a state and federal resource center and receives seed grant monies from the Administrative Officer of the United States Courts as one of the 18 death penalty resource centers around the U.S. He pointed out NAPP receives more federal funds than were provided by the legislative appropriation last year. As a condition of the federal grant, non-federal funds must also be received and the legislature is the only source of the additional funding at this time. He stated, included in the NAPP report on file at the Fiscal Division are agendas and the resource manual from the seminars provided for Capital Cases Attorneys.
Mr. Pescetta addressed the fiscal considerations. He stated there are 60 capital cases in conviction proceeding in Nevada. This is the highest per capita amount for any state nationwide. Nevada has the fewest number of defense lawyers who litigate capital cases. Forty cases are in trial or pretrial proceedings in the state which also is the highest per capita in the nation. He stated the function of NAPP as a resource center is to increase the efficiency and predictability of the litigation in the cases by acting as a resource for defense council.
Mr. Pescetta pointed out Nevada is unique because the state has no law school or publications in either criminal law or capital case law on which to rely for information. The resource center provides some of the support for the defense-side litigators. Capital cases have specific substantive and procedural juris-prudence which is complicated and unique. He noted over half of the 37 capital cases in-state post-conviction procedures have been returned from the federal courts as a result of procedural issues. He emphasized money is saved by getting the cases concluded accurately the first time and therefore, avoiding constant relitigation which adds to dramatic costs and delays.
Chairman Arberry asked what the status of Nevada Capital Cases are at this time. Mr. Pescetta noted page three of the NAPP report discusses where cases are currently, and pointed out Nevada has the highest per capita rate for the nation. There are no statistics available for state-by-state ratios, only per capita rates. He emphasized there are so few attorneys who have the expertise or willingness to handle these cases because of the amount of time required. He noted a goal of the project is to broaden the litigant pool. Chairman Arberry asked why there are no books or publications for Nevada. Mr. Pescetta stated Nevada has too small of a market for publications on Nevada law.
Chairman Arberry asked how much time attorneys generally spend on capital cases. Mr. Pescetta replied the statistics available are somewhat dated and are not Nevada statistics because none have been kept. In 1987 a study was done by the Spangion Berg Group on capital cases in Florida. The study indicated a lawyer could spend over 500 hours in the federal district court simply litigating the federal habeas corpus. Much of the time is spent on the learning curve for those lawyers who have not done this type of litigation before and he has to learn everything on his or her own. He indicated another goal of the NAPP is to put already competent litigators into the position where they will not have to learn everything about capital case litigation from the bottom.
Mr. Humke commented the NAPP report was quite thorough and inquired what the portion discusses the goal to reduce appeal time for death-row inmates. Mr. Pescetta stated it was hard to project in terms of time specifics because every case is unique and has its own time path as a result of different lawyers, courts and circumstances which are beyond the control of litigators. He indicated the major long-term effect of the project will be NAPP hopes to eliminate some of the litigation/appeal steps entirely. He reiterated a high number of the cases are referred back to the courts because of the federal courts returning them to exhaust appeal procedures. He pointed out if the state can exhaust these steps during the first round of litigation, time and money will be saved. He estimated if the federal courts do not have to return cases, two years can be saved in the process. Other cases have been held at various levels of the court system for up to two years and in these situations, NAPP and lawyers have no control over the resolution time.
Mr. Humke asked if the projected budget of $300,000 would be sufficient and noted the 1991 Legislature approved $200,000 for the project. Mr. Pescetta stated $300,000 would be enough for the biennium with increased federal government support and the current request. Mr. Humke inquired if the additional funds would be utilized for staff growth and if this amount would be consistent for future legislative requests. Mr. Pescetta replied NAPP hoped to maintain the $300,000 request unless there is a greater shift to federal funding. He noted the federal funding is confirmed for the next year, but then the reliability of funding is unknown. He emphasized adding one or two professional staff members would be desired, but no more would be necessary for a state the size of Nevada's.
Mr. Humke noted concern about the growth in staff. He pointed out the need to accommodate growth for the bar to handle the cases and growth in the quality of the litigators, but it does not necessarily translate into a growth in administrative staff. Mr. Pescetta emphasized it would not be a continuous growth, but the office is not yet at a stage of critical mass partly because he was the only lawyer in the project be until October 1992. He stated when one person must do all aspects of technical assistance at both the state and federal level there is a limited amount of attention to specific cases. He reiterated 60 cases is a lot for one lawyer to deal with adequately and there is a threshold where one lawyer can assist another without knowing the specifics in the case and this requires time. He explained with one additional attorney and a paralegal or investigator position, he believed NAPP would be able to take some of the burden of the federal proceedings which is a condition of the federal grant.
Chairman Arberry asked what the minimum funding amount would be to maintain the NAPP. Mr. Pescetto stated $200,000 would keep the project's head above water. Any less would create a problem because time would be devoted solely to the administrative work of the project and a majority of the NAPP report is devoted to things related to maintaining the requirements of the Administrative Office of the United States Courts. He emphasized he spends an inordinate amount of his and his assistant's time dealing with bureaucratic requirements imposed by the federal government. Adding a position would allow him to do the recruiting and direct face-to-face dealing himself which is critical.
Mrs. Evans asked if a budget for the biennium is included in the report. He stated they did not provide one and would try to compile a breakdown for the committee. He explained the problem which arose is the different fiscal years between the state and federal governments and until the federal government provided the exact amount NAPP would receive in October the projected budget would not be an accurate budget.
Mr. Humke voiced his concern about some of the funds which have not been expended at the rate anticipated. He asked if the unexpended funds could be used to lower the appropriation request. Mr. Pescetta indicated it could not because the 1991 legislation mandates the reserve fund be reverted to the general fund on June 30, 1993. Mr. Humke asked how much is left and it could be used if the reversion date was changed. Mr. Pescetta acknowledged changing the reversion date would be up to the committee and would be a matter of juggling funds. He indicated NAPP was in a bind because they can predict the return of about $5,000 to $10,000 in interest, but because the federal fiscal year ends on September 30, 1993 and the state's fiscal year ends June 30, 1993, the NAPP has had to reallocate the funds to expend state funds in the event state funding is not provided for FY94. Therefore, federal funds are in reserve for contingency if state funding is not approved.
Mr. Humke summarized it would be possible to revert some funds to the state if the reversion date were changed and, if the Legislative fiscal staff works with Mr. Pescetta's fiscal staff, a compromise could be worked out.
Ms. Laura FitzSimmons, representing the Nevada Trial Association of Nevada and the Nevada Attorneys for Criminal Justice, pointed out the letters included as EXHIBIT I are from the attorneys who represent the condemned. These lawyers are for the most part single practitioners in small firms and need the resource center because the resources are not available within the firms. She emphasized the type of research and factual information necessary for capital cases is specific to the area and the resource center is essential. A recent case she was working on required some specific information and, with one call to Mr. Pescetta, he was able to provide the citations and information in her hand in a short amount of time. She reiterated the resource center probably saved perhaps 40 to 80 hours of research time in that case alone which she would have otherwise charged to the state general fund. She commented on Mr. Pescetta's credentials and pointed out he is nationally renown and is a great resource for the State of Nevada. She encouraged the committee to support AB72.
Mr. James Jackson, State Public Defender, testified in support of AB72. He stated Mr. Pescetta's resource is added to the Public Defender's resources to provide better training. He noted the training session NAPP provided was outstanding and gave Mr. Jackson the opportunity to send 9 people to the seminar where funding would have only allowed perhaps one individual to go to an out-of-state seminar of this caliber. He emphasized the 900-page, two-volume resource book which all the Public Defenders have access to is irreplaceable information. He commented all the Public Defenders will now be death penalty certified along with the private bar which will be well qualified for these cases. Mr. Jackson urged the committee to support AB72.
Mr. David Sarnowski, Chief of the Criminal Justice Division of the Attorney General's Office, stated he was in support of AB72. He testified he has provided a letter from Attorney General Frankie Sue Del Pappa (see EXHIBIT J). He stated his division handles all federal habeas corpus cases, both capital and non-capital. He said 50 defendants are awaiting trials in which the state is planning to seek the death penalty. There are 58 inmates incarcerated under sentence of death. Two other inmates technically have won release from the death sentences through the federal habeas corpus process. He emphasized, therefore, 60 cases possibly, with those awaiting sentencing, could get by with funds allocated by general funds to the Attorney General's office. If all these sentences and convictions are sustained through the state court proceedings both direct appeal and in the post-conviction process, the Criminal Division will actively litigate every one of the 60 cases. He emphasized the district attorneys are primarily responsible for the state court litigation through at least the first two rounds. Mr. Sarnowski pointed out his office is not able to keep up with all the cases and the resource center provides an essential support. He noted a Capital Case Coordinator was authorized by the Legislature, but was never funded. He stated the letter from Ms. Del Pappa addresses this issue (see EXHIBIT J).
Mr. Sarnowski emphasized the additional training available through NAPP better prepares lawyers to litigate these cases. He pointed out the better attorneys can prosecute these cases, the less time will need to be devoted to re-trying the cases at the various levels of the court system.
Mr. Kevin Higgins, Senior Deputy from the Criminal Division of the Attorney General's office, stated he has over 20 capital cases, some which have been ongoing for close to 15 years, in addition to the regular functions and prosecutions throughout the state. He pointed out they do not have a Capital Case Coordinator and, as a result, he spends a majority of his time on the capital cases. He encouraged the committee to amend AB72 to fund the Federal Case Coordinator for $76,000 per year. He emphasized only three attorneys in the Attorney General's office handle these cases and if a Coordinator was available to be the in-house expert on such cases, the time savings could be increased.
Chairman Arberry closed the hearing on AB72.
AB276Revises provisions of state plan relating to aid to dependent children.
Assemblywoman Vivian Freeman, District 24, testified the 1991 Legislature, with the passage of ACR16 of the Sixty-sixth session, directed the Legislative Commission to conduct an interim study of the Welfare System in Nevada. She stated she was fortunate enough to be appointed Chairman of the Subcommittee and served with six other legislators. The report of the ACR16 Subcommittee's recommendations and findings are highlighted in LCB's Report Bulletin No. 93-21.
Ms. Freeman pointed out the recommendations are meritorious and will have a positive impact on the delivery of welfare services in Nevada and emphasized the recommendation to adopt "Fill the Gap" budgeting, in her opinion, is the most far reaching and noteworthy. She explained each legislative cycle, the Legislature is faced with attempting to address the needs of Nevada's poor by providing small increases in Aid to Dependent Children (ADC) benefits in an attempt to maintain pace with the cost of living. The Legislature's attempts, as positive as we try to make them, are driven by the availability of funding which many needs must compete for, and what the Legislature, in the final analysis, can afford to provide.
Ms. Freeman stressed "Fill the Gap" budgeting provides a unique option to monetarily assist ADC recipients and reinforce the positive attributes of working. "Fill the Gap" budgeting allows the ADC recipient to retain income without experiencing punitive reductions in their ADC grant payment and also sends a positive message and incentive to ADC recipients that work pays. "Fill the Gap" budgeting, in Ms. Freeman's opinion, is a mechanism which will allow the ADC recipient an opportunity to get back on their feet and wean themselves off the welfare rolls. She stated Mr. Steve Abba, who provided staff services to the ACR16 subcommittee, will provide the committee with a brief overview to explain "Fill the Gap" budgeting.
Mr. Steve Abba, LCB Program Analyst, testified AB276 represents one of the ACR16 Subcommittee's recommendations and proposes a state plan change to incorporate ADC, "Fill the Gap" (FTG) budgeting for earned income in the Nevada Welfare Division's grant determination and eligibility process. He stated FTG budgeting basically allows ADC recipients to retain earnings without the imposition of severe reductions in their ADC grant payment currently instituted via ADC budgeting rules and regulations.
Mr. Abba explained how ADC FTG budgeting works. He stated every state has an ADC standard of need and ADC maximum payment level which may be less than the established standard of need. Nevada's current standard of need for a three-person household is $620 while the maximum ADC grant payment for same household without public housing is $348 per month or $272 less than the established standard of need, and can set a lower ADC payment level. As in Nevada, most states have established an ADC payment level lower than the standard of need. He emphasized ADC budgeting in Nevada, as well as in most states, in its simplest form is determined by calculating the family's countable income which is gross income minus allowable deductions. The ADC payment is a difference between the payment level and the countable income. In most states like Nevada, countable income leads to a dollar-for-dollar reduction in the ADC grant payment. For example, if the ADC payment level is $348 and the family's countable income is $200, the ADC grant will be $148. In actual ADC budgeting, work incentive and child care expenses are factored into determining the ADC payment level.
Mr. Abba noted, in the FTG budgeting scenario, the family's grant may be the difference between the standard of need and the countable income, with the maximum grant being the payment level. For example, the standard of need if $620, the payment level is $348 and countable income is $200. The family would receive the difference between the standard of need and countable income up to the payment level. The family's grant would not begin to be reduced until countable income started to exceed $272 per month. As compared to the previous non-FTG scenario, where the family's maximum ADC grant payment would be $148, this family with FTG budgeting would receive an ADC payment of $348 plus retain the $200 in earnings since the total or combination of the two is less than the $620 standard of need. In this example, the disposable income available to the family without FTG is $348 compared to $548 with FTG. FTG budgeting can be applied in several different manners not exclusively using 100 percent of the need standard. AB276 allows for the retention of earned income up to 100 percent of the established need standard with no time limitations.
Mr. Abba indicated the ACR16 Subcommittee in researching the ADC FTG budgeting methodology determined there are both positive and negative benefits. He testified the primary positive features are its less punitive effects for those ADC recipients with countable income. FTG assures families will recoup a financial benefit for obtaining income and allows ADC recipients an opportunity to reach the established standard of need level with income retention without penalty, since the state is unable to afford to budget ADC payment levels at the established standard of need. He asserted this approach arguably provides a positive incentive for ADC recipients which has been one of the underlying themes in many state welfare reform proposals.
Mr. Abba testified the primary negative aspects to a FTG approach are additional ADC program costs which would be incurred since there are no savings in reduced ADC grant payments when a family receives income. Additionally, increased Medicaid costs will be experienced as the ADC recipient is able to remain on the welfare rolls longer. Representatives from the Welfare Division will be able to discuss with the committee the projected fiscal implications for FTG budgeting.
He pointed out, as indicated earlier, AB276 proposes to adopt ADC FTG budgeting for earned income only. Earned income represents earnings from wages from some form of employment. ADC recipients also receive other forms of income called unearned income which include child support payments, social security or unemployment benefits. The ACR16 subcommittee strongly supported the policy that ADC recipients who seek, obtain and retain employment should be rewarded by the benefits of FTG budgeting. In recognition of this policy stance, the ACR16 Subcommittee's recommendation for FTG addresses only those ADC recipients with earned income not ADC recipients with unearned income.
Mr. Abba explained, under federal rules, a state may not limit FTG budgeting to ADC recipients with earned income only. According to federal rules, ADC budgeting determinations on countable income both earned and unearned must be uniformly applied. Adoption of FTG for ADC recipients with earned income only will require a federal 1115 Waiver from the federal Administration for Children and Families. Currently, 1115 waivers must be cost neutral. FTG budgeting is not cost neutral.
He emphasized the ACR16 Subcommittee deliberated at length on how best to incorporate FTG budgeting for earned income into the current biennial budget process, realizing the issue of obtaining a federal waiver and demonstrating cost neutrality will be a troublesome issue. Although the ACR16 subcommittee was unable to address how best to develop an approach which would neutralize FTG budgeting costs, the subcommittee determined the FTG methodology is a meritorious public policy and deserves complete legislative consideration during the 1993 Legislative session.
Mr. Marvel asked if a time limitation on how long recipients can stay on the program was discussed. Mr. Abba replied no, but the programs can be designed with time limitations included. Mr. Marvel inquired how to get around the cost neutrality factor. Mr. Abba indicated the ACR16 Subcommittee had looked into certain issues such as grant reduction where the theoretical cost savings could be applied to the costs of an ACR FTG budgeting approach. The goal is to equal out the cost to savings. Mr. Marvel wondered if this would qualify the state for a waiver. Mr. Abba said the federal government would also have to approve the proposal for the waiver which would require a pilot test group. Mr. Marvel asked if the fiscal note attached was included in The Executive Budget. Mr. Abba responded it was not included.
Mr. Wendell Williams stated, as a member of the ACR16 Subcommittee as well as a current member of the standing committee on Human Services, and from a practical standpoint, he supports AB276. He testified basically from the premise of how and what welfare is about, it is not supposed to be a permanent state of being. FTG is one way to encourage people to move off the Welfare roles. He indicated in response to Mr. Marvel's concern over the fiscal impact, criteria should be investigated in regard to the people who can participate in this program and any applicable time limitation. He pointed out to remove any benefits or disallow people to go out and work for the money they are not getting for the things they really need, is discouraging people from going out into the workforce. Mr. Williams emphasized if the state is ever going to do anything long-range regarding welfare reform, this legislation is the type of move to make. He reiterated the Legislature needs to be as creative as possible and seriously consider legislation like this, because over the long run monies can be saved by removing people from Welfare roles opposed to providing a small amount of money which keeps them dependent on the system. He encouraged the committee to support AB276. He suggested the committee keep in mind the slow quarter goes a long way opposed to the fast nickel.
Mr. Frank Hawkins, North Las Vegas Councilman, testified about his support of AB276 and provided information on the Jobs Program in Las Vegas. He stated with three new casinos due to open, about 15,000 jobs will be available. The city has had commitments for 3,600 of those jobs for chronically unemployed persons in the low-income Las Vegas and Henderson areas. He provided some detailed information on the race composition, household composition, and educational attainment of West Las Vegas versus Las Vegas and Clark County as a whole. He gave some crime statistics and information on income, poverty and unemployment (see EXHIBITS K and L). He pointed out, as is well known, there is a direct correlation between the absence of a job or job training social program and prisons which have become one of the operative ways Nevada has chosen to deal with some of the socioeconomic problems.
Mr. Hawkins emphasized the issue raised at every meeting in West Las Vegas with residents is "the need for more jobs." The City Council has looked at the jobs program know as STEP (Specialized Training Employment Program) from a holistic approach. STEP addresses the need to increase employability skills of the chronic unemployed residents and provides rigorous counseling services and identification of specific actions to improve employability. The program includes life skills training, a GED program, on-the-job training, coordination of the existing employment and training resources and job referral services.
He stated Nevada Partners have committed $1 million and the Culinary Union has committed $1.8 million in private funds to make the project work. Locally, the city has worked with Welfare, Employment Security, Nevada Business Services, Housing Authority and the Community College to look at ways in which funds can be saved in the areas of intake, assessment, testing. An interchangeable form has been implemented to stop duplication of services which will save money in the future. He stated other components to job security for this population are: basic skills, self-esteem, building blocks, reading, writing, job skills, problem solving, budgetary skills, survival skills and transportation skills, to name a few.
Mr. Hawkins commented the Owen's District office has 5,124 ADC/ADC-UP and 11,358 food stamp cases. He emphasized with 3,600 individuals removed after one year would lift a tremendous drain on the welfare system. He projected an affect of about three-quarters of the ADC cases and one-third of those on food stamps. He pointed out through STEP the Housing Authority has committed to holding the rent at the current level with no rent rate increase. Another aspect is taking funds individuals earn through STEP and hold it in trust for one year to help them move from the housing projects and be self-sufficient.
Mr. Hawkins concluded he would like to have all the factions work together to prove STEP successful for the working poor. It is a transitional program, not a life long, generation failure like the current Welfare system. He stressed we can make the welfare system productive. It is a question of leadership and the citizens need the Legislature's help. The economic crisis of poverty and unemployment directly contribute to the violence; when people cannot eat or clothe their children, they will steal or kill to survive. This program can make a difference.
Mr. Hawkins reiterated his support of AB276 and stated he would help in anyway he could. He stated he would be providing more statistics and information for the committee through Mrs. Evans.
Ms. Tiffany asked if the 3,600 jobs are going to be prioritized for people with kids or not and would ADC families still require childcare and Medicaid benefits or would these be provided with the jobs. Mr. Hawkins replied Nevada Business Services have been chosen as the intake agency for the 3,600 jobs. He ensured the chronic and hard to serve population would be given preference and, in most instances the benefits would become effective six months after hiring. He emphasized people are willing to work, but do not know how. Therefore, there is a mentorship aspect to the jobs program and is holistic in approach.
Ms. Tiffany asked what he meant by the savings program. Mr. Hawkins indicated he was addressing the savings inherent in the FTG program if it is successful. The majority of the people in STEP will bring home $1,000 per month and a certain amount would be set aside as not countable against their state benefits to ensure some degree of partnership between the local and state programs. He emphasized Welfare as currently provided cripples people and it should be designed to help the working poor and not designed to encourage people to stay at home. He said Welfare provides more for people than having the person earn a living. This needs to be changed.
Ms. Giunchigliani asked how many people Nevada Business Services has placed, what their level of job skills are, and what the result of the grant has been. She inquired if she could submit some questions to have answered for the committee regarding performance of the NBS program. Mr. Hawkins pointed out the target date to begin actual placement is June 3, 1993, however NBS has taken over 400 applications to date.
Mrs. Williams asked if the $1,000 earned per month would be gross or net. Mr. Hawkins replied their take home pay would be $750 per month. Mrs. Williams voiced her concern that the salary is not actual dollars and with ADC recipients the grant is actual dollars, not net. She reiterated it is important to address specifically what these people will have to sacrifice especially in relation to their children. She stressed this program needs to predicate all financial conditions on the actual gross dollars.
Ms. Jan Gilbert, League of Women Voters of Nevada and the ADC Coalition, stated she would address many of the questions which have arisen regarding FTG programs in other states. She indicated Nevada is very different than the eleven states which have used FTG budgeting, because Nevada would need to apply for a waiver which none of the other states have done. She testified Nevada also plans to only allow recipients who are currently on ADC to participate in the FTG program or those who come on and remain for three months. Other states have not done this, but most of the states use both earned and unearned income in their calculations which increases the expenses and allows the states to avoid the waiver process.
Ms. Gilbert pointed out Nevada's size of the gap between grant level and the Standard of Need is greater than most states (see Chart 1 of EXHIBIT O). For example, for a family of three in Nevada, the Standard of Need is $670 and the grant is $348, so a gap of $344 exists. She pointed out the reason there is little data on the other eleven states is those states are not required by the federal government to do any record keeping as a result of not needing a waiver for their FTG proposals. Nevada will be required to get a waiver and keep records for five years in order to achieve the cost neutrality requirement to be explained by Mr. Jon Sasser in testimony on this bill.
Ms. Gilbert emphasized Mr. Griepentrog-Carlin stated the Welfare Division has contacted each state who currently allows some form of FTG and in eight of those states, no data was available. In the three states which responded, caseloads were up 22 percent in Kentucky, primarily because they had adopted FTG budgeting in order to get their Medicaid enrollment up because they receive more of a percentage from the federal government: 70 cents to the dollar as opposed to Nevada's 50 cents to the dollar. She commented Tennessee also had similar results for the same reason and both use the provider tax and would profit from this increase in the number of Medicaid recipients. She explained Michigan was the third state to respond to inquiries. The Welfare Division had previously testified that Michigan discontinued their program because it was very expensive to the state. Ms. Gilbert explained Michigan had indeed reported a savings of $40 million since terminating their program, but Nevada's Welfare Division failed to mention Michigan had lowered their grant levels by 17 percent at the same time. She stressed this is where the majority of Michigan's claimed savings came from and they had also implemented a less complicated version of FTG which does not require a waiver and allows recipients to keep more of their earnings.
Ms. Gilbert stated the Welfare Division, in their estimated cost of FTG, has assumed there will be behavioral change in how long ADC recipients are kept on the rolls. She explained Nevada currently has 142 cases per month going off ADC due to increased earnings. Welfare estimates that 53 cases will go off ADC with FTG and 89 will stay on the rolls indefinitely. Ms. Gilbert stressed information indicates that recipients will not stay on ADC any longer and definitely not forever. She stated chart 2 of EXHIBIT O shows the percent of caseloads on ADC over 24 months in the Western States. Chart 3 of EXHIBIT O shows the states which implemented FTG during the years for which we have data, dropped in length of time on ADC or remained constant. Georgia and Kentucky both had a drop of recipients staying on longer than 24 months in the western states. She emphasized if the Welfare Division's theory is correct, then there would have been a dramatic increase in the length of stay which is not the finding.
Ms. Gilbert testified a recent ADC population study in the State of Washington was conducted involving over 2,500 households over a five-year period (see Chart 4 of EXHIBIT O). The study showed welfare recipients who work in excess of 500 hours per year (an average of less than 10 hours per week) remain on welfare for about half the length of time of those who do not perform such work. These results indicated, regardless of education or age, these women who worked at least 10 hours per week stayed on public assistance for an average of 12 months. Those who worked less than 10 hours per week remained on assistance an average of 23 months. This data demonstrates another example of how work can shorten the time on ADC, not lengthen it as the Welfare Division has assumed in all their previous testimonies and fiscal estimates for FTG. Ms. Gilbert urged the committee to support AB276.
Ms. Joni Kaiser, Executive Director of the Committee to Aid Abused Women (CAAW), an organization for families, testified in support of AB276. She stated she has worked with victims of domestic violence since co-founding CAAW in 1977 and provided some statistics on the issues of families in poverty. She stated in 1989, 35 percent of the emergency shelter residents were employed full-time and six percent were employed part-time. There were 51 percent unemployed, one percent disabled and seven percent on public assistance. She pointed out by 1992 things had changed dramatically. She testified only 25 percent of their emergency shelter residents were employed full-time, none were employed part-time, 62 percent were unemployed, four percent were disabled and nine percent were on public assistance.
Ms. Kaiser explained this major shift away from employment in their target population inspired CAAW to open a seven-unit apartment complex for the purpose of transitional housing in 1991. Nevada victims of domestic violence leaving emergency shelters can now apply for this program which provides subsidized housing, child care and other supportive services. Families can reside in the housing for periods ranging from two months to two years.
She noted some critical aspects of social work are integrated in with the transitional housing, emergency shelter and other programming efforts. These include the aspects of access, affordability, incentives and empowerment. If these common-sense aspects are not included in the work CAAW does, the interventions will simply not be effective. She stressed the FTG proposal is a shining example of what needs to be implemented in Nevada. She noted it will stimulate and motivate women to become self-sufficient taxpayers and will make sense economically. Additionally, it will empower not only those on public assistance, but all Nevada citizens because it is common sense.
Mr. John Sasser, Nevada Legal Services, indicated he would address three questions: What will FTG cost, how will the waiver from the federal government be obtained and where will the funding for FTG come from. He stated the Welfare Division fiscal note now estimates cost at $3.17 million in state funds only for the biennium. The original fiscal note was for $12.5 million. It was reduced after two amendments limiting the program to current recipients only and to earned income only and through the various challenges to original assumptions.
Mr. Sasser maintained his main dispute with the Welfare Division has centered around its treatment of the 142 cases which currently leave the roles each month due to increased earnings. He indicated the Welfare Division originally assumed that all 142 would remain indefinitely after FTG and none would have returned under the present system. He pointed out the Welfare Division now concedes 53 recipients will lose eligibility under FTG, but the division continues to assert the remaining 89 will stay indefinitely. He discussed EXHIBIT P-A, column five, which shows how the Welfare Division has calculated the cost of the program and how the caseload growth is projected. He explained the division starts at 89 cases and adds 89 cases each month indefinitely to come up with the increased caseload. He stated on EXHIBIT P-B, he plotted the increase out in chart form. This shows the caseload going up consistently as a result of FTG which results in a dramatic cumulative effect. If this assumption were correct, caseloads would jump about 1,100 cases annually and Nevada's average stay on the roles would soon lead the nation, but, as Ms. Gilbert pointed out, this is not reflected in the other states which have adopted full FTG budgeting.
Mr. Sasser emphasized the package Welfare has put together ignores the reality of how the recipients behave. He cited EXHIBIT P-C which shows nearly 10,000 ADC cases are terminated annually in Nevada and increased earnings are the reason in only 2.1 percent of those cases. The logical explanation is these 89 monthly cases will eventually terminate for other reasons. He stated his remaining challenges to the Welfare Division's proposals are summarized in EXHIBIT P-D. He recognized the division agrees, in principal, with his first and last points, but to date has been unable to quantify them. Mr. Sasser elaborated his own rough estimates indicate the cost could be cut in half.
Mr. Sasser asserted with a capped budget, he did not blame the Welfare Division for being conservative, but emphasized the fiscal note is based on the Welfare Division's assumption that FTG will fail. He reiterated the purpose of FTG is to motivate recipients to work instead of sitting at home collecting the maximum grant. Each otherwise idle recipient who gets a job with countable income exceeding $322 a month will save the state money by reducing grants. He emphasized he could not guarantee FTG will not cost $3.17 million, but it should not.
Mr. Sasser cited EXHIBIT P-E, stating the Welfare Division survey demonstrates a sizable portion of ADC applicants are relatively job ready because 25 percent had jobs within the previous month, 40 percent within the last three months and over 60 percent had jobs within the past year. Nevada can offer the largest financial incentive "gap" between payment level and needs standards, than any FTG state in the U.S. Nevada's service economy offers more jobs with low threshold requirements. He stated 18 percent of Utah's ADC population now work compared to 4.6 percent of Nevada's and with proper orientation, marketing and assistance by the Welfare Division, Nevada can do better.
Mr. Sasser declared if the committee is still unconvinced Nevada can afford FTG, as a last resort, AB276 can be amended to further limit the program. Such as put a time limit of 18-24 months on the use of FTG or delay implementation to the second year of the biennium which, by the Welfare Division's figures, would cut costs by 53 percent.
Mr. Sasser discussed the waiver of federal regulations which AB276 would require. He stated Ms. Florence expresses concern since FTG may have some cost, we must package it with other changes in the ADC program which save money. Such as the limits and sanctions in the Governor's Welfare Reform Plan. He testified otherwise she fears the federal government in audits two and a half years from now will find the program was not "cost neutral" to the federal government and will refuse to pay its 50 cents on the dollar. He said Ms. Florence correctly portrays the traditional approach taken by most states under the Reagan/Bush policies. Mr. Sasser pointed out Nevada proposes something unique, however, which has never been addressed, i.e., can we do a cheaper version of FTG (current and earned) than the full blown version which we could do without a waiver. He asserted, by definition, Nevada's proposal is cheaper to the federal government than FTG without a waiver.
Mr. Sasser remarked he has talked to Howard Ralston of the U.S. Health and Human Services regarding the waiver process and he said the new administration is currently examining "cost neutrality" and informally indicated a more liberal approach is under consideration. Mr. Sasser said he explained Nevada's time pressures and suggested a letter to the acting secretary (see draft letter attached as EXHIBIT P-F) seeking clarification of options. Mr. Ralston indicated he hoped a response to the letter could be received by Nevada within a few weeks. Some options could include, by definition, finding FTG "cost neutral", pairing FTG with the Managed Care proposal the Welfare Division is already proposing, pairing it with changes in the jobs program or setting up a test case using full FTG and having 90 percent of the population with the more limited form. There are several ways the federal government may now interpret the cost neutrality policies which would not require the state to make direct changes and would save money in the ADC program. He stated there is reason to believe it will become necessary to package FTG with cuts. If this approach fails, it will be necessary to reach agreement or compromise later.
Mr. Sasser declared every rock needs to be overturned to find funding for FTG and especially emphasized the monies need to be found in sources outside the existing ADC budget. In the last four years the ADC budget has been drastically cut. If funding cannot be found, the Governor has proposed in his welfare reform package a series of grant reductions or sanctions which would generate $1.9 million in state dollars for the biennium. The Governor has proposed these funds be used to expand the JOBS to require women with children under the age of one now be mandated to participate. Mr. Sasser pointed out there is currently only room for one out of three people already mandated to participate and the Governor's new proposal would double the mandated amount.
Mr. Sasser suggested, if Welfare Reform passes or some compromise reached, the FTG is a better use of the money than to pour twice as many people onto an already stretched JOBS. He noted another option which has been discussed is a $10 cut across the board to ADC recipients would generate approximately $1.9 million in state funds. He remarked he would not like to see this done except as a last-ditch resort. Moreover, if this budget remains under a cap and caseloads continue to rise beyond expectations the little amount they already have will be desperately needed.
Mr. Sasser concluded FTG offers a new opportunity for virtually every ADC family to dramatically improve their standard of living and to take a first step toward independence. Even at $3.17 million, it is a bargain. He expressed his hope this information demonstrated the program is not only desirable, but doable. "Although it is complicated, if this committee has the will, we can find the way."
Mrs. Evans asked what type of interfacing is possible with Mr. Hawkins' program in Las Vegas. Mr. Sasser replied the two would fit together well. One of the primary aspects of Mr. Hawkins program is to provide a 12 month period of transition where ADC families can break free of the system after maintaining ADC eligibility with earning income. The problem is some recipients will have gross wages in excess of $1,000 and into qualify for FTG budgeting, they would need countable income under $670. Mr. Sasser emphasized for certain aspects of Mr. Hawkins program to work there would need to be an arrangement with the Housing Authority where part of person's check is directly deposited in a type of trust account to be put aside for housing in the future, either changes in Welfare regulations are necessary or a federal waiver obtained. He noted something would need to be worked out to retain eligibility for both ADC and the JOBS and child care would also need to be addressed.
Mrs. Evans commented Mr. Hawkins' program targets certain areas in Las Vegas and Mr. Sasser was discussing FTG for the whole state. She inquired how the two facets came together. Mr. Sasser stated, depending on if the money could be set aside for savings within current state rules and regulation, there will be no need under FTG to treat either area differently and it would apply statewide. If the savings cannot be done, a pilot project would need to be done for a limited area such as Las Vegas and a waiver would need to be applied for with the federal government.
Ms. Gail Parsons, Nevada PTA, provided an emergency resolution which was brought before the convention of the PTA delegates in March 1993 (see EXHIBIT Q). She testified it was passed unanimously by 250 delegates representing 30,000 members of Nevada PTA. She stated the Nevada PTA strongly supports AB276.
Mr. Minor Kelso, member of Senate Legislative Committee of American Association of Retired Persons (AARP), testified in favor of AB276. He stated the best case scenario saves the state money and the worst case scenario does the opposite. Perhaps, in between, lies the probable financial impact of the legislation. He emphasized the state's position is centered primarily on budget driven considerations. He noted the AARP believes the ultimate best interest of the state, regarding this program, would best be served by adoption of measures which look ahead to the year 2000 and beyond. By doing so one has to look beyond the immediate financial impact; one that centers on the impact of a child deprived of a minimally decent life today, resulting in a life devoid of hope and one in jeopardy of being the next generation on Welfare.
Mr. Kelso indicated the interim legislative committee did look ahead and the AARP has commended the committee for it. One of the recommendations is adoption of FTG legislation as an adjunct to the ADC program. He stressed Nevada's ADC program is one of the most meager in the nation. The gap between what is provided and what is needed to sustain the ADC family is alarming. He reiterated AARP urges the committee to offer the incentives of FTG legislation to the ADC mother. He pointed out they believe it offers the mother the incentive and opportunity to take control of her life and depart from the Welfare roles.
Paster Nollard Grum, Pastor of Holy Cross Lutheran Church in Reno and representative of the Lutheran Advocacy Ministry in Nevada, testified support for AB276. He stated the church has been particularly concerned about supporting issues which deal with children who are at risk. ADC stands for AID to DEPENDENT CHILDREN and, as such, is a needed program.
Ms. Holly Hillman, Pastor of the Methodist Church in Smith Valley and represents the Nevada United Methodist Alliance, testified they are deeply concerned about the need to improve the conditions for the children and the mothers on ADC. This is a wonderful change which would catapult people forward out of a very debilitating, discouraging and devastating time in their lives.
Ms. Bobbie Gang, Nevada's Women's Lobby, provided a card discussing families in poverty (see EXHIBIT R). She reminded the committee of the booklet discussed on March 8th to all legislators. One of the issues Nevada's Women Lobby highlighted in the booklet was Welfare Reform. She stated the most hypocritical aspect of ADC was the dollar-for-dollar reduction in ADC grant when recipients have earnings. While an updated version of Nevada's need standard would indicate that a family of three must have $672 per month plus food stamps to purchase necessities, the grant level is only $348. If the recipient through part-time work attempts to earn the difference, the $348 maximum grant is reduced dollar for dollar.
Ms. Gang asserted recipients should be able to earn money until their total income exceeds the need standard by utilizing FTG funding. She stated Nevada can do better with four items, one of which is pass the FTG legislation to encourage recipients to be self-supporting. She encouraged the committee to pass AB276.
Ms. Myla Florence, Administrator for the Nevada State Welfare Division, discussed the fiscal implications of FTG budgeting. She stated any change to federal rules or delivery of services require a waiver. She indicated the state must be able to demonstrate there is a savings to be achieved somewhere. She pointed out Mr. Sasser's options would need more waivers. She emphasized the Welfare Division contacted all eleven states and none could give a definitive answer on recipients transferring or exiting the roles. In fact, the Welfare Division's research did not find any discernable trend of state's seeing a decline in length of time on the roles. She emphasized this is not a capped budget. If a proposal such as this passes, unless there must be some assurance of hard savings, the caps should be lifted. The only other alternative would be reductions in grants to those people who may not ever obtain employment. This issue must be carefully considered by the committee.
Ms. Florence pointed out the characteristics of the population involved must be considered. In talking with other states, they indicated when FTG is coordinated with an aggressive jobs program, such Mr. Hawkins discussed, they have seen some results. She emphasized the experience with this type of collaboration has not been long enough to adequately determine if a long-term savings will be realized. She urged consideration of an enhanced and expanded jobs component to the Welfare Division in addition to FTG because much of the population are not ready to enter into the job market without education and skills training. She hypothesized failure to do this would result in only those people who would normally have gone out to get a job, to utilize the FTG proposal. Further, those individuals without skills would not participate or improve their situation.
Ms. Florence reviewed the fiscal note with the committee (see EXHIBIT P-A). She noted this does not take into account those recipients who would remain on Medicaid. She testified the original fiscal note was dramatically impacted by the amendments to AB276 which assumes only those individuals who have been on the rolls three months or longer would be eligible. Previously, anyone could be eligible and presumably someone with income. She reiterated there are certain issues will impact new costs to an already increasing caseload. The ADC caseload has experienced dramatic growth.
Ms. Florence indicated the division, when drafting the fiscal note, had assumed there would be a loss of budgetable income on existing cases because this will add another deduction to gross income and enable people to have earnings and stay on the Welfare rolls. The division will have recipients stay on the rolls longer. She reiterated, as indicated by the five-year trend data from the eleven states with FTG, there has been no discernable decline and current experience on terminating cases, the division believes less cases will terminate each month. She emphasized there will be an impact on the Medicaid budget where currently individuals are eligible for Medicaid for 12 months following employment. AB276 will enable recipients to stay on for longer than 12 months and will represent new costs to the program.
Ms. Florence enumerated additional costs to the division by virtue of implementing a waiver program, the division will be required to have a test and control group to track those individuals over a five-year period. This is a requirement of the waiver. AB276 will require data processing costs for implementing the program. She noted preliminary estimates from the Department of Data Processing is $247,000 is FY94 and $47,000 for changes to the program plus an additional $15,000 for FY95. She pointed out all waiver program requires an independent evaluation which is estimated at $20,000 per year. She stated the spreadsheet included by Mr. Sasser (see EXHIBIT P-A) is the same included in the fiscal note and shows ADC and Medicaid estimated costs. The overall program costs are $1.3 million for FY94 and $4.9 million for FY95.
Mr. Humke asked if Ms. Florence was familiar with Mr. Sasser's packet of information which he provided to the committee today. Ms. Florence said she was aware of it. Mr. Humke noted the Welfare Division's and Mr. Sasser's arguments regarding fiscal note are both tightly reasoned. Mr. Humke asked if the proposed draft of the letter to Washington regarding the waiver was feasible (see EXHIBIT P-F). Ms. Florence replied it could, but emphasized some of the scenarios being discussed indicate additional costs to the division. She said if the state can show it is less expensive to employ FTG on earned income versus an unearned/earned income program, the alternative is additional costs to the division. She concluded although the options in the letter may satisfy the federal requirement, she was not entirely sure it would satisfy the state's.
Mr. Humke asked if the letter is adequate and if any of the options Mr. Sasser has proposed would be workable and could scale down the fiscal note. Ms. Florence stated the current thinking in the Clinton administration is to let states employ innovative strategies to ultimately reduce Welfare dependency. She explained this shows federal office's interest in moving the waiver applications along quickly. The most workable option would be the time limitations which would save some money in terms of decreasing recipient's time on the rolls. She indicated she has not had sufficient time to review all of Mr. Sasser's options and testified her priority would be incorporating FTG with JOBS.
Mrs. Evans noted cases would remain on the rolls longer which would add to the costs and therefore time limiting the program would be a feasible option to limit costs. Regarding the additional data processing costs, in the division's budget for the biennium there is additional data processing costs and she inquired if the request would be above the budgeted amount. Ms. Florence responded it was more than the budget as a result of the Welfare Reform package. Mrs. Evans wondered if the independent evaluation costs was also additional. Ms. Florence indicated it was.
Mrs. Evans asked what type of dialogue has occurred with Mr. Hawkins and other Southern Nevada agencies to work out some type of demonstration project. The possibilities of interfacing with what is already being done needs to be addressed in conjunction with the Welfare Division program, especially in the targeted areas, in order to get FTG going. Ms. Florence reiterated the division has had discussions with Mr. Hawkins at the local district office level regarding simplified intake processes and prioritizing welfare recipients for the 3,600 jobs. She has also talked with Mr. Hawkins at the Governor's request to see how these programs may come together. She noted while no final details, the state could opt for a geographical demonstration project to the Las Vegas area along with other components of the Governor's Welfare Reform proposal. She explained, based on the division's survey of the population served by the Owens District office, if they are able to achieve results with that population then they are clearly impacting those people who would be long-term recipients of Welfare. She concluded there is some real possibility of collaboration.
Mrs. Evans requested Ms. Florence, Mr. Sasser and Mr. Hawkins work together to find the middle ground option between all their proposals to get FTG implemented in a cooperative manner.
Ms. Tiffany inquired if a collaboration is possible, would a waiver still be necessary. Ms. Florence stated a waiver is needed if a group were going to be treated differently. If the group would retain eligibility as well as earnings, then a waiver would be required. Cost savings must be demonstrated as part of any waiver. Ms. Florence emphasized the state must show the neutrality in conjunction with a like control group which is not benefitting from whatever programmatic change being made. She did not see this as problem for Clark County or any specific geographic area.
Ms. Giunchigliani commented the state was long overdue to removing the cap. She asked how it could be removed and allow greater flexibility. Ms. Florence indicated given the uncertainty of the financial impact of FTG, if it were not implemented in conjunction with some hard savings, the potential could be the cost would exceed the allocated budget and grant payments would need to be reduced if the cap remained. Ms. Giunchigliani asked if a cost impact had been explored if the cap were removed. Ms. Florence stated the fiscal note is the division's current projection. She emphasized it is difficult to envision all the possible variables which may be impacting a program such as this. She pointed out if California continues growing economically, it has a direct impact on Nevada. She noted the growth of the casino industry in Southern Nevada also impacts the Welfare Division's caseload because more people come for the jobs. Ms. Giunchigliani summarized the state could adopt true welfare reform by eliminating the caps and filling the gaps. Ms. Florence stated yes with some other factors. She noted currently there are 18 states who have initiated some form of FTG.
Vice Chairman Spitler closed the hearing on AB276.
Vice Chairman Spitler requested a committee introduction of BDR S-1754.
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MRS. EVANS MOVED TO INTRODUCE BDR S-1754.
MR. PRICE SECONDED THE MOTION.
THE MOTION CARRIED BY VOICE VOTE. MR. PERKINS WAS NOT PRESENT.
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Vice Chairman Spitler adjourned the hearing at 10:50 a.m.
RESPECTFULLY SUBMITTED:
_________________________
Kerin E. Putnam
Committee Secretary
??
Assembly Committee on Ways and Means
April 26, 1993
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