MINUTES OF THE

JOINT Subcommittee on Human Resources/K12

of the Senate Committee on Finance

AND THE Assembly Committee on Ways and Means

 

Seventy-second Session

March 4, 2003

 

 

The Joint Subcommittee on Human Resources/K12 of the Assembly Committee on Ways and Means and the Senate Committee on Finance was called to order by Chairman Sheila Leslie at 8:11 a.m. on Tuesday, March 4, 2003 in Room 3137 of the Legislative Building, Carson City, Nevada. Exhibit A is the Agenda. Exhibit B is the Attendance Roster. All exhibits are available and on file at the Research Library of the Legislative Counsel Bureau.

 

Assembly COMMITTEE MEMBERS PRESENT:

 

Ms. Sheila Leslie, Chairman

Mrs. Dawn Gibbons

Ms. Christina R. Giunchigliani

Mr. David E. Goldwater

Mr. Lynn C. Hettrick

 

Senate COMMITTEE MEMBERS PRESENT:

 

Senator Raymond D. Rawson, Chairman

Senator William J. Raggio

Senator Barbara K. Cegavske

Senator Bernice Mathews

 

STAFF MEMBERS PRESENT:

 

Gary L. Ghiggeri, Senate Fiscal Analyst

Mark W. Stevens, Assembly Fiscal Analyst

Steven J. Abba, Principal Deputy Fiscal Analyst

Pamela Carter, Committee Secretary

 

OTHERS PRESENT:

 

Nancy K. Ford, Administrator, Welfare Division, Department of Human Resources

Gary Stagliano, Deputy Administrator, Information Systems, Welfare Division, Department of Human Resources

Michael Capello, Director, Washoe County Department of Social Services

Jon L. Sasser, Lobbyist, Washoe Legal Services

Susan J. Meuschke, Lobbyist, Nevada Network Against Domestic Violence

Roger Mowbray, Deputy Administrator, Administrative Services, Welfare Division, Department of Human Resources

Jennifer Benedict, Social Work Student, University of Nevada Reno

Marlyn Scholl, Social Work Student, University of Nevada Reno

Patricia Macaluso, Social Work Intern, University of Nevada Reno

Melanie Walsh, Social Work Student, University of Nevada Reno

Brenda M. Carrera, Director, Nevada Empowered Women’s Project

Jan Gilbert, Lobbyist, Progressive Leadership Alliance of Nevada

Louise Bayard-de-Volo, Nevada Women’s Lobby

WELFARE DIVISION DEPARTMENT OF HUMAN RESOURCES – OVERVIEW  

 

Assemblywoman Leslie:

This morning we will be taking up the Welfare Division budgets.

 

Nancy K. Ford, Administrator, Welfare Division, Department of Human Resources:

We have provided committee members a spiral-bound handout we will use during our budget presentation, “Nevada State Welfare Division FY2003/2005 Budget” (Exhibit C. Original is on file in the Research Library.).

 

I would like to review some fundamentals contained in the “Overview” section of our handout on page 2. Nevada has been and continues to be the fastest growing state in the United States. The overall growth between April 1990 and July 2002 is 81 percent. Arizona, by contrast, is the second largest growth state with a rate of 49 percent. Since the inception of federal welfare reform in July 1995, Nevada’s population has grown by 37 percent.

 

Nevada has the distinction of being first in the country in several other areas. We have the fastest growing Temporary Assistance to Needy Families (TANF) caseload in the country. Between federal fiscal year (FY) 2001 and FY 2002 Nevada’s TANF average monthly caseload grew 47.54 percent. South Carolina was second with 22.2 percent. Nevada also has the distinction of being number one in caseload growth in food stamps. For federal FY 2001 to FY 2002 Nevada’s average food stamp caseload grew 36.3 percent. Arizona was second with 33.42 percent.

 

I tried to find recent figures on Medicaid caseload growth. The most recent I could find was between December 2000 and December 2001. During that period, Nevada ranked third in the country with a 23.9 percent caseload growth. In calendar year 2002, however, our Medicaid caseload grew an additional 14.65 percent. This represents 20,788 more people per month in January 2002 than in January 2003.

 

The handout at page 2 lists other facts demonstrating how Nevada ranks among other states. We are forty-fourth in average monthly TANF dollars. We are forty‑ninth in welfare spending per capita. We are forty-ninth in welfare spending as a percentage of general spending. We are forty-ninth in the average monthly number of food stamps recipients as a percent of population. We are forty-ninth in Medicaid recipients as a percentage of poverty population. Finally, we are last in per capita Medicaid spending.

 

There are new figures available to measure poverty, not just in terms of income, but also in terms of assets. Nevada is forty-eighth lowest in the number of households with zero net worth. Twenty-two percent of the Nevada households have zero net worth. Nevada is forty-sixth lowest for asset poverty; the State received a grade of “F” from the corporation that produced the study. Nevada is thirty-fifth lowest in the proportion of households that cannot subsist at the poverty level for 3 months. Generally, it is said that a household should have reserves equivalent to 3 months of income for emergencies. Nevada is thirty‑fifth lowest in the number of households that can subsist at the poverty level for 3 months.

 

This concludes the general overview before moving on to budget issues.

 

Assemblywoman Leslie:

You might want to correct the Medicaid statistic. We were told recently that Nevada was fifty-first in Medicaid spending per capita when the District of Columbia was included.

 

Ms. Ford:

The District of Columbia must not have been included in the rankings across America. Nevada, however, is dead last.

 

Assemblywoman Leslie:

Are we ready to address the welfare administration budget?

 

HR, Welfare Administration – Budget Page WELFARE-1 (Volume 2)

Budget Account 101-3228

 

HR, Welfare Field Services – Budget Page WELFARE-11 (Volume 2)

Budget Account 101-3233

 

HR, Welfare/TANF – Budget Page WELFARE-20 (Volume 2)

Budget Account 101-3230

 

We have an overall issue involving welfare administration, field services, and TANF because of the problems of overspending the TANF block grant. The TANF block grant does not stand alone in budget account (B/A) 101-3230; TANF funds are included in the other two budget accounts as well.

 

When we address B/A 101-3230, we will address the reconciliation in detail. However, I want to alert you to the overall problem at the outset.

 

I do not know if there are questions about the base budget.

 

Assemblywoman Leslie:

The major question in this account is the 278 new positions shared by this account and the field services account, B/A 101-3233. I understand there are 22 new positions in the welfare administration account because we got rid of the Health Insurance Portability and Accountability Act of 1997 (HIPAA) position. Is that correct?

 

Ms. Ford:

That is correct.

 

Assemblywoman Leslie:

I believe you have prioritized those positions as we asked you to do. The committee has that information. Do you want to comment?

 

Ms. Ford:

You will see our prioritization of positions at the handout tab “Welfare Administration.” The table entries include the position title, the start date, and the consequences associated with the position not being funded. Some of this information is additional to that requested.

 

Assemblywoman Leslie:

Would you talk about these administration positions in relation to the new positions? How will they provide support? It seems some of the requested positions might be better characterized as enhancement positions. Are they really necessary because of the huge staff request in the field service budget? How do the positions relate?

 

Ms. Ford:

The positions are necessary for several reasons. Some positions, such as the quality control specialists, can be quantified by caseload growth. Those specialists have to do sampling and case reviews. When there is caseload growth, there is an increase in sampling. We need additional staff to do the quality control.

 

Some positions, such as personnel positions, are tied to the expansion of staffing. If you look at the justification for the personnel technician, you will notice we are severely understaffed in personnel technicians compared to other, comparable agencies. For example, the Department of Motor Vehicles (DMV) has 1,042 employees and has 10.5 employees working in personnel. The Department of Employment, Training and Rehabilitation (DETR) has 839.5 employees and 9 employees working in personnel. The Welfare Division has 1,026 employees and only 6 employees working in personnel. Even without any increase in staffing, we are severely understaffed in the personnel arena.

 

The information systems positions are also tied to staffing. When staff is increased, computers are increased as is what is on the desktop. Mainframe access is increased as are many other things. We need to have computer network support and information systems support to keep our systems running. If those systems break down in any way, the ability of our field offices to provide services is compromised. This, ultimately, affects client service. It is very important we have adequate staff to deal with our deployed computer systems.

 

Assemblywoman Leslie:

Let me stop you there for a question from Senator Rawson.

 

Senator Rawson:

Is this the budget, B/A 101-3228, Welfare Administration, from which the Nevada Operations Multi-Automated Data Systems (NOMADS) is administered?

 

Ms. Ford:

Yes, it is.

 

Senator Rawson:

I need to get a feel for this. We have 40 or 50 programmers in this program. That work should taper off at some point. I think there is a request for new positions. Tell me what is going on.

Ms. Ford:

We have undertaken several initiatives involving NOMADS. We are moving into a more server-based environment, essentially a LAN/WAN environment, composed of local- and wide-area networks. We want to continue certain projects in order to remain current with technological advancements. We have provided information on those projects to the committee through Mr. Abba. Those projects require programming efforts. In addition, we have programming efforts that are continuing. For example, if we want to change eligibility requirements, a programming effort to change NOMADS is required. There are lots of continuing programming efforts.

 

Senator Rawson:

I understand that NOMADS is a huge system and needs people to maintain it. However, we have enough people now to develop a program, and the program is basically developed. We need to refine and change the program, but the department doing that is still huge.

 

Ms. Ford:

Yes, it is. We are continuing to refine and change it. During the last biennium, we built two new computer systems. We built the Open Access Same-time Information System (OASIS) and the Low Income Housing Energy Assistance (LIHEA) system. The existing staff maintains both systems. We are not asking for additional staff to deal with those systems.

 

Senator Rawson:

I may have read this somewhere. Are you looking for 17 programmer positions this session?

 

Ms. Ford:

No, we are not.

 

Senator Rawson:

My concern is that there is no need for 17 new programmers.

 

Ms. Ford:

In fact, in enhancement unit E-600 in this budget account, we are cutting in this area to achieve our 3 percent budget cut. We will be letting six or seven contractors go. They also support these systems. We are doing that to make our 3 percent cut.

 

Senator Rawson:

We had a hearing yesterday involving the Department of Human Resources. We discussed presumptive eligibility. I think there is a fiscal note for about $100,000 of NOMADS changes involved. Is that something that can be absorbed by the changes you are proposing, or does that money have to be in addition to what you propose.

 

Ms. Ford:

That would have to be in addition because it costs about $100,000 per “aid code” to add to NOMADS. That cost would be in addition to any costs health care/financing might have.

 

Assemblywoman Leslie:

Thank you. I would like to follow up. Are the 17 positions related to the master services agreement (MSA) contractors? They are not remaining, are they? How are you going to use those people? I thought they were providing assistance at the beginning of the NOMADS program. Is there really a need to continue with those 17 contract programmers?

 

Ms. Ford:

I believe there is, but I invite Mr. Stagliano to respond.

 

Gary Stagliano, Deputy Administrator, Information Systems, Welfare Division, Department of Human Resources:

We do have 17 contractor personnel supporting the NOMADS application. They augment a Department of Information Technology (DoIT) workforce. They have specialty skills unavailable through the State’s DoIT staff. Those people also absorb many of the maintenance and operational responsibilities associated with new system development. As we continue to develop those platforms, they will continue to absorb more and more responsibilities. That is being done without a request for additional staff to support new systems. Those people are staying.

 

However, as part of our 3-percent reduction, we will probably have to let some of that staff go.

 

Assemblywoman Leslie:

Will we reach a point in future biennia where we can get rid of those 17 contractor personnel, or will we have them forever?

 

Mr. Stagliano:

The reality is NOMADS is a huge operation. There are a number of federal and State changes constantly occurring. There are also a number on enhancements we try to implement.

 

Assemblywoman Leslie:

Will they be there forever?

 

Mr. Stagliano:

I suggest there is a compromise in this cause and effect situation. Reducing the support means reducing system performance. There is a ripple effect across information technology (IT) systems.

 

Senator Rawson:

Let us pursue a discussion on positions. I think you have requested 22 positions in total. They are spread over personnel, information systems, and so on. I understand thin personnel staffing, but it does not appear to me to be caseload driven. Increases or decreases in caseloads do not necessarily affect personnel. As we look at the problem before us, we know we will have to raise revenue this session. We also know we have to take a hard look at budgets to streamline wherever we can. We have never used a ratio of central office to field office staff in other areas. What do you really need here? What are some areas we might be able to trim? What are the personnel areas that you must have?

 

Ms. Ford:

We need all of these positions. The ratio I mentioned was simply another indicator. Central office functions are closely tied to the field. I did not mention the program policy people who have to get policies out to the field and have to conduct training.

 

Senator Rawson:

Let me put this differently. I know you have come forward with a budget. You have to defend it. We do not know yet whether we will be able to raise the revenue on which the Governor has built the budget. If it comes to a point where we cannot raise the revenue, then we can trim the budget, or you can prioritize it. We are asking for your best judgments of what you have to have.

 

Ms. Ford:

That is why we prioritized the information in our handout. This is also tied to maintenance decision unit M-200 in B/A 101-3233. That account has a large increase in field staff. We provide direct, hands-on support to the field. There are many impacts on central office staff. For example, caseload increases means the numbers of checks processed increases. We need all these positions.

 

Senator Rawson:

Historically, we have had larger caseloads and a larger Food Stamp Program than we do now.

 

Ms. Ford:

If you go to the “Field Services” tab in the handout, you will see the food stamp participants per 1,000 population figures on page 2. We are at an all time high with regard to recipients of food stamps. The per capita figure is not at an all time high, but the absolute numbers are at an all time high.

 

Senator Rawson:

What is the Medicaid situation?

 

Ms. Ford:

The Medicaid recipient numbers are on the next page, page 3 of Exhibit C. Medicaid recipients are at an all time high on both a per capita and absolute basis.

 

Assemblywoman Leslie:

I know we will get into these issues in the next budget account we focus on. However, I would like to echo Senator Rawson’s concerns. We do not know where we are yet. We appreciate you do not know either. I appreciate you providing us with your priority list. We will use it when we get to the end and see where we are on revenue issues. Some of the positions appear to have duplicative responsibilities. Our staff may have questions to work through with you on these particular positions. In decision unit 710, the committee needs an up to date schedule of the equipment to be replaced. Could you provide that to our staff?

 

Ms. Ford:

We will certainly provide that information.

 

Assemblywoman Giunchigliani:

Returning to personnel issues, you referenced an inter-agency comparison in your introduction. What other agencies are heavier in their internal personnel?

 

Ms. Ford:

Several agencies are heavier. The DMV has 10.5 personnel employees currently for 1,042 total employees. The DETR has 9 personnel employees with 839.5 employees. The Welfare Division has 1,026 employees currently.

 

Assemblywoman Giunchigliani:

Do you have four personnel employees now?

 

Ms. Ford:

We currently have six personnel employees. There are other agency comparisons.

 

Assemblywoman Giunchigliani:

That gives me an idea. I think you have done a good job with what you have, but we are looking for areas where employees can be cut or, at least, not increased. Maybe we need to look at those budgets and decrease them accordingly. I do not know what an appropriate staff ratio is; this is a new discussion for me. We probably should take a look at this. There probably is an appropriate number of support personnel for so many field personnel.

 

Assemblywoman Leslie:

You know the budget situation is bad when the Democrats have sharp pencils.

 

Before we leave staffing issues, I have one more question. Can you get back to us with input tying staff in this account to caseload growth? I am looking for a direct relationship. Could you tell us which staff requests relate to other items? Perhaps you get to a certain level and need more computer people. Do you understand what I want? It would help if you could help us see this more clearly.

 

Ms. Ford:

I will be happy to do that.

 

Assemblywoman Leslie:

Let us turn to focus on B/A 101-3233, Welfare Field Services.

 

Ms. Ford:

Recall that this budget account entails the overarching issue of the TANF block grant. If there are no questions about the base, we can jump directly to the M‑200 issues.

 

Assemblywoman Leslie:

I think we can go right to M-200.

 

M-200 Demographics/Caseload Changes – Page WELFARE-13

 

M-202 Demographics/Caseload Changes – Page WELFARE-13

 

E-600 Budget Reductions – Page WELFARE-17

 

Ms. Ford:

We really need to consider decision units M-200, M-202, and enhancement unit E-600 together because each has to do with staffing. Unit M-200 contains the new positions we are requesting. Unit M-202 involves the 84.5 positions approved by the Interim Finance Committee (IFC) in April, 2002. Unit E-600 involves 29.5 positions of the 84.5 positions we left vacant to meet the 3 percent General Fund savings.

 

There is no TANF component in M-200 because of the block grant issue we will talk about later.

 

If you turn to the “Field Services” tab in the booklet, you will see that page 1 depicts the TANF recipients per thousand of the Nevada population. You can see the caseload growth. The numbers in the blue boxes are the numbers of recipients per thousand population. The top number in the black box is the average monthly recipient load. The middle number is the percentage increase from the prior year for the average monthly recipient load. The bottom number is the actual increase in the number of recipients, averaged monthly, year-over-year.

 

Page 2 of the “Field Services” tab deals with food stamps. We briefly mentioned that before. Nevada is at an all time high for recipients, although not at a high on a per capita basis.

 

Page 3 of the “Field Services” tab deals with Medicaid. We are at an all time high on both a recipient and per capita basis.

 

Page 4 is what we refer to as our “mountain chart.” This chart shows the impact of historical events on the TANF caseload. Our high point was March 1995 with a caseload of 42,000. Our low point was March 2000 with a caseload of about 15,000. When the impact of September 11, 2002, hit, our caseload just took off.

 

Page 5 depicts our “stacked” caseload. The TANF caseload is the little blue piece. Food stamp caseload is represented by the pink piece. Medicaid is the yellow piece. The point of this chart is that TANF is not driving our caseload need. Food stamp and Medicaid caseload increases are driving our caseload needs. When you hear about the 4 percent drop in TANF in January, realize that it has a very minor impact on the overall caseload. I want to show you this chart to demonstrate visually how TANF is but a small a piece of what we deal with overall.

 

Page 6 contains charts showing recipients over time for TANF, Medicaid, and food stamps. You can see how the numbers of recipients have grown over time. You can also see the average monthly totals. This is helpful in understanding the issues and problems we face.

 

You may recall a chart depicting our need for overall staff, presented in a previous meeting in our agency overview. It was quite convoluted and hard to read. We broke down the information that chart contained so we could demonstrate, step by step, how we developed the numbers supporting the caseload need in field services. If you look at page 7 of the “Field Services” tab, you will see that we start from our October 2002 figures because that is the base for the Governor’s recommended budget. We will be rerunning all the figures at the end of this month based on new budget projections. As a consequence, all of these figures will change somewhat at the end of the month.

 

We then have to determine the workload to caseload ratio. Our cases involve TANF, food stamps, and Medicaid. They are not all stand-alone cases. Although there are TANF, food stamps, and Medicaid categories, they have to be combined. The ratio of the number of actual case jackets on a worker’s desk is at 79.15 percent. When you multiply that by the actual number of cases, you come up with 95,956 average workload jackets on a worker’s desk across the State.

 

When you apply the workload ratio to the caseload projections from Step 1, you come up with the workload increase in each year in Step 3 and the percentage increase in Step 4. So, for example, the workload increase in FY 2003 over FY 2002 would be 112.18 percent since the 95,956 in FY 2002 is the base.

 

The next step, depicted on page 8 of the booklet tab “Field Services”, is to break down the workload into the different categories of eligibility certification specialist (ECS). These people work different types of cases. In the larger offices, these personnel might be more specialized than in our smaller offices. Applying the factor, the workload increases over time are shown for FY 2003, FY 2004, and FY 2005.

 

Then, you calculate the staffing need for each type of ECS for the caseworker in Step 6. You can see the guideline, not a “standard” as shown on the chart but a “guideline”, which indicates to us when we need to ramp up or ramp down our staffing. Applying that to the workload yields the number of positions justified for each fiscal year.

 

Step 7 involves a similar, but less complicated, process for employment and training specialists and for social workers. That process uses the same factor applied to the ECS in order to determine increases in workload. Starting with the base workload of FY 2002, we move forward. Then the staffing need is calculated based on the guideline for employment and training specialists and for social workers to determine the number of needed positions.

 

Step 9 is a comparison of the calculated results with our current staffing levels. You can see in FY 2002 we had 496 eligibility certification specialists, 32 social workers, and 41 employment and training specialists. The process justifies 496 ECS positions; so our need, at that point, is 85 additional ECS personnel, 5 social workers, and 35 employment and training specialists.

 

In FY 2003, the authorized numbers increase due to the 84.5 positions approved by the IFC last April, minus the 29.5 frozen positions. The numbers in the chart depict the actual positions that came on line. The chart depicts the positions that are justified and the number of positions that are needed.

 

Then we adjusted the M-200 request for new workers based on the resource constraints of our offices, our training, and what we believe we can actually handle. For FY 2002, we did not request anything. As a result, we are maintaining a deficit of 85 justified positions. In FY 2003, our need is for 126 additional positions; we requested 21, which we received; but there remain 105 positions representing an unmet need for ECS positions. In FY 2004, there is a need for 176 ECS positions; we are requesting 60 positions; this would leave us short 116 positions. In FY 2005, the need is for 228 positions; we are requesting only 80 positions; the variance is 148 positions.

 

If we should receive the 60 positions we request in FY 2004, then our need in FY 2005 is 168 positions. We are requesting only 80; this scenario would still leave us short 88 positions. You can go through that exercise for social workers and for employment and training specialists as well. We are not asking for positions to meet the justified need, we are asking for fewer positions than are justified by the need.

 

The next step in the process is to calculate the need for supervisors and clerical workers. The supervisors are calculated on a 1:10 ratio and the clerical workers on a 1:4 ratio. For example, if we add 60 new ECS staff, we would need 6 new supervisors. If we add 80 new ECS staff in FY 2005, we would need 8 new supervisors.

 

This is how we derived the positions we are requesting. I believe this is easier to understand than the presentation we made at the overview hearing.

 

Assemblywoman Leslie:

It may be easier to understand, but it will still take us some time to work through. We want to clarify that these positions will be phased in. I think there are $9.9 million in salary costs in this budget for the next biennium. If we were to maintain all these positions, the actual salary costs would, I believe, be something like $29.4 million. Is that correct?

 

Ms Ford:

We would have to do that particular calculation.

 

Assemblywoman Leslie:

These are the figures our staff derived. I think it is important for the committee members, and agency personnel as well, to realize we are not looking down the road at a one-time adjustment. Caseload fluctuates considerably. How do we ensure the people we hire represent the correct number, and their total number fluctuates up and down with demand? How do we manage that?

 

Ms. Ford:

If you turn to page 10 in the “Field Services” section, you will see the phase‑in schedule of our requested positions. As I said, we will rerun the caseload projections at the end of the month; as a result, the numbers we project may change somewhat. If, for some reason, the caseload continues to drop, we would not fill positions. If we were to fill all the positions, and then the caseload starts dropping, we would not fill positions left vacant through attrition. This is how we would start ramping down. The guideline we use works both ways: to increase staff and to decrease staff. We would decrease staff accordingly if the caseloads declined.

 

Assemblywoman Leslie:

I believe most of these new positions would be in Clark County. Are you going to have to lease two new offices? Would you explain this? Are those costs covered in this budget, both on a phase-in and long-term basis?

 

Ms. Ford:

We have two new offices included in this budget in the M-200 unit as operating expenses. The amount in our submission includes rent and security for the offices. Our offices in the area are quite spread out. The Henderson office is distant from some of the zip codes it serves. We would like to locate offices closer to clients. Smaller offices are easier to manage and generate fewer errors. They are simply better to work in. We provide better client services through smaller offices, and we can manage them more effectively. The current offices simply cannot absorb staff increases of this magnitude. Our offices in the Las Vegas area are busting at the seams.

 

Senator Rawson:

One of the ways we might have you prioritize these positions is on an office basis. Specifically, we might consider the number of positions per new office. We would make this decision only if we have to, but we might ask how many additional personnel can you absorb without needing a new office. If you need a single new office, we would consider how many new personnel were needed. This would give us a better picture. This is something I need to ask, but do not shoot the messenger.

 

Ms. Ford:

I would ask you the same thing: not to shoot the messenger. When we asked the IFC for the 84.5 positions, one consideration was the number of positions the division could accommodate within existing offices. Our staff indicated it could accommodate more positions than were requested. However, we will be happy to go back and look at that. We do have a spreadsheet dealing with allocating personnel among our offices. We will be happy to provide that to the committee.

 

Assemblywoman Leslie:

I am sure you and your staff can appreciate the situation we are in. Your request involves an enormous increase in staff. We need to look at every possible way of managing it. If we do not hire as many staff as you project the State will need, does that mean the waiting time for services will increase? Will the processing time increase? What will this mean? How does Nevada compare to other states currently? Are any of them in the situation where wait times are so long in critical areas that penalties may be imposed?

 

Ms. Ford:

I do not have any comparisons with other states. I can tell you that our workers are drowning out there. They are not treading water; they are really drowning. We are seeing problems with case processing. We are supposed to be processing food stamp cases within 7 days for expedited cases. Currently, 63 percent of our cases are outside that 7-day timeframe. Regular food stamp cases are required to be processed in 30 days.

 

Senator Rawson:

I have been looking at that also. In weighing all the issues involving staff and priority lists, it looks to me as though we are out of compliance in both the regular and expedited food stamp provisioning. We would want to be very careful about cutting staff in those areas because we already know we are in trouble there. It looks as though our times are pretty reasonable in the TANF area. I do not know about the Child Health Assurance Program (CHAP). We know we have a bad situation with food stamps. As we ask you to prioritize, and as we look at office space and those kind of things, keep in mind that we know we have to straighten out some of these programs.

 

Ms. Ford:

When you look at the figures you have been provided regarding Medicaid and TANF, you should also note the percentage of cases processed outside the time limits. That is also a factor.

 

I would like to point out that we do not process cases like food stamps on a stand-alone basis. When I talked about “jackets,” I meant that when people apply for TANF, they are considered for TANF, food stamps, and Medicaid. The caseload is mixed. It is not as though we have a stand-alone eligibility worker who only does food stamps. Consequently, it is difficult to isolate how many people need to be hired in any one area.

 

Assemblywoman Leslie:

I know we will be struggling with these issues the remainder of this session and probably into the next biennium. We will have to watch the hiring carefully as the caseloads go up and down. Are we doing well with our error rates in the Food Stamp Program?

 

Ms. Ford:

Our error rates have been much better. We discovered part of the reason why our error rates were high was that we could not send out a denial of food stamps before the 30th day following application. Our workers were sending out denials before that in order to clear the decision from their desks. We reprogrammed NOMADS in a manner that prevented a caseworker from doing that. As a result, our error rate dropped. Our error rate seemed to be high because of that 30-day issue; that was resolved through the system.

 

Before moving on, I need to point out to the committee that the caseload growth and other issues in this biennial budget cause us to need a supplemental appropriation to get through this fiscal year. It is my understanding the supplemental is in the bill draft phase. We will run out of general funds in the beginning of April 2003. We may not make it through this year. That supplemental is with the Legal Division. We need to keep track of that and keep it moving.

 

Assemblywoman Leslie:

Our staff would certainly like to see the numbers you are using to make those projections.

 

Ms. Ford:

That is based on the way this budget was built for this biennium. It was built on a cost-allocation factor assuming 28 percent general funding. The actual cost allocation has come in at 33 percent General Fund need. That 5 percent is what makes the difference and causes the problem with the budget for this fiscal year. The General Fund need was under‑projected for this fiscal year.

 

Assemblywoman Leslie:

Let us move on to E-350. You had requested additional funding to relocate the Medical Assistance for the Aged, Blind, and Disabled (MAABD) eligibility staff. Why are you making this change now? We thought you had wanted to put this staff in with the staff of the Division of Aging Services (DAS) in order to obtain some benefits from that collocation.

 

Ms. Ford:

Originally, we had considered placing these positions at the Sahara office, collocated with aging services. Since then, the City of Las Vegas has come up with a building it is remodeling. It is an historic building, and is located on Bridger Street. It is in a very good location. The city wants to make the building a center for senior services. The city asked if we would be interested in partnering with them and occupying part of the building after renovation. The costs involved in that building are less over the long term. The first year, we will pay rent of $0.25 per square foot; we will pay $0.50 per square foot thereafter. The building will not be ready for 17 months. As a result, the costs will be incurred only in FY 2005. We would not move in until July 2004. In the long term, the numbers will be much less than are projected here regarding a move to the Sahara location.

 

Assemblywoman Leslie:

Will you submit a revision of the related budget numbers soon? When will you do that?

 

Ms. Ford:

We will rerun our caseload numbers at the end of March 2003 and will put all these things into the revision with the new model.

 

Assemblywoman Leslie:

Obviously, the sooner we can get that, the better.

 

Let us move on to budget reductions and E-600. Do we just have to deal with the 29.5 vacant positions?

 

Ms. Ford:

That is correct. There are 29.5 vacant positions. These are 29.5 of the 84.5 positions. If the M-202 budget is not approved, then we will not have the 29.5 positions that are currently vacant. This issue ties in with the M-202 budget.

 

Assemblywoman Leslie:

We understand. We also need an up-to-date schedule of replacement equipment associated with E-710.

 

Ms. Ford:

I will be happy to provide that.

 

Assemblywoman Leslie:

If there are no other questions on this budget account, let us turn to the TANF budget.

 

HR, Welfare/TANF – Budget Page WELFARE-21 (Volume 2)

Budget Account 101-3230

 

Ms. Ford:

Before going into the TANF budget, I would like to point out several things. You have probably read in the press that the Administration of Children and Families (ACF) is touting that TANF caseloads continue to drop nationally. They recently released figures saying there was a 2.78 percent national decline in caseloads between FY 2001 and FY 2002. That is a decline of 58,933 cases. Note that is “cases” not “recipients.” Some 56,491 of these cases were in New York. Consequently, one state accounts for 95 percent of the national decline in TANF caseloads. That is very telling. They tout the number, but do not explain what it means. The other thing the organization does not tell you is that there is no analysis relating to the 5-year rule. As you know, there is a lifetime limit of 5 years on the receipt of TANF benefits. The organization does not tell you how much of the decline is due to that. The organization assumes the decline is because these people became self-sufficient. However, chances are, while they are not receiving federal funds, they have been shifted to state-only programs, or county programs, or other programs. It does not mean they are self‑sufficient.

 

The second thing I want to point out before going into the budget itself is that the value of the dollar has declined. The purchasing power of the dollar now is 15 percent less than in 1996. Our block grant is about $47 million, including the supplemental appropriation for high population growth. With a 15 percent reduction, our buying power is about $40 million. We are going backward with our block grant funding just based on the buying power of the dollar.

 

With that as an overview, I ask you to turn to the “TANF” tab in our handout booklet (Exhibit C), so we can review the problems in TANF. The graphs were in our overview presentation, but I want to go through them with you. Page 1 in the tabbed section shows TANF revenue and what is happening to it over time. The blue blocks represent the “maintenance of effort” (MOE), the State dollars we are required to pay to bring in the block grant. The green piece represents the actual block grant, the $43 million. The small red piece represents the supplemental, the amount of money Nevada receives because it is a high population growth state. That dollar amount is frozen at the 2001 level. As a result, any population growth after 2001 is not recognized by the grant of any additional money.

 

The tiny light blue piece visible in State FY 2003 and before is the “high performance bonus” (HPB); that funding rewards the top five states in four different areas of success. Nevada has been lucky enough to receive high performance bonuses in the past; I do not know we will qualify in the future because of the way our caseloads have gone. The highest HPB award is 5 percent of the block grant the state receives; this is about $2.2 million for Nevada. The yellow piece at the top of the graph entries represents the carry forward funding.

 

Senator Rawson:

We need to work this through a bit. Where are we in the national rankings on TANF dollars as far as what we provide for people?

 

Ms. Ford:

Nevada is 44th with regards to its average TANF grant.

 

Senator Rawson:

How many people do we have receiving TANF money? I understand that is compared with the low-income population. Are we down low also?

 

Ms. Ford:

That is correct.

 

Senator Rawson:

This message has never gotten out. We receive high performance bonuses in a program where we are spending less than just about any other state. I think that is a message that somebody ought to hear. We keep hearing the phrase “cut it to the bone”. Expenditures are “to the bone,” and yet, the State is performing pretty well.

 

Ms. Ford:

Nevada has performed well in the past. I am not sure we will do so in the future because of caseload growth.

 

Senator Rawson:

We are not going to let you out of that performance pattern. Once you get an award, you have to maintain the standard.

 

Assemblywoman Leslie:

The other thing you should know is that the HPB Nevada received in State FY 2003 was based on our performance in federal FY 2000. If we should receive an HPB this summer, it would be based on our performance in 2001. The award is always 2 years behind.

 

Senator Rawson:

How long have you been in the Welfare Division?

 

Ms. Ford:

I have been at the Welfare Division for a year and a half.

 

Senator Rawson:

Well, the pressure is on.

 

Ms. Ford:

Oh, I see now; it is all my fault. Seriously, I would like to go through the remaining charts.

 

The chart on page 2 of the “TANF” tab depicts the growth in TANF expenditures. The TANF cash grants are represented by the large blue pieces. The “Field Services” portion represents expenditures for out staff and our offices. The “Child Care” portion is the “maintenance of effort” State dollars we can count towards both child care and the TANF grant.

 

The chart on page 3 shows a side-by-side comparison of our declining revenues and our increasing expenditures. The red blocks, although not indicated on the chart, represent our deficit. We project about a $50 million deficit over the biennium based on our October 2002 caseload. These numbers will change when we rerun the more recent caseload numbers. With the decrease in the caseload, we anticipate a better outcome, that is, a smaller projected deficit. However, there will still be a demand for general funds.

 

We recognized early in FY 2002 we would have problems with this budget. As a result, we deferred new programs, made cuts, and, generally, did as much as we could to carry ourselves over into FY 2003. You can see in the tables on page 4 of the “TANF” tab that we cut $13,746,380. This figure is found in the lower right of the page.

 

The FY 2003 numbers on page 5 have been updated based on the caseload in October 2002. You can see we cut another $18,897,551 in services, contracts, and benefits in this fiscal year.

 

As a result, over the biennium, we have cut over $32 million of spending in the TANF program.

 

The column at the far right shows about $10 million associated with caseload increases. We anticipated carrying forward $7.7 in reserves into FY 2004 in the Governor’s budget. That figure has now increased to about $10 million. We now have $10 million going into FY 2004 instead of $7 million.

 

The information contained on page 6 highlights the overall problem in the TANF block grant. I suggest we be very cautious about block grants in the future.

 

The spreadsheet on page 6 combines the three budgets affected by TANF: Welfare Administration, B/A 101-3228; TANF, B/A 101-3230; and Welfare Field Services, B/A 101-3233. When you add the base amounts together, the total adjusted base is $58,021,423. This figure is an entry in the upper left of the FY 2004 spreadsheet. If you go to the bottom of that column, you will see the federal funds we budgeted for this program were $54,181,694. However, the actual available TANF block grant funds are only $47,699,862. As a result, we have an additional shortfall in this budget account of about $6.5 million. This covers both years of the biennium.

 

The shortfall occurs for the following reason. When we did the base, we did not reconcile the three budget accounts. This is a very complicated budget. We are using reserves in the base. Unfortunately, we counted the reserve as available federal dollars. This is a problem we need to fix.

 

Recognizing that particular shortfall, we will not be pursuing the $5 million reserve to carry forward. That is recommended in the Executive Budget. We will use that money to fill this shortfall. In addition, the carry-forward amount went up about $2.6 million beyond what was anticipated and what the Governor recommended. We will use that money toward the $12 million overall shortfall.

 

Based on our declining caseload projections, we anticipate a caseload expenditure decrease of over $5 million. These three numbers combine to make up the $12 million shortfall over the biennium that was unidentified.

 

Assemblywoman Leslie:

I think that was an excellent explanation of your plan. We appreciate your putting it together.

 

Assemblywoman Giunchigliani:

Would you talk about the Kinship Care Program and the impact on that program?

 

Assemblywoman Leslie:

Let us hold those budget reduction questions; we will have a good discussion of those issues later. Let us finish this item first so our attention is not diverted.

 

Senator Rawson:

I have a question regarding our general philosophy. Do we want to raise taxes to build a reserve, or, if we have to raise revenue, should we put that into the base and let the reserve take care of itself? This is a fine point we are going to have to deal with. It is important for people to note we have faced this problem for a little while, and we have had a reserve to deal with it. We have now spent our reserve. It is gone.

 

Ms. Ford:

The reserve is gone. With the revised budget figures at the end of this month, there will be no reserve established in the budget.

 

Assemblywoman Leslie:

I agree. This is an important point for everyone to understand. It is not good news.

 

Before moving on to the budget reductions, would you talk about welfare reauthorization? It passed the House of Representatives and is on its way to the Senate. Do you have any news as to when it is coming and what it might look like?

 

Ms. Ford:

It is pending. The bill passed by the House is essentially the same bill passed last session by the House. It would increase mandatory work requirements from 20 hours a week to 24 hours a week. The bill limits the activities that count as “work” to very specific categories. It will be harder to meet that requirement. The number of hours one has to work increases from 30 hours to 40 hours. There are actually two different requirements. One has to have an accountable work activity, filling the remaining 16 hours with education or other activities. However, these people have a 40 hour per week “work” requirement. The work participation rates would gradually increase year over year, ultimately hitting 70 percent. The work participation rate has to be 70 percent.

 

The caseload reduction factor was changed. Instead of a comparison with the high point, and our high point was 95, there will be a rolling comparison. Ultimately, this year would be compared to 4 years ago. Of course, this will not work very well for Nevada in the short term.

 

There are other problems. Childcare is flat funded. There is a requirement for activities for 40 hours per week, but no more money is given to childcare.

 

Assemblywoman Leslie:

How do you anticipate incorporating these changes into this work program? Do you think a decision will be made this spring? Do you have contingency plans regarding how these changes will affect Nevada?

 

Ms. Ford

We have built some things into this budget in anticipation. For example, there is an employment training program enhancement. The reason for this is the increased work participation rates and the increased efforts we have to put into those areas. We have built some contingencies into this budget in anticipation of the passage of federal legislation. However, it is hard to predict the ultimate impact. Moving to a 70 percent work participation rate will be very difficult.

 

Assemblywoman Leslie:

Do you want to discuss any more of your charts?

 

Ms. Ford:

I would like to go through them all first simply to provide an overview of TANF, benefits, and how the system works.

 

The chart on page 7 of the “TANF” tab helps explain terms such as “100 percent of need”, “100 percent of poverty”, and “133 percent of poverty”. This chart explains what that all means. The term “100 percent of need” is 71.5 percent of poverty; 185 percent of need is 132.5 percent of poverty. This is what determines eligibility. A TANF recipient must be below 185 percent of need in gross income and below 100 percent of need in net income in order to qualify for a grant. This is not a lot of income. The same is true for TANF‑related Med, those recipients who opt only to receive Medicaid.

 

The next chart, on page 8, compares benefit amounts from the regular TANF grant, non-needy caretaker grants, and kinship care grants. The chart depicts current benefit levels. Our regular TANF grants are much lower than non-needy caretaker grants, which are lower than kinship care grants.

 

The chart on page 9 compares TANF cases to where the cash flows. Fifty-seven percent of our caseload involves single‑parent clients; some 49 percent of the cash goes to them. Twenty-three percent of our caseload involves non-needy caretaker clients, and 31 percent of our cash goes to them. One percent of the caseload involves kinship care, and 3 percent of our cash flows to those recipients.

 

The figures on page 10 of the “TANF” tab are based on the Governor’s recommended budget, which was based on October 2002 data. These figures relate only to TANF; they do not include field services or welfare administration. The figures show how TANF dollars are spread across benefit categories. You can see how much money goes into each cash assistance program, the transfers to sister agencies, and the contracts we manage.

 

The term “General Fund in lieu of TANF” appears at the top of the page. This is the amount of money for B/A 101-3230 needed from the General Fund to maintain the existing funding levels for these programs and benefits. Should you want to change benefits, you will either have to add General Fund dollars or cut in some other area.

 

The bottom of the page reflects several hypothetical situations. You can see the results of eliminating the county transfers; that would take $1.9 million out of each fiscal year. The county transfers involve the emergency assistance program, which has already taken a 75 percent cut. If contracts for domestic violence, substance abuse, and rape prevention were eliminated, then we would save $1.2 million in each fiscal year. These contract amounts have already been cut 25 percent. Eliminating transfers to the Department of Human Resources would save several million dollars, but the result is creating holes in that department’s budget. That department’s budgets were built on the assumption that they would receive TANF dollars.  If non-needy caretaker payments were reduced to the single parent level, then savings are on the order of $8 million to $9 million. However, over the biennium, we would still end up needing $4 million despite all those program cuts.

 

Assemblywoman Leslie:

You certainly know how to make friends.

 

Ms. Ford

As I said, just do not shoot the messenger.

 

Assemblywoman Leslie:

I am certain we will receive other testimony relating to the impact of some of these proposals. We appreciate your laying this out for us. It is important information for us to have.

 

I think you covered M-200 issues associated with the TANF caseloads. I think we can now turn to budget reductions if there are no further questions.

 

Assemblywoman Giunchigliani:

The Kinship Care Program is one of my pet projects. We funded it with TANF dollars. Can you talk about the program and the impact on it as a result of decreasing TANF funding, not, perhaps, the most stable funding source? How many people are in that program? How many people would like to take advantage of the program? I know there were problems associated with fingerprinting, and perhaps we need to address the factors slowing down the process. Do you have any ideas were we could find funding to restore the program?

 

Ms. Ford:

This really depends on how many General Fund dollars the Legislature is willing to put into these programs. As you can see from the last chart, the lower the General Fund appropriation the division receives, the more cuts the division will have to make somewhere. Our single parent families have not had a benefit increase since 1992. As a result, I am very unwilling to cut them first. I want to let you know that.

 

It might be best for the Kinship Care Program if it were made a stand-alone budget account, that is, its own program funded by the General Fund. If that were the case, it would compete only with itself to stay within budget. Now, it competes with other TANF recipient programs and is complicated by the TANF block grant.

 

With regards to fingerprinting, we will have a bill draft request (BDR) to eliminate the fingerprinting requirement. The court is supposed to ensure that legal guardians do not have criminal records; we feel we are duplicating a court effort. Fingerprints are very difficult to get processed. My division does not have control of that process, because we send the fingerprints to criminal records. This becomes unmanageable.

 

Assemblywoman Giunchigliani:

I think that is an excellent idea. I am glad you brought it forth. Would you mind if the committee were to prepare a budget option creating it as a stand-alone program for consideration?

 

Ms. Ford

Not at all; I would be happy to administer the program. There are simply a number of problems with TANF.

 

Assemblywoman Giunchigliani:

If we made the kinship care a stand-alone program, supported by the General Fund, we could examine some options.

 

Ms. Ford

We can run different figures for you with different benefit levels. We do have spreadsheets to accomplish this.

 

Assemblywoman Giunchigliani:

That would be helpful. In the long run, we would be keeping families together. Eventually, some of these people are going to have to turn their grandchildren over to State care, and that would cost us more money in the long run. Maybe we should consider funding this program differently. I appreciate your help.

 

Assemblywoman Leslie:

On that same topic, do you anticipate a State plan change on April 1?

 

Ms. Ford

We have already adopted a State plan change in both the kinship care and non‑needy caretaker programs. We have adopted a gross income test for the adult relatives of the children in the household. Previously, there was no gross income test. As a result, one could be making a million dollars and be receiving public assistance in those programs. The gross income test would be 275 percent of poverty. We have provided you with that chart. At 275 percent of poverty, the cut-off gross income for a grandmother with two children would be $3442 per month. This comes from the chart on page 7 of the “TANF” tab. If grandmother makes less than that amount, she is entitled to a grant.

 

Assemblywoman Leslie:

What feedback through the public hearing process have you had on these changes?

 

Ms. Ford

Generally, the grandparents felt they would not be hurt because they thought no one made that much money. I think there may be an impact in the non‑needy caretaker program. That is because the average age of a non-needy caretaker is 49; those people are more likely to be working. By contrast, the average age of a kinship care recipient is 67.5; those recipients are more likely to be on fixed incomes.

 

Assemblywoman Leslie:

I know there is public testimony on this subject. We will return for that testimony after going through the budgets. Let us turn to the work participation requirements and M-593. Would you explain the changes in that decision unit and what they affect?

 

M-593 E & T Participation Rate – Page WELFARE-22

 

Ms. Ford

We are going to be rerunning our figures at the end of the month. We believe these costs will come down. We think they are overstated at this point. This is due to the increased hours, the move to 40 hours with 24 hours of actual work activity, and the increased participation rate. We are going to need more contracts and services provided to those people in order to meet the new requirements. We will have the new figures when we rerun the caseload.

 

HR, Child Support Enforcement Program – Budget Page WELFARE-25 (Volume 2) Budget Account 101-3238

 

Assemblywoman Leslie:

We look forward to getting those numbers. We talked about the high performance bonus. If there are no other questions, let us turn to B/A 101‑3238, dealing with child support enforcement.

 

Ms. Ford

Are there questions relating to the budget base?

 

E-450 Reward Self-Sufficiency – Page WELFARE-28

 

Assemblywoman Leslie:

One major issue involves the wage assignment fee, E-450. A bill defeated last session has now been resurrected in the Governor’s proposal. How will this work? Also, can you tell us what type of child support enforcement the State is responsible for and what type of enforcement is handled by the district attorneys in the counties? How do these efforts balance out with the revenue?

M-200 Demographical/Caseload Changes – Page WELFARE-26

 

Ms. Ford

Before I answer that, let me point out that there is a built-in reserve associated with M-200. This particular program does not receive any General Fund dollars. The program is funded by the State share of collections when TANF dollars are recovered. The downside of that program design is that the State share of collections is tied to the Federal Medicaid Assistance Percentage (FMAP). The FMAP has gone up for Medicaid; that is great because Nevada gets an increased federal share. However, correspondingly, we can keep only a lower share of State collections. The budget overstated the State share of collections in the M‑200 decision unit. We are projected to have no reserve funds in the child support budget by 2005. In fact, we have had to reduce expenditures in 2005 in order to stay within budget. We will provide these details during our caseload discussion. However, you need to know the FMAP controls the amount of State collections the State can keep.

 

Assemblywoman Leslie:

The FMAP discussion is somewhat new to us. Our staff will be following up with you to ensure we understand fully how that ties into other things.

 

Ms. Ford

I will be happy to provide additional information. We discovered that particular problem only after the budget was submitted. The additional $2 fee relates to this issue. If we are running short in the State share of collections, then we need to identify other revenue sources, either the General Fund or something else.

 

I understand this particular request was made during the last Session and it was defeated. This money, $2 per income withholding is proposed, will be turned over to the State. The State will share it on a 50-50 basis with the counties, so the counties will receive 50 percent of the money even though I am not certain we have the allocation formulas at present. The counties will be able to use the money they receive from the fee to offset their General Fund costs. The State can use its share to offset its additional costs, currently provided by the State share of collections.

 

The State has absorbed a lot of costs that used to be county expenses; these include our State disbursement unit. All payments of child support now pass through the central disbursement unit. Checks to the families are cut from there. Child support checks have to be turned around within 48 hours. Previously, the district attorneys issued checks and accounted for child support. The State has taken on that responsibility and this adds to the State share of collections.

 

The counties used to have their own stand-alone systems. With NOMADS, the State assumed that responsibility from the counties. We have additional costs developed over time. With the reduction of the State share of collections, meeting these costs becomes more problematic.

 

Additionally, if there are changes on the federal level to send more collections directly to the family, then, since the federal government determines how we distribute child support, Nevada will have less money to run its program. There are a number of issues affecting the State’s share of collections. Yet, we need to have secure funding bases so that the State does not run into trouble in the future.

 

Assemblywoman Leslie:

My recollection is the principal objection last session to this suggestion was it seemed we would be taxing the very people receiving child support to pay for the child support program. This is essentially correct, is it not?

 

Ms. Ford:

I was told of that concern. I do have a meeting planned with Ms. Buckley next week to see if there is some other mechanism we might utilize other than income withholding. So, perhaps there is another approach.

 

SENATE BILL 186: Imposes fee upon obligor each time employer withholds income for payment of support for child. (BDR 3-446)

 

Assemblywoman Leslie:

That is excellent. I have a meeting with the majority leader this morning and I am glad she is addressing this issue with you. It would be good for you to continue this discussion. But, right now, Senate Bill (S.B.) 186 is in the Senate Judiciary Committee.

 

Ms. Ford:

That is correct, and I believe the committee has a work session Friday morning.

 

Assemblywoman Leslie:

Have you informed the members you are moving back the effective date to October 1,2003?

 

Ms. Ford:

I believe they will be informed on Friday. The budget is built on the assumption the State would receive the $2 fee for 6 months. However, we will not be getting quite that much since the implementation date is October 1. We do not anticipate money coming in until January 1, 2004. As a result, we had to reduce our projections for what the reserve would be in this budget module.

 

Assemblywoman Leslie:

Talk to us a little about the reserve. Do you need 2- or 3-month reserve, or, by contrast, do you need a 6-month reserve?

 

Ms. Ford:

I think we need at least 3 months in reserve at the very minimum. We have to get our collections in. Most of the State’s share of collections comes in via the Internal Revenue Service (IRS) intercepts, which take place in the spring. However, our fiscal year starts in July. Consequently, we must have money to get the program running for the beginning of the fiscal year.

 

Assemblywoman Leslie:

Would a 3-month reserve be optimal?

Ms. Ford:

My chief of child support indicates that a 5-month reserve would be optimal.

 

Assemblywoman Leslie:

Maybe we will settle at 4 months.

 

How much money is in the welfare administration budget that might be better charged to this account because the funds support programs?

 

Ms. Ford:

Most of the administrative costs for child support are in B/A 101-3238. There are some items we could cost allocate in accounting and budgeting. Ultimately, we would like to substitute some of the State’s share of collections or this fee for General Fund support so that we can offset the need for general funds.

 

Assemblywoman Leslie:

If you could take a closer look at that, we would be interested in learning what you come up with.

 

Let us turn to the 9 new positions and the support costs you are requesting in M-200 over the biennium. Can you talk to us about that?

 

Ms. Ford:

In child support, the public assistance cases are done through the State program. Clark County now does public assistance cases for the State. With the increase in the TANF caseload, there is a corresponding increase in the child support caseload, although not exactly the same. They are anticipating an 11‑percent increase in the child support caseload. Our TANF caseload increases were much higher than that. In conjunction with the increase in caseload, they are asking for one quality control (QC) specialist to follow up on individual office corrective action plans; a program specialist to assist with IRS offsets, exception requests, and policy development; six support enforcement specialists to provide hands-on work with our clients and to ensure the caseload is serviced in a timely manner; and one clerical support.

 

Assemblywoman Leslie:

Go back to the quality control specialist. Are you still doing the self-assessment compliance reviews within the division? If so, why do we need this person?

 

Ms. Ford:

The self-assessments are mandated by the federal government. This position would assist in completing that particular project. In fact, we just turned in our most recent self-assessment about a month ago.

 

Assemblywoman Leslie:

Do you need a new position because of the caseload?

 

Ms. Ford:

We need the position because of the caseload and because of the increased responsibilities and increased reviews. There are different areas where the federal government requires us to meet certain percentages of compliance. As a result we have to review all those cases. With caseload increases statewide, including the caseloads of the district attorneys, which we must review, the demand has increased.

 

Assemblywoman Leslie:

Are the district attorneys happy now? I know they were unhappy last session. They have not complained to me recently.

 

Ms. Ford:

We are working very well together; I believe they are happier.

 

Assemblywoman Leslie:

You currently have six social welfare program specialists and six management analysts who do program monitoring and performance. What is the justification for another position in this area? I am referring to the requested program specialist.

 

Mr. Stagliano:

The reason we are requesting that position is to deal with our tax offset program. We need more timely administration. We hold IRS returns for 6 months in order to deal with injured spouse claims. This position would address those tax intercept responsibilities.

 

Assemblywoman Leslie:

Our final question in this area goes back to the wage assignment issue. Esmeralda and Lander Counties have dropped out of the child enforcement program. If we go to this new funding mechanism, will the State get the counties’ share? How will that work?

 

Ms. Ford:

Those counties would not get that share. Whoever is working on those cases would participate in the sharing arrangement. Elko is assisting with those cases. We would probably increase Elko County’s share, or we would retain some for the State if we were doing the work.

 

Assemblywoman Leslie:

Are there other questions from the committee or anything you wish to add, Ms. Ford? I do not want to cut you short.

 

Hearing none, let us turn to B/A 101-3232, dealing with assistance to the aged and blind.

 

HR, Assistance to Aged and Blind: Budget Page WELFARE-35 (Volume 2)

Budget Account 101-3232

 

Ms. Ford:

This account involves the State supplement for the aged and blind. This program is really administered by the Social Security Administration (SSA). The State provides money for the State’s share. The SSA makes a Supplemental Security Income (SSI) payment, and the State augments the federal payment with a State payment. We send the money to the SSA. It administers the accounts and actually sends the checks out to recipients. This saves accounting costs. The recipient does not get two checks, one from the federal government and one from the State. A recipient receives a single check from the federal government.

 

This particular account reflects the caseload increases we anticipate and the additional dollars we will have to send to the federal government for the State share of the supplement.

 

Assemblywoman Leslie:

I think our only question on this account involves the caseload growth. I assume you are monitoring that. Are you going to modify the numbers in April and get them back to us?

 

Ms. Ford:

Yes, we will run the numbers once again.

 

Assemblywoman Leslie:

I seem to have skipped the child support federal reimbursement program. Do you have any comments you want to make?

 

HR, Child Support Federal Reimbursement – Budget Page WELFARE-32 (Volume 2) Budget Account 101-3229

 

Ms. Ford:

No, this account involves federal pass-through dollars to counties.

 

Assemblywoman Leslie:

Let us turn to B/A 101-3267, dealing with child assistance and development.

 

HR, Child Assistance and Development – Budget Page WELFARE-37 (Volume 2)

Budget Account 101-3267

 

Ms. Ford:

There is a “Child Care” tab in our handout. Page 1 contains certain key facts and an explanation of how the different programs work. The sliding fee scale is also included as page 2. The numbers printed in bold typeface represent the 185-percent-of-need standard. The higher numbers represent 175 percent of State median income, which is the maximum for these programs. The numbers in the column to the right are the co-payments based on the sliding fees. We wanted you to have this information.

 

Do you have questions on the base?

 

Assemblywoman Leslie:

I want to confirm, as the budget reductions go into place, General Fund dollars will be reduced by $280,000 in childcare. Is that correct? That involves E-600.

 

E-600 Budget Reductions – Page WELFARE-39

 

Ms. Ford:

That is correct.

Assemblywoman Leslie:

That amount would have served about 88 children per year, is that correct?

 

Ms. Ford:

I think that is correct.

 

Assemblywoman Leslie:

Are we maintaining that reduction in this budget?

 

Ms. Ford:

Yes, I think we are.

 

Assemblywoman Leslie:

Talk to us about the mandatory categories of childcare where we are not going to have waiting lists in contrast to the “at risk” and discretionary categories. What do the future wait lists look like for those recipients?

 

Ms. Ford:

Currently, we have a wait list in both the “at risk” and discretionary categories. The mandatory categories include New Employees of Nevada (NEON), people receiving TANF and getting ready to go into employment; Assistance for Childcare for the Employed (ACE), people who have obtained employment and can be in the system for up to 12 months unless their income exceeds the budget. We do not have waiting lists in those two categories at present. We do have waiting lists in the “at risk” and discretionary categories. We project increases in those waiting lists over the next biennium.

 

We do not anticipate receiving additional federal childcare funding for the upcoming biennium. The final FY 2003 budget was approved about 2 weeks ago. Childcare discretionary funds were cut by $77,000.

 

Assemblywoman Leslie:

Do you mean cuts by the federal government?

 

Ms. Ford:

Yes, that was a federal cut.

 

Assemblywoman Leslie:

Is that in the child development block grant?

 

Ms. Ford:

That is correct.

 

They are reinstating the $77,000 in the FY 2004 proposed budget at the federal level.

 

We serve the “at risk” recipients first when there is a waiting list. We serve the discretionary recipients last when there is a waiting list. We project those waiting lists will increase dramatically.

 

Assemblywoman Leslie:

Explain the difference again between “at risk” and discretionary categories.

 

Ms. Ford:

If you turn to the chart on page 2 of the “Child Care” tab, you will see bold figures defining 185 percent of need based on household size. “At risk” means a recipient is below 185 percent of need. This means a recipient is “at risk” of coming onto TANF and needing a cash grant. If a person is over 185 percent of need, then that person is “discretionary” because the potential recipient is not “at risk” of coming onto TANF. The difference is the cutoff of 185 percent of need.

 

Assemblywoman Leslie:

Are we still using the two main contractors, the Children’s Cabinet in the north and the Economic Opportunity Board (EOB) in the south, to administer these funds?

 

Ms. Ford:

Yes, we are.

 

Assemblywoman Leslie:

Do they have advisory groups that advise you regarding how we can most effectively use these dollars to reach the neediest people and manage the waiting lists? We are looking at the projections, and some of the waiting lists are approaching 5,000 children in 2005. I know that will put huge pressure on those organizations. Do we have a plan for managing that?

 

Ms. Ford:

We do have a childcare advisory board. Its next meeting is scheduled for April 11. We will bring these issues to its attention. The problem is the caseloads have exploded, and the childcare dollars have not increased. Unless there is a block grant increase for childcare, we cannot serve the population unless the Legislature is willing to put in some general funds.

 

Assemblywoman Leslie:

I know people in the court system are frustrated. Judges are always after me regarding people needing childcare who cannot move on without childcare. Sometimes they do not know where they are on the list. I am not convinced we are doing all we need to do to manage those difficult situations as effectively as possible. I am interested in that.

 

Last year, I believe you cut the reimbursement threshold for childcare from 75 percent to 70 percent. I am not sure whether this was just in southern Nevada. Is that continuing? Can we anticipate more use of this mechanism? I am certain it is very unpopular.

 

Ms. Ford:

The problem is we have to balance trying to service the children against paying the providers. I hate to say we cut them. What we did was set their reimbursement rate at the 70th percentile. What that means is that 70 percent of the providers get their costs met. The top 30 percent, the more expensive providers, do not get their costs met. Our clients can go to any provider they want, but they will have to pay more to go to the more expensive providers.

 

Assemblywoman Leslie:

So, the client picks up the extra cost.

 

Ms. Ford:

If they want to go to a more expensive provider, that is correct.

 

Assemblywoman Leslie:

Does this apply throughout the State or just in southern Nevada?

 

Ms. Ford:

The 70th percentile practice applies throughout the State. There are different rates for Clark, Washoe, and Douglas Counties, Carson City, and the rural counties. We do a survey of the prevailing childcare rates are in those areas. One rate does not apply across the State.

 

Senator Cegavske:

I am curious. What constitutes your waiting list? What qualifications does someone need to be put on the waiting lists? We had concerns in another area. I want to see if your practices were comparable to those of other agencies.

 

Ms. Ford:

The waiting lists are generated because of lack of resources to be able to provide services to the clients.

 

Assemblywoman Giunchigliani:

Is the person on the waiting list, the child, for example, screened for certain qualifications before you put them on the waiting list? Does the fact that a phone call or other inquiry is made to you qualify the caller as a being on the waiting list?

 

Ms. Ford:

They are prequalified. If they are below the 185-percent-of-need standard, then they would fall into the “at risk” category. If they were above 185 percent of need but below 75 percent of the State median, then they would fall into the “discretionary” category. We do prescreen people before they go on a waiting list.

 

Assemblywoman Giunchigliani:

That is what I wanted to verify. Thank you.

 

Assemblywoman Leslie:

I did not want to leave the impression this program serves only Reno and Las Vegas. I think the Children’s Cabinet manages the remainder of the State from Reno.

 

Ms. Ford:

Yes, the Children’s Cabinet manages most of the rural areas.

 

Assemblywoman Leslie:

Are we having problems getting rural providers to participate? Are people able to access childcare in the rural areas?

 

Ms. Ford:

According to my chief, people are able to access childcare in the rural areas. They have not had a problem with that.

 

Assemblywoman Leslie:

You are asking for yet another new position in E-478.

 

E-478 Effectiveness of Family Services – Page WELFARE-39

 

Ms. Ford:

When we reran the figures in March, we identified a potential shortfall in the childcare budget. We are not yet sure of the extent of the shortfall. We will be rerunning our figures at the end of the month. However, given that shortfall, we are deleting this particular enhancement request.

 

Assemblywoman Leslie:

That is news to us. It would be helpful if you could provide that information to our staff in writing.

 

Ms. Ford:

I would be happy to do that.

 

Assemblywoman Leslie:

Are there other questions on the childcare budget? Is there something you want to add, Ms. Ford?

 

Let us turn to the last budget account, B/A 101-4862, dealing with energy assistance.

 

HR, Energy Assistance – Welfare – Budget Page WELFARE-42 (Volume 2)

Budget Account 101-4862

 

Ms. Ford:

This program has changed dramatically over the last biennium. The relevant tab in the handout is “LIHEA.” While we continue to refer to it as Low Income Housing Energy Assistance, the program is a global energy assistance program funded with universal energy charge (UEC) and low-income energy assistance funds. The program now has these two main funding sources.

 

An evaluation of the program over the last 18 months has been completed. I believe committee members have received that evaluation. About a month ago, our waiting list was about 6,000 persons. The first chart in our handout, page 1 of the “LIHEA” tab, indicates the waiting list is now down to 2,500 statewide. We have been able to resolve a lot of the backlog in the last month. We hope that will continue.

 

The remainder of the contents at the tab is mainly informational for the committee members. The next chart, pages 2 and 3, shows how the energy assistance program has changed, what the eligibility criteria are, and how the benefits are different from what they were. The last chart, page 4, shows the different payment ranges and the average payment received for this fiscal year.

 

Assemblyman Goldwater:

We want everything to run perfectly from the very beginning. We dumped a pretty big program on you quite rapidly. The important thing we need to identify is that the program is getting better.

 

Ms. Ford:

The program is definitely improving. The program changed dramatically on July 1, 2003. It went from being simply the LIHEA program with a point system to a program with a fixed annual credit. That credit is the difference between what the median household pays towards energy and what a low-income household pays towards energy. To make that change, we needed usage data; we needed to create interfaces with the power companies and the gas company; we had to develop a computer system to perform the much more difficult calculations necessary to calculate the new benefits. We had some initial problems with our computer system. We have also had problems with our interfaces. However, all those problems are now being resolved.

 

Assemblyman Goldwater:

That is good. It would have been very easy to design a program that was simply a give-away or a discount from the power bill. However, that would not be as effective and fair to the providers and the energy users of the State. I felt, as did many other Legislators, a fixed credit was much more fair. That took more time to implement, and it was not as clean as we had hoped. I commend you on your progress. Others may think you should be progressing faster, but at least we are making progress. We will get this program to a point where it does work perfectly. Keep up the good work.

 

Ms. Ford:

Thank you very much. This is a start-up year. There will always be glitches with a new program in its start-up year. I am fairly confident you will see many changes in the next biennium and more benefits being dispersed. The program will be running much more smoothly.

 

Assemblyman Goldwater:

We are not asking for more program or administrative money here. We are going to deal with the glitches with good old‑fashioned hard work. Again, keep it up.

 

Ms. Ford:

I would like to point out that the average grant in this program was $472 this year. Last year it was about $272. More benefit assistance is going to people.

 

Assemblywoman Leslie:

This is a critical program for out constituents. When people complain about the State not helping, I like to talk about this program in my presentations to groups. We had elderly people who were cold in their homes. We had people in Las Vegas trying to get through the summer months. The program is critical.

 

Ms. Ford:

There was one issue regarding low-income households that were low energy users. They would not qualify for a benefit. We are going into a hearing to reinstate a minimum $120 benefit using LIHEA funds. We cannot do that with the UEC funds because of the way the statute calculates the benefits. The reinstatement would mean that people who used to get a $120 minimum payment will again be able to receive that benefit.

 

Assemblywoman Leslie:

What is the current processing time? Do you have an average figure available?

 

Ms. Ford:

I think the last number I read was approaching 30 days. It is less than that in the north, and we will be getting down to 30 days in the south. Part of the difficulty in the south is that our staffing is 100 percent contract employees. That means the staff is less stable. We are working on a resolution of this issue.

 

Assemblywoman Leslie:

Do you have comments on E-350, the outreach program? Are you having trouble finding people for that program?

 

E-250 Services at Level Closest to the People – Page WELFARE-44

 

Ms. Ford:

I do not believe we will have trouble finding people for this program. We put a hold on doing outreach because of the problems we were having in the interfaces. We did not think it made sense to encourage people to apply only to put them on a waiting list and tell them the wait would be several months. Now that our processing is coming on line, we are starting to do some outreach. That will probably start at the end of this month. I do not think we will have problems getting more people in the door.

 

Assemblywoman Leslie:

What are you going to do with the $90,000 in this unit?

 

Ms. Ford:

We anticipate producing some brochures. The utilities have already done some outreach for this program. They include information in the utility bills. We intend to use brochures and more public service announcements to get the word out that the program is open and available. The program is now a full-year program; it used to be just a 9-month program.

 

Assemblywoman Leslie:

How comprehensive will the program evaluation be? Are you hiring an outside contractor to do that?

 

Ms. Ford:

We will probably be looking for an outside contractor to do the next evaluation. Either we will issue a request for proposal (RFP) or we will talk to the University of Nevada, Reno. It has some very good people who might contract to do the evaluation.

 

Assemblywoman Leslie:

Will that be done next year?

Ms. Ford:

Yes, it will. One evaluation has been completed. We have an evaluation for the first 18 months of the program. That has been provided to the IFC and to the Legislative Commission.

 

Assemblywoman Leslie:

I think it is in the pile on my desk.

 

Assemblyman Goldwater:

It is a good evaluation.

 

Assemblywoman Leslie:

Is there anything else?

 

Ms. Ford:

I skipped over the issue of electronic benefit transfesr (EBT) for the Food Stamp Program. We converted from food stamp coupons to a swipe card. This is in the Welfare Administration budget, B/A 101-3228. The caseload growth was unanticipated for this biennium. As a result, we need a supplemental appropriation from the Legislature. Otherwise, we will run out of funds for that program in May. We have an additional supplemental for about $190,000 from the General Fund to get through this fiscal year. I do not know where that is in the Legislative process.

 

Assemblywoman Leslie:

Our staff seems to be aware of that supplemental. We will now turn to public testimony.

 

Michael Capello, Director, Washoe County Department of Social Services:

I have distributed a handout (Exhibit D). I would like to summarize the issue for Washoe County. Over the last 10 years or so, the county has received about $1.8 million of the TANF block grant. Previously, those funds were earned when the program was known as the Aid to Dependent Children (ADC) program under the emergency assistance program. The expenditures of the county in providing child protective services were a part of the overall ADC budget. They were calculated into the total TANF block grant.

 

At that time, the State was awarded some $44 million for the TANF block grant, and the child welfare expenditures incorporated into the block grant totaled about $8.9 million. Washoe County had earned $1.8 million of those block grant funds or 4.1 percent of the total block grant. Clark County received slightly over $3 million or 6.9 percent of the block grant. And the Division of Child and Family Services, the State agency, had earned slightly over $4 million or 9.3 percent of the block grant.

 

During this biennium, we were notified by the Department of Human Resources that, due to the extreme caseload growth in TANF, the county TANF allocation would be reduced by 75 percent for the current year. This represented about 14.5 percent of our child protective service budget. The reduction occurred soon after this fiscal year began. We learned through the release of the Governor’s budget the 75 percent reduction was proposed to continue through the biennium. This represents about a $2.7 million dollar loss to the front end funding of Washoe County’s child protection program. These are funds we built our program around. As we serve these “at risk” children in emergency circumstances, we want to offer them the best possible opportunity to avoid the long-term child welfare system. We have funded such programs as the family drug court, family counseling, parenting programs, emergency shelter care, and flexible funding to assist families needing short-term assistance with rent or utilities to prevent their children from coming into custody. In light of other demands on the TANF block grant, we are requesting the Legislature consider restoring Washoe County’s allocation to the $1.8 million level, the level the county earned with the child welfare expenditures that established the block grant at its current level.

 

Assemblywoman Gibbons:

Why was this office chosen to make these drastic reductions?

 

Mr. Capello:

We were told, as the State agencies were rolling out their 3-percent budget cuts, the TANF budget stood alone in terms of the mandatory TANF transfers. While the State agencies were making 3-percent budget cuts, we were asked to make a 14.5-percent cut. We were told the TANF budget stood alone in terms of making the numbers balance. We have been trying to manage that situation during this fiscal year. I do not know what else the reasoning would have been.

 

Assemblywoman Gibbons:

The previous speaker explained that TANF was not driving the budget increases. Can you tell me if you agree?

 

Mr. Capello:

Clearly, the TANF caseloads have grown from their low point before 9/11. I see that the caseloads for Medicaid and food stamps also have grown significantly. Part of the Washoe County perspective is our TANF caseloads in the county have not grown at those same rates. I did not see a breakdown of the numbers for Washoe County as compared with the rest of the State. Certainly there is some growth in TANF. I think it clear that the other two programs are driving the growth in terms of their eligibility staff needs. As Ms. Ford explained, staffers determine eligibility for all three programs. As the other demands grow, perhaps outpacing TANF, TANF continues to grow, although not at the rate of other programs.

 

Michael R. Alastuey, Lobbyist, Clark County:

Clark County is very much in the same position as Washoe County. We have taken a 75-percent cut in the TANF funds we use for child welfare. As Mr. Capello indicated, we previously received about $3 million. That amount has been diminished to $750,000. The TANF block grant is used by Clark County to reimburse the county for expenses incurred at the front end of child welfare costs. We greatly appreciate the burden borne by this subcommittee in recommending to the full committees the budget adjustments necessary. It is our earnest hope, our expectation really, that you would look closely at these budgets to find any opportunity to adjust them. I know there was considerable critique on your part of several of these budgets. We ask the fruits of those adjustments be made available to first restore the places where TANF funds used to go rather than be used for augmentations. We know, strategically, you do have to reformat these budgets. Whereas other State budgets took 3‑percent cuts, these are 75 percent reductions. I appreciate the observations made by Assemblywoman Gibbons. These reductions are disproportionate compared to most others.

 

Assemblywoman Gibbons:

These are difficult decisions we must make. Did we have a TANF rainy day fund? The economy started to slow down and the caseload increased after 9/11. Is that responsible for the 75-percent need?

 

Mr. Alastuey:

I believe those needs are best addressed by the Department of Human Resources and the welfare administrator, but, yes, TANF is one of the budgets in which a reserve was accumulated. It is our understanding as economic conditions changed, that reserve has been somewhat diminished. We realize the State’s fiscal constraints. We realize reductions have to be considered wherever possible. Nonetheless, we believe these reductions are disproportionate and particularly hurtful to the counties which have completely integrated the funds into their child welfare programs or which are on the cusp of doing so.

 

Jon L. Sasser, Lobbyist, Washoe Legal Services:

Today I represent not only Washoe Legal Services, but also two other civil legal service programs for low-income Nevadans. Unfortunately, I have testified on this budget in every session since 1983. I have provided six pages of single‑spaced testimony (Exhibit E). I would like to hit several highlights.

 

I am testifying today in support of this budget. My premise, as with the Medicaid and Check Up budgets last week, is that this is no place to find budgetary fat as you begin to debate the necessity of finding State operational revenues for the next biennium.

 

Above and beyond the problems found in other budgets, and creating the problems alluded to by Assemblywoman Gibbons, is the fact we are now paying the price for the 1996 decision to block grant the TANF program. In 1996, congress passed the Personal Responsibility and Work Opportunity Reconciliation Act. This federal welfare reform replaced the old ADC program, a cash grant program to families with dependent children. It was split 50-50 between the State and federal governments with a TANF block grant. To obtain the grant, Nevada had to put up only 80 percent of the money the State spent in 1996. This amount was called the “maintenance of effort.” I believe that is the blue shading in the charts Ms. Ford has distributed.

 

This “maintenance of effort” equals roughly $27 million annually for Nevada. Qualifying persons no longer have a legal entitlement to benefits, and the State no longer has a legal entitlement to obtain extra federal funds if caseloads increase. Nevada reaped the benefits of this federal block grant approach for about 6 years. As a result, we were available to continue TANF grant levels at the old ADC levels, and we accumulated a $22 million reserve by the beginning of FY 2001. We also had extra money enabling TANF dollars to fund other holes in our State budget. For example, as you heard, the counties began receiving TANF funds to supplement their programs. We created excellent new programs like the Kinship Care Program. We were able to create a large reserve, fund other programs, and continue our old programs. Things went well until the economy went south.

 

The inherent danger in a block grant, especially for a high-growth state like Nevada, is that when the economy goes down, people come back onto the program, caseloads go up, and the federal block grant is no longer adequate to meet the State’s needs. By the end of the next fiscal year, most or all of the TANF reserve will be gone, and we will have to deal with any increased caseload out of General Fund dollars.

 

The point has also been made that the Welfare Division already made a number of dramatic cuts during the last biennium in order to get us where we are today. I believe Ms. Ford reported about $32 million in cuts. In addition to cuts in kinship care grants, we also had cuts in the money passed to the counties.

 

There are other cuts you have not heard today. Previously, if a mom were on TANF and receiving child support payments, she could keep the first $75 collected and the remainder went to the State to repay the TANF grant. One of the changes necessary last fall eliminated that $75 pass through to the mother. As a result, she took a 20 percent cut in her income, down to $348 for a mother and 2 children. We had planned to increase the grants for those too ill or incapacitated to work, those who will not be able to comply with the new work requirements. However, because of this budget crisis, Nevada did not implement that grant increase during the last 2 years.

 

There have been a number of hits to this program already, some $32 million worth. The big-ticket item is the TANF grant itself. I certainly hope you will not consider cutting that. A mother and two children have received $348 since 1992. At that time, Nevada funded the grant at 60 percent of our standard of need. The standard of need is a formula that takes the federal poverty level, removes from it the federal food stamp level on the assumption that TANF recipients also receive food stamps, and the remainder is the standard of need.

 

When we first adopted this formula in 1987, the standard of need was $550 monthly, and the grant level was $330, some 60 percent of need. Today, the standard of need is $896 monthly. We are paying $348 monthly, only $18 more than we paid in 1987. Instead of covering 60 percent of need, we are covering only 38.8 percent of need. Today, to cover 60 percent of need, we would have to raise grant levels to $538 monthly.

 

I will not discuss other options you have regarding restricting eligibility. There are very few options there.

 

Let me say one thing about staffing. I hate to push budgeting by saber rattling, but the State should not forget it is under a permanent injunction in the federal lawsuit Hamilton v. Griepentrog. That lawsuit was brought in the late 1980s when about 34 percent of our caseload took more than 45 days to process. Under the terms of the permanent injunction, if the State ever reduces that percentage to 5 percent or less, then the lawsuit will be dismissed. Such a reduction was anticipated once the State got the NOMADS. Now, as we learned today, some of these programs are back up to 31 percent, performing over the 45-day period. The State faces potential sanctions if it does not get its act together by having sufficient caseworkers to process the cases on time.

 

I know it is inconvenient that a decline in tax revenue is accompanied by greater numbers of children needing help. In this very significant way, however, government differs from private businesses or households that can tighten their belts when income drops. I ask this joint subcommittee to send a strong message to the tax committees that we must raise the tax revenues to meet this challenge.

 

Senator Rawson:

I do not know whether we have emphasized this injunction before. I am familiar with some basic terms, but I believe it bears some discussion. What is the goal we are supposed to attain?

 

Mr. Sasser:

There is a federal promptness standard. It involves 45 days to process a Medicaid case and 30 days for a food stamp case. The lawsuit did not involve food stamps at the time, it only involved TANF and Medicaid. I understand, based on the current staffing shortages Nevada has, the number of cases taking more than 45 days to process is going back up dramatically. It is now up to 31 percent in some programs; to be clear, some 31 percent of the cases take more than 45 days to process. The goal of the lawsuit was to get that number down below 5 percent.

 

Senator Rawson:

I understand there is not a specific number that would put us in violation; rather, the sense is that we are getting close to it.

 

Mr. Sasser:

There is not an exact number. The court determined it would not need the injunction if Nevada were able to get the number below 5 percent. If we are at 31 percent, we are quite a way above 5 percent.

 

Assemblywoman Leslie:

I had forgotten about the suit until you prompted me with the name. Are we still under that order?

 

Mr. Sasser:

Yes, the order was a permanent injunction that, by its terms, would be dissolved when Nevada came below 5 percent.

 

Assemblywoman Leslie:

Maybe the division could take a look at this, and write us a short piece describing how processing times relate to the injunction. We would like to review that.

 

Assemblywoman Gibbons:

We had someone else here who testified our dollars are worth 15 percent less than they were in 1996. The TANF in 1992 was set at $348. What is the effect?

 

Mr. Sasser:

When I referred to 1992, I was talking about the maximum TANF benefit level. That year, the Legislature voted to raise that level from $330 for a mother and two children to $372 monthly. That was implemented after the session in October 1991. Then the State had its last big economic turndown, about 10 years ago. As a budgetary savings, the grant was reduced from $372 to $348 where it has remained since February 1992. That is the maximum grant for an individual family. The 1996 reference did not deal with the maximum grant; it dealt with the maximum amount of money the federal government would give to Nevada pursuant to the federal block grant. That amount has been frozen at the same level since 1996, although several minor factors, such as population growth, have resulted in some changes.

 

If you are asking about what you can do to influence Nevada’s problems in congress, there has been some attempt in congress to consider states with extraordinary growth like Nevada. If we reauthorize the basic block grant program without consideration of the unique situation of our State, having the fastest population growth in the country and the fastest poverty population growth in the country, then our problems can only get worse in the future. If congress passes an amendment it has considered, then some special attention will be given to Nevada and several other states that have had both high population growth and the low expenditure levels that started the problem. We could get some relief from that. Send a message to our folks in Washington.

 

Susan J. Meuschke, Lobbyist, Nevada Network Against Domestic Violence:

I have provided written testimony and statistics relating to training we have undertaken with the welfare division to help eligibility workers to identify, screen, and refer victims of domestic violence (Exhibit F).

 

There are several points I would like to make. After hearing the testimony, my condolences to all committee members. You have hard decisions ahead of you.

 

I would like to underscore Mr. Sasser’s point. People talked about the consequences of actions in 1997. They asked what would happen when the economy took a downturn. They asked what the State would do. Here we are, and we are not certain what to do.

 

I am here to plead with you not to eliminate all the grants for domestic violence programs. Many of the recipients of welfare are also victims of domestic violence. One of the reasons we moved from ADC to TANF was to move people from welfare to work, understanding there were great barriers to that movement. One of those barriers is domestic violence. Unless we can provide services like domestic violence services to help people in the 2 years they have to move their lives from one place to another, then we are doing a disservice to the people trying to move toward self-sufficiency. Without services, victims of domestic violence will not move from welfare to work, but rather from welfare to the streets or back to an abusive relationship. I do not think any of you would like to see that happen.

 

I encourage you to read my testimony. We have already encountered a 25‑percent cut. This has had serious impacts on programs. I have listed a few of the actual impacts we have seen. This is true for every program in the State. I listed only those programs where someone sent me information. I know that if Clark County experiences additional funding decreases, it will be very hard to continue services. I realize there are many services you must consider. Please keep in mind domestic violence is one of the barriers facing welfare recipients.

 

Assemblywoman Leslie:

That is important for us to remember. What is the total dollar figure represented by the 25-percent decrease?

 

Ms. Meuschke:

I do not recall.

 

Roger Mowbray, Deputy Administrator, Administrative Services, Welfare Division, Department of Human Resources:

The 25 percent represents $189,625.

 

Assemblywoman Gibbons:

Could you share with us the impact of 9/11 on domestic abuse in Nevada? I know there is a direct correlation between holidays and domestic violence.

 

Ms. Meuschke:

I cannot speak specifically to 9/11. As you will see in my testimony, domestic violence programs in Nevada experienced a 49 percent increase in service requests over a 5-year period. Some of the increase has to do with what is happening in the world. Some has to do with the fact that more people now live in Nevada. Some has to do with the fact that programs are better at reaching out to folks. Certainly, when there is a catastrophic event like 9/11, where television graphically depicts powerlessness, the same type of powerlessness experienced in domestic violence situations, then violent acts occur regularly. I know in New York State, increased numbers of people came to shelters as a result of 9/11. I do not know if that happened in Nevada. However, many world events compel people to think about their existence and how they want to change.

 

Jennifer Benedict, Social Work Student, University of Nevada Reno:

I am here with three fellow students. We conducted a project last semester we would like to share briefly with you. The project demonstrates how difficult it is in Nevada to support a family. We passed out a packet, “Not Getting by in Nevada” (Exhibit G), which has some of this information in it. This was a class research project. We examined economic and social conditions faced by low‑wage northern Nevada families.

 

First, we created an imaginary Nevada family. We decided on a single mother, 28 years old, with two children under age 10. We decided she would work at a job earning $10.25 per hour and she would receive $500 monthly in child support. Many single mothers do not receive this amount, unfortunately. Based on that income, we had to determine how much the essentials of food, shelter, health and medical care, transportation, and childcare would cost. Members of our class went into the community to talk with low-income employees. We visited mobile home parks, low-rent apartments, childcare facilities, medical facilities, food banks, and other agencies that would assist a family in meeting its day-to-day needs. The results were astonishing. I will let Marlyn point those out.

 

Marlyn Scholl, Social Work Student, University of Nevada Reno:

The $10.25 hourly wage we gave our family of three is fairly generous. The mother also received $500 monthly in child support. We provided a modest budget for food and other budget items as indicated on the first page of your handout. Her total monthly expenses amounted to $1982.70. Her total income was $1736. Every month there was a deficit of $246.70.

 

In summary, a team of social workers could not find enough resources for this family to survive on a monthly basis. My colleague will explain how this relates to TANF.

 

Patricia Macaluso, Social Work Intern, University of Nevada Reno:

I am a social work intern and have seen the devastating effects of poverty. I participated in this project. The family illustrated today in our study has an income of almost two times the minimum wage. It is well above poverty level. If we were to take the same family group, but have the mother unemployed and on welfare, then she would be receiving only $348. That is very low. She can barely survive making twice minimum wage. It would be very difficult to survive on $348 a month after paying for personal essentials like paper towels, soap, shampoo, clothing, and shoes for herself and her children.

 

We really feel this contributes to the feedback loop of poverty. It is very difficult for our impoverished citizens to escape. In order to preserve their humanity, it is essential the State realize the need for a living wage as well as the need to make no further cuts to its welfare program.

 

Melanie Walsh, Social Work Student, University of Nevada Reno:

There is one thing I would like to add. I was part of this project as well. When we came up with these numbers, we were assuming a family with two children, ages 7 and 4. One of these children is school aged, and both are out of diapers. I am a single mother of 2-year old twins. I know children of that age entail many added expenses. Looking at this budget, one could easily add $500 for childcare and miscellaneous. I also have seen the devastating effect low incomes have on children in my internship at an “at risk” elementary school. The income of $348 a month is simply not very much. Decreasing that amount would bring worse effects on families and very young children.

 

Senator Rawson:

I wonder if we could put some numbers on our available programs. What sort of rent subsidy is available for a woman in this condition? Let us assume she is not employed.

 

Ms. Scholl:

Low-income people often rely on Section 8 housing. I am not an expert, but I know from assisting people that there is a year waiting list. It took that long when I helped someone; I do not know what it is today. It may be longer. In any event, the wait is long. The person I was helping was borderline homeless. That person was moved toward the top of the list. I have no idea how long someone who was managing without help would have to wait.

 

Senator Rawson:

I am not suggesting there is a single easy answer, but how much is available for someone in some type of rent subsidy?

 

Mr. Sasser:

I think the rough answer is 70 percent of TANF recipients do not receive a housing subsidy. For the 30 percent who receive housing subsidies, their grant is not $348 a month but $272. TANF grants are reduced if there is a housing subsidy. One pays 30 percent of adjusted gross income for housing when one receives a housing subsidy. This is pursuant to formulas of the housing authorities. If one’s income is as low as $272 monthly, one would not pay much for housing.

 

Senator Rawson:

How about food subsidy?

 

Mr. Sasser:

The maximum food stamp grant for a family of three is $356 per month. If a family has a grant, it would not get the full grant level; it would get a little less than that.

 

Senator Rawson:

What about money for child care?

 

Mr. Sasser:

If a person is on TANF and going back to work, one gets childcare under certain circumstances and not under others. A person with a regular job would not receive childcare. A person in one of the work program would have to be provided with childcare.

 

Senator Rawson:

How high an amount would someone receive?

 

Mr. Sasser:

I would have to defer to an expert on that.

 

Senator Rawson:

I am trying to view the budget in its entirety. In practice, there would be no savings. Nothing would go into the bank or under the mattress. Health and

medical care would probably be scratched. One simply would not go to the doctor for colds. One would look for a cheaper place to rent. That decision would probably put one in a less secure neighborhood.

Mr. Sasser:

One automatically gets Medicaid if one gets TANF.

 

Senator Rawson:

One would change their diet, probably increasing potatoes, rice, and pasta.

 

There are other assistance programs, but not all of them are easily available, nor are they open to everyone. Even considering all of the benefits, a family would still be receiving less than $1,000 a month.

 

Assemblywoman Leslie:

Thank you, Senator. I think you have made a good point. Many of us appreciate it. Some of us have been trying for many years to point out how difficult it is to live on this amount of money.

 

Thank you, students. That was an excellent presentation. Thank you for coming.

 

Before we move on, I would like to get one thing on the record. Mr. Mowbray, would you return to the witness table? I was looking at your figures, and I want to ensure we have the correct numbers before us regarding budget reductions. I think you were looking at the wrong line. Regarding domestic violence, the total amount in the budget reduction is $181,888. I believe the substance abuse reduction is $189,625.

 

Mr. Mowbray:

That is correct. I noticed my error as soon as I sat down. You are correct. The $181,000 is the domestic violence reduction in FY 2003. That is on page 5 of our handout under the “TANF” tab. The substance abuse reduction was an additional $189,000. Then there is $75,000 between those figures for statutory rape prevention contract. These are all contracts we reduced this year to make up the savings Ms. Ford mentioned earlier.

 

Assemblywoman Leslie:

Are we anticipating carrying those reductions forward into the next biennium?

 

Mr. Mowbray:

That is correct.

 

Brenda M. Carrera, Director, Nevada Empowered Women’s Project:

The Nevada Empowered Women’s Project is an advocacy organization for low‑income women and children. The project represents over 1,000 low‑income individuals and families as well as social justice advocates throughout the State. Members of the project and I recognize the tough decisions and financial strains you face during this Legislative session and how the needs of low‑income

women and their children can be drastically impacted by those decisions. We have some very serious concerns that, for the purpose of economy, further cuts could be made to programs designed to assist families living in or near poverty. Reducing the cash grant benefit available through TANF which has been mentioned, $348 for a family of three, recognizing that not all families receive the maximum grant, will be cruel and very heartless. Not you as committee members, but the whole State.

 

As you may know, families who seek welfare assistance face many crises and challenges that usually cannot be predicted and over which they have little to no control over. These challenges include working at low-paying, dead-end jobs without health insurance, no child support due to poor enforcement, domestic violence situations, and unaffordable childcare, only to mention a few.

 

Due to our poor economy, last year alone, our project directly advocated for more than 200 mostly single, low-income women who were barely making ends meet. These women were facing similar crisis situations, while, at the same time, juggling basic necessities such as whether to pay the rent, power bills, or obtain food for their children. These families had to request public assistance to swim through their difficult situations and avoid sinking.

 

Nevada can no longer continue to expect families to excel and climb out of poverty when we do not even provide them enough to survive. We urge you to support the proposed Welfare Division budget and any efforts to provide a stable and fair tax base to increase revenue for our State.

 

I am providing my oral remarks in writing (Exhibit H).

 

I recognize we are running out of time. I do have letters I will submit for the record (Exhibit I). It explains how our program helped the author become self‑sufficient.

 

Jan Gilbert, Lobbyist, Progressive Leadership Alliance of Nevada:

I do not want to repeat testimony. Teresa Benitez, Miss Nevada, asked me to submit her statement for the record (Exhibit J). Many of you have heard from Ms. Benitez before. I think it is a touching statement about her family, her background, and where her family has moved. She is in a masters program; her sister is getting her bachelor’s degree from the University of Nevada, Reno. They came out of poverty.

 

The Welfare Division has sustained greater than a 3-percent cut. I know all of you are aware of this. It made cuts last session; it made cuts during the interim; and then it made the 3-percent cuts. The division has seen a huge devastation of its work program. We support the division’s staffing needs. I understand the obstacles you are facing. However, if the division does not have appropriate staffing, it cannot assist recipients to get off the welfare roles and get back to work and living their lives. Staffing is crucial to that success.

Finally, Ms. Ford touched on the reauthorization. I do not think you should discard this too quickly. I understand from my sources that authorization may be completed in June. It will have a huge impact on Nevada. If we have a 70‑percent requirement to get people working 40 hours a week, then, obtaining that objective will be nearly impossible if we do not have childcare dollars. I hate to inject doom and gloom at the end of the meeting. However, this is an exceptionally serious problem. I hope Ms. Gibbons and others will call their United States senators because the Senate is now in control. It will determine the outcome. We have communicated with them. I call them all the time. We need a lot of help from the State. Our senators need to understand how much Nevada will be hurt. 

 

Assemblywoman Giunchigliani:

In the past, we have submitted a committee letter to the Nevada congressional delegation, calling on them to recognize the impact on the State. We might want to consider a joint message from the subcommittee.

 

Assemblywoman Leslie:

I think there is an appetite for that.

 

Senator Rawson:

I agree.

 

Louise Bayard-de-Volo, Nevada Women’s Lobby:

I am providing a handout about the TANF program (Exhibit K). When the Nevada Women’s Lobby was formed 15 years ago, we were concerned about the low

level of support for people who really need it. That concern was key in the organization’s founding. As you can see, both from our table and from what you have heard in testimony, there has been very little change over the years. In fact, the level of support has eroded.

 

The second column of our table shows Nevada’s standard of need, based on a Legislative formula. You can see from 1987 to 2003 the amount has increased to almost $900. The fourth column shows the actual grants received by a family of three without the housing subsidies. In 1987, that amount was $330 and in 2003, the amount is $348. This represents an increase of $18 over all those years.

 

The last column shows the percentage of need. This is even more disturbing. It shows that in 1987, Nevada was covering 60 percent of the people who had a need. That percentage has decreased each year. At this point, Nevada is serving less than 40 percent of the people who have this need.

As others have said, Nevada should not be abandoning these people. We urge you to protect TANF and to give families in Nevada the chance to gain independence with this type of support.

 

Assemblywoman Leslie:

I see no other individuals wishing to testify. We stand adjourned at 10:34 a.m.

 

 

 

 

 

RESPECTFULLY SUBMITTED:

 

 

 

                                                           

James D. Earl,

Committee Secretary

 

 

 

 

APPROVED BY:

 

 

 

                                                                                         

Assemblywoman Sheila Leslie, Chairman

 

 

DATE:                                                                             

 

 

 

                                                                                         

Senator Raymond D. Rawson, Chairman

 

 

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