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
April 22, 2003
The Joint Subcommittee on Human Resources/K12 of the Senate Committee on Finance and the Assembly Committee on Ways and Means, was called to order by Chairman Raymond D. Rawson at 8:13 a.m. on Tuesday, April 22, 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.
Senate COMMITTEE MEMBERS PRESENT:
Senator Raymond D. Rawson, Chairman
Senator William J. Raggio
Senator Bernice Mathews
Senator Barbara K. Cegavske
Assembly COMMITTEE MEMBERS PRESENT:
Ms. Sheila Leslie, Chairman
Mrs. Dawn Gibbons
Ms. Christina R. Giunchigliani
Mr. David E. Goldwater
Mr. Lynn C. Hettrick
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:
Charles Duarte, Administrator, Division of Health Care Financing and Policy, Department of Human Resources
Debbra J. King, Administrative Officer IV, Division of Health Care Financing and Policy, Department of Human Resources
Nancy K. Ford, Administrator, Welfare Division, Department of Human Resources
Jan Gilbert, Lobbyist, Progressive Leadership Alliance of Nevada
Charles Duarte, Administrator, Division of Health Care Financing and Policy, Department of Human Resources:
Our budget process begins during the summer prior to the legislative session. We prepare our budgets and calculate our figures three times during the budget development process and during the legislative session.
We prepare our budgets in September in response to an agency request budget. We go through that similar process in terms of updating our agency requests with the inclusion of other changes for the Governor’s recommended budget, which occurs in December, using data as recent as November. In April, we generally update our budget figures for the committee and provide you and the Governor with the most recent information we have on costs and caseloads.
During each of these phases, the agency request and the Governor’s recommendation, we brief the legislative fiscal staff as well as the budget staff. At the highest level, the MPP, upon which our budget is based, is a calculation that is a product of two figures, caseloads and cost per eligible case. It belies the complexity of the calculation, because it is affected by a tremendous number of variables such as program changes, rate adjustments, caseload adjustments, eligibility changes, and a host of other factors that could affect either the caseload or the cost per eligible. There are direct and indirect factors, which turn this into a multi-variant mathematical exercise. We get our caseload from the Nevada Operations Multi-Automated Data Systems (NOMADS) of the Welfare Division, and the claims payment system provides cost per eligible data. The product of the numbers from each system is what we use in our MPP.
Today I will be talking about the results of some of those recalculated figures, but keep in mind, below the surface lie many hidden variables as well as not so hidden variables that affect the bottom-line numbers. I would like to go over the Division of Health Care Financing and Policy’s (HCFP) “Summary Shortfall Worksheet April 3 MPP” (Exhibit C), and talk about our supplemental request for the current fiscal year. Our new projection for HCFP’s net shortfall is approximately $11.7 million in General Funds for fiscal year (FY) 2003. This is up from approximately $9.3 million. The reasons for the difference are explained in each of the lines of the worksheet calculations.
The net negative numbers, the ones with the parentheses around them, are the decreases to the net General Fund shortfall. They are the result of budget savings initiatives implemented for FY2003. The positive numbers are the positive changes in the amounts we will need as a result of other factors. The first one is the impact of our claims backlog. We have had a significant claims backlog, which started last year in early summer. It peaked in August at approximately 240,000 claims in inventory, which created a significant problem as we moved into the development phase of the Medicaid Management Information System (MMIS). We needed to get that inventory down to approximately 10,000 by the time the new system came on line. Our fiscal agent at Blue Cross and Blue Shield Association has made a determined effort to do that, and because of their work, there have been positive benefits in terms of the project. The negative impact of this is on costs in the Medicaid budget for FY2003.
As a result of the claims speedup or the reduction in claims inventory, we are looking at $19 million in additional costs. The next three categories are the budget saving initiatives implemented this fiscal year in the pharmacy area that consist of several therapeutic classes of drugs. These include proton pump inhibitors (PPIs) or gastric acid medications, COX II, an anti-arthritis medication, and Viagra. The net savings are greater than anticipated, approximately $1.9 million in savings for 5 months. Oxycontin, a narcotic pain medication on which we have put restrictions for use, will produce savings of approximately $291,000 for 5 months. Synagis is a vaccine for respiratory syncytial virus. We are trying to be prudent in its use and target it to the appropriate populations. We see some savings there.
We intend to implement our rate changes for physicians in May; however, we expect claims in June to create savings at the lower reimbursement rate. Therefore, we will only have 1 month of anticipated savings of $500,000 in June if we implement the changes in May. We have an additional pharmacy savings initiative. We have reduced our payments to pharmacies from the average wholesale price minus 10 percent to the average wholesale price minus 15 percent. We estimate the resulting savings will be approximately $2.2 million this fiscal year. We have reduced our health maintenance organization (HMO) payments, in terms of the amount we pay for administration, resulting in a savings of $1.5 million. We have also implemented a change in our Medicaid life skills program, for savings of $77,000.
Regarding the preferred drug list, the generic maximum allowable cost for pharmacy and our changes to graduate medical education have yet to be implemented, and savings will be realized in the next fiscal year. We have a couple of work programs to move money from the intergovernmental transfer account into budget account (B/A) 3243, and those will bring additional savings and offset the General Fund need.
HR, HCF&P, Nevada Medicaid, Title XIX – Budget Page HCF&P-11 (Volume 2)
Budget Account 101-3243
We have some projected pharmacy savings in addition to this. This is as a result of implementation of our automated point of sale system. There are management processes that point of sale system utilizes called prospective drug utilization review, and we estimate the resulting cost savings at approximately 5 percent, which is approximately $924,000.
The subtotal for B/A 3243 in terms of General Fund need is approximately $11 million. If we add in an adjusted figure for the county match program, the bailout figure for counties needing assistance for their county match recipients, it adds another $662,000, bringing the net shortfall for the supplemental request up to $11.678 million.
We do not believe we will need a supplemental appropriation to this fiscal year in regard to the shortfall estimate for the Nevada Checkup program, shown on page 2. A reduction in caseloads and HMO rate reductions eliminated the need for a supplement.
Page 3 of the document depicts our updated MPP. We ran our MPP in April, using March caseload statistics. The two columns on the right are General Fund Appropriation Variance for State Fiscal Years 2004 and 2005. The additional General Fund need in FY2004 is projected at approximately $6.3 million, and $16.9 million is projected for FY2005. The variance contains several adjustments. The first is the changes in budget savings enhancement decision units E-600 and E-601.
E-600 Budget Reductions – Page HCF&P-23
E-601 Cost Containment Initiatives – Page HCF&P 23
There were several factors necessitating changes to those decision units. One was the decision to procure our preferred drug list (PDL) and implement that program effective January 1.
Some of the administrative costs are also included for the PDL. State maximum allowable cost for generic medications implementation was also delayed until January 2004, which had an impact. There were factors built into this projection model, which reduced the savings potential of decision units E-600 and E-601. The good news is we have developed additional savings as a result of the maintenance M-501 decision unit. This is what we call our MMIS decision unit.
M-501 HIPAA – Health Insurance Portability – Page HCF&P-16
Debbra J. King, Administrative Officer IV, Division of Healthcare Financing and Policy, Department of Human Resources:
The major change in M-501 is when the Governor’s recommended budget was approved, it was anticipated the fiscal agent would pay claims down from 90,000 claims inventory to 10,000 claims inventory. As you saw in our FY2003 supplemental request, the fiscal agent has far exceeded our expectation, and is, in fact, sitting at about 56,000 claims in inventory. We now project they will get down to 50,000 by June 30, so you will have a 50,000 pay-down to about 10,000 claims inventory. This savings in FY2004 offsets the additional cost we are requesting to be funded in FY2005
Mr. Duarte:
In addition, there are offsetting adjustments of $1.35 million in FY2004 and $1.59 million in FY2005, due to lower than estimated caseload figures for Nevada Checkup and reductions in HMO rates. The net of this adjustment is $6.3 million in FY2004 and $16.9 million in FY2005. In terms of the drivers for the increase, going back to the General Fund variance, there are three primary drivers. One is an HMO rate increase, which will be effective July 1, 2003, with the startup of our new HMO contracts. We received actuarial information on what the rates needed to be after we closed the Governor’s recommended budget.
The weighted average across Medicaid and Nevada Checkup, in terms of the increase, was around 1 percent. However, when applied to the different budget categories, you get a different picture. That 1 percent works to approximately 6.9 percent for Medicaid HMO populations and a 22 percent reduction for Nevada Checkup. The Nevada Checkup program was originally built on the assumption utilization would be much higher than it is, assuming children would be accessing services higher than the rates Medicaid children access services. Over the last 4 years that has not occurred; the utilization is significantly less. Therefore, we have actually reduced the reimbursement rate for Nevada Checkup from where the rate was, above the Medicaid capitation rate for HMO services, to where it is currently, which is below the Medicaid capitation rate.
The adjustment to the Nevada Checkup HMO rates is in the adjustment figure at the bottom of the table (Exhibit C). However, there was an increase in the Medicaid program in terms of what we need to reimburse HMOs to serve those populations. Under federal regulations, we are required to use actuarially sound and determined HMO capitation rates. Therefore, we are unable to change those figures. The federal government would not approve our program if we were to use something other than actuarially sound rates. The other reason Medicaid costs have increased is the Children’s Health Assurance Program (CHAP) cost per eligible has increased. Some of the increase in the CHAP cost figures were the result of the HMO increase, but there was also a significant increase in costs to this recipient population after the Governor’s budget was developed.
Additionally, we mistakenly did not budget for the non-citizen caseload. Non‑citizen services are what we have to provide under federal law to illegal aliens in need of emergency room care. These are expensive services. Page 4 of the document explains the caseload. What we provided you are three sets of tables on the left. These are the caseload figures we provided in the agency request phase, the “Governor recommends” phase, and the current caseload projection done this April.
In the bottom right-hand corner, under Total Medicaid, you will see for FY2005 our average caseload was estimated in the agency request at 203,911 eligible persons (eligibles). The Governor recommends was slightly less at 203,777, and the most recent data allowed us to reduce that caseload to 202,495. However, those adjustments are small. I believe we could say, essentially, the caseload estimates are consistent across all three estimates, and the total change in caseload between our most recent Medicaid projection run and the Governor recommends phase for FY2005 was only 0.63 percent. The new General Fund need described here is not a result of caseload change.
Page 5 gives you a history of some of our Medicaid payments by cost per eligibles category. Not included here is the HMO impact, which I have described in a separate section. We have increasing rates for most of our large populations. We have had downward adjustments in some of our other eight categories. However, the net impact of the increases for our large populations, which are the Temporary Assistance to Needy Families (TANF) and CHAP populations, are actually what contributes to the additional need we just described.
Finally, on page 6 is a summation of adjustments to the Nevada Checkup caseload projection. As I have already described, we are seeing a net reduction as a result of changing caseloads and the reduction in our HMO payment rates. Those bottom-line figures tie to the figures I presented on page 4.
Senator Rawson:
On page 5, where we go down the list of TANF, the aged, the blind, the disabled, and so on, would it be difficult to put in another column that would give us the numbers of recipients in each of those categories?
Assemblywoman Leslie:
This is the page I do not fully understand either, and it seems what you are saying is the cost per eligible client is driving the shortfall in Medicaid. Is that what you are saying? In addition, you had mentioned the non-citizen cost as something you had underestimated, and yet, when looking at the chart, it appears as though it has gone down quite a bit since 1998.
Mr. Duarte:
Actually, for the non-citizens the caseload is the driver. We underestimated the caseload in the Governor’s recommended budget. Some of the costs on page 5 are corrections. Therefore, it is not actually the cost per eligible. You can see the cost per eligible is declining. Although it varies from historical figures, some of that is because the caseload is small, relatively speaking. It is quite volatile and is dependent upon the types of cases that come in through the emergency room.
In March 2002 we made a determined effort to correct some of our program policies. Our fiscal agent was paying for services not considered emergencies. For example, services for individuals who had chronic illnesses, or individuals who had renal failure on dialysis, were going to the emergency room. Reimbursements were being made for routine dialysis. Under federal law, we should not be paying for those types of services. That has had a positive effect on the cost per eligible. It has had a negative effect on the county indigent programs, because they are now picking up those costs.
Assemblywoman Leslie:
Again, page 5 reflects decreases in TANF and CHAP costs.
Mr. Duarte:
What is not reflected here, Ms. Leslie, are the increases I described for HMO rates. These are the base rates without the calculated adjustments. When you add those, it significantly increases the TANF and CHAP costs per eligible.
Senator Rawson:
In rough terms, how many non-citizen participants are in the system?
Mr. Duarte:
For FY2004 we are projecting approximately 648 recipients as an average monthly caseload, and in FY2005, 798 are projected.
Assemblyman Hettrick:
You said we underestimated them at approximately 650 the first year of the biennium, 2004, and we are estimating them at approximately a 20 percent increase in FY2005. That seems like a huge increase if the FY 2004 projection was underestimated.
Mr. Duarte:
That is correct, Mr. Hettrick, but the historical figure for caseloads in that category shows a rapid increase. I do not have an explanation for the rapid increase. It is not population-dependent, and I believe it depends upon in‑migration and out-migration of that group of people. In FY2002, our actual figures were 193 recipients. They jumped up in FY2003 to 342 recipients. We have seen fairly rapid growth in the recent past.
Senator Rawson:
Does the federal government believe they are picking up their share because this is a Medicaid program with a 50-50 match?
Mr. Duarte:
Yes, we get a regular federal matching percentage on this population, as we would with other populations. Those percentages average 54.37 percent for FY2004 and 56.03 percent for FY2005.
Senator Rawson:
This has to be a figure representing several million countrywide. Is there any active discussion currently of covering a better percentage, because it should not be a state responsibility?
Mr. Duarte:
To my knowledge, there has been no discussion at the federal level of relieving states of the responsibility for coverage of this population. I believe the border states with Mexico have had to deal with this to a greater extent.
Senator Rawson:
To committee members who serve on the National Conference of State Legislatures or other committees, where these border issues come up, I believe this concern needs to go to Washington. As a committee, we might want to develop information as to what our expenses are as a state. Mr. Duarte, you presented us a caseload. If we simply do not fund the caseload, what would happen? If people show up for services, they will have to be provided. What would happen if we do not provide services?
Mr. Duarte:
We would move funding authority from FY2005 to FY2004 to cover our needs in FY2004. We are looking at several other adjustments that we believe might mitigate the bottom line. We are expecting approximately $11 million in additional General Fund revenue from our upper payment limit initiative. That was the initiative to pay public hospitals at the maximum level of the Medicare allowable rate. The $11 million would come in to our Intergovernmental Transfer account, B/A 3157, and could be used to offset some expenditures in FY2005. We are also in discussion with Legislative Counsel Bureau (LCB) staff about some of our cost-per-eligible figures, particularly for CHAP. Either we use the upper payment limit (UPL) state benefit as an adjustment to the bottom-line figure or as a reserve, and then use the General Fund to adjust the bottom-line figure.
Senator Cegavske:
This is a deviation from what we have been discussing. I was given an article at the beginning of session in reference to school districts and you being able to help them maximize the amount of money they can get federally from Medicaid dollars. I wondered if you could talk about that. I noticed Nevada is one of the states receiving the least amount of money, and they say it is because we do not apply for it.
Mr. Duarte:
There are two areas of funding available to school districts. One is for the services they provide to Medicaid-eligible and Nevada Checkup-eligible children, primarily for mental health services. These are direct services such as therapy. In addition, there are things like audiology, occupational therapy, physical therapy, and for services to children who might have physical disabilities that impair their ability to learn. Under the Individuals with Disabilities Education Act, the schools have a mandate to provide services. Medicaid has an opportunity to provide federal funds for those types of services, and, in fact, we have contracts with Washoe and Clark counties to do so. I could get you figures on what we pay on an annual basis to those school districts.
Other school districts, I believe, would find it challenging to meet the federal requirements necessary to bill for any services they render in their respective districts, although we are open to doing that. There are significant federal regulations regarding how to bill for those services and document costs, and it is often a burdensome process for small school districts.
Senator Cegavske:
Would it be advantageous for us to work with the State Board of Education to get dollars for the State, or does it have to go directly to the school district?
Mr. Duarte:
In my opinion, the challenges of meeting Medicaid requirements would have to filter down from the State Department of Education to each county school district. I do not believe we could waive reporting and billing requirements for the State. The funds also exist at the school district level. We would still need a way of getting those funds from the local school districts through the State Department of Education to the Department of Human Resources. I believe the bottom line is that it will be a responsibility at the local school district level, and each school district will have to make a choice as to whether or not to access federal funds.
Senator Rawson:
Could we do an intergovernmental transfer through the school districts?
Ms. King:
These are the school-based medical services. The school district actually bills us, for example, for 15 minutes of therapy for “Sally Senior,” or development of an individual education plan. However, service must be billed at the service and student level, and the bill goes through our regular process. We only pay them the federal share because the General Fund share is already in their budgets. It is similar to the way we bill our sister agencies when they only receive the federal share.
Senator Cegavske:
The reason I am asking is because I want to know whether you believe there are federal dollars that we, as a state, should be applying for and are not. Is this an area in which you could assist our school districts in getting the maximum possible from the federal government to help our school-based services with Medicaid dollars?
Mr. Duarte:
The answer is yes; there are federal funds available. The question is whether those school districts want to engage in this effort, because it is difficult. It takes staffing on the part of the school districts. It also takes staffing on our part, and we are not geared up for a statewide effort. We would be happy to look at the possibilities.
Senator Cegavske:
I guess that is where I was going, to see whether we could get together with the State Board of Education and the school districts to make an effort to maximize those dollars. It is embarrassing to hear we do not even apply for available funds.
Mr. Duarte:
There is one other area of opportunity in which we have engaged Washoe and Clark counties, in administrative claims for school-based services. The administrative work involved in providing services to Medicaid children is also reimbursable, and we have a contract with Clark County for $17 million over 5 years to provide that type of administrative funding assistance.
Senator Rawson: We will ask staff to develop closing packets as quickly as possible. We need to get a figure a little earlier than in most sessions for our leadership and tax committees.
Nancy K. Ford, Administrator, Welfare Division, Department of Human Resources:
We distributed a handout, the “Nevada State Welfare Division Caseload Projection Update” (Exhibit D), prepared in response to legislative requests for information on caseloads for Food Stamps and for TANF, in particular. If you turn to page 2, you will see, as Mr. Duarte explained, we build our budgets in three different steps. The May 2002 projections, on which our agency request was built, were higher than the March 2003 projections. That one element will reduce our request for Electronic Benefit Transfer (EBT) costs for issuing Food Stamps. In addition, the EBT program is relatively new. It came online statewide July 1. Many of our projections were based upon anticipated costs as opposed to having data to support them. Our caseload estimates were reduced based upon actual experience in the last 6 months or so, as were our telephone costs.
The third page shows what the actual reductions are. The Executive Budget request for FY2004 was almost $2.5 million for issuing Food Stamps. As amended, it will be $2 million with a savings of $456,000. Of that, the next column shows the General Fund required. There will be General Fund savings of $228,000 for FY2004, and for FY2005 there will be General Fund savings of $233,646 based upon these changes and projections.
On the next page, under TANF adjustments, there were several changes. One was to correct our over-allocation of block grant. If you recall, in our base we had spent some reserve. When we built our budget, we counted the reserve as federal dollars available, but they are not available into the future. In addition, based upon our caseload projections, cash assistance expenditures have come down, the job retention incentives have come down a little, the New Employees of Nevada employment program has come down a little, Kinship Care has come down, and our work participation rates, M‑593 in the budget, has been adjusted based upon different cost assumptions.
The chart on page 5, which displays projected TANF caseloads, used to be referred to as the “smiley chart.” I do not know whether you want to call it that anymore, because it no longer looks like a smile. When we built our budgets, we built them based upon the caseload in April 2002. At that point, our caseloads were at their peak. Then when we prepared the Governor’s recommended budget, we were looking at the October 2002 caseloads, and you can see it had come down somewhat. We were starting to see a change. Now, we are looking at our caseloads for February 2003, and they are not coming down quite as quickly, but they are still dropping somewhat. That affects our projections, and that is why our projections have moderated.
Page 6 shows a diagram of TANF caseloads and how the caseloads for our agency request, the Executive Budget, and March projections have come down for FY2004 and FY2005. The last page provides more detail about where the changes actually came in as far as cash assistance and the work participation and how the “puts and takes” came out. If you look at the very top line where it says “General Fund in Lieu of TANF,” under the revenue column, and if you go across, Executive Budget, General Fund in Lieu of TANF, you will see the net is $43 million. If you go across under Revised for March Caseload, it is $38 million. It has come down about $5 million.
Assemblywoman Leslie:
On page 6, it appears in FY2004 you are indicating it will be 35,000, and you are projecting it would be 41,000 in FY2005, which is quite an increase.
Ms. Ford:
We were projecting 35,000 by the end of FY2004.
Assemblywoman Leslie:
Therefore, you believe it is going to go up, is that correct?
Ms. Ford:
Yes, we believe it will go up. One thing you need to keep in mind is this caseload is impacted by global events. You can see our caseloads were low, but after the hit on September 11, 2001, our caseloads skyrocketed.
Assemblywoman Leslie:
Are you projecting another September 11, 2001, type of event?
Ms. Ford:
It is not going to go up that fast. We are talking about reaching 35,000 by June 2004. It is a more gradual increase.
Assemblywoman Leslie:
The trend right now is down, but you are saying the trend is going to change and go up.
Ms. Ford:
The current trend is down, but based upon a statistical analysis and the methodologies we apply, we believe it will continue to go up over the next biennium.
Senator Rawson:
Let us pursue this. What are the drivers? Do we simply have to wait and react, or are there policies that can effect how much this goes up or down?
Ms. Ford:
We have implemented policies to cut back on TANF caseloads and expenditures, which we have done over the past biennium. If we want to maintain our current benefit levels, this is the projection we have. It is based upon the economy, the employment sector, and our population growth. We are going to continue to be a high-growth state in the next biennium
Senator Rawson:
One of these pages is either not updated, or we are headed in a direction we are not expecting. If you look at the chart on page 5, and if we project on the right side of that, your 2004 calculation is 35,400; that puts it up as high or higher than it has been anywhere on the chart. Therefore, within a year’s time you are showing us going right back up. Either that figure is not updated, or we have reason for concern.
Ms. Ford:
The figures are updated, but this is just the way the models work. They are still projecting an increase over that time. The average caseload for the year is 35,000.
Senator Rawson:
That is of even more concern. We think you are still going to overspend your reserve. We ought to look at the 35,000 figure to see whether we can adjust it as we close our budgets. We will have staff work closely with you on this. We do not want to see this go off the charts.
Ms. Ford:
We do not want to see it go off the charts either, but we do not want to cut ourselves short, given the situation in the world. Also, if there is ever another terrorist attack, my caseloads are going to be adversely impacted, because it is fragile at this point.
Senator Rawson:
We are facing that with every budget we have to close this session. Even though we know we have to raise revenue, there is a limit to the revenue.
Ms. Ford:
We have been working closely with LCB to try to resolve some of these issues. This is where we stand now based upon our caseload projections. The only other thing I would point out is that over the years since TANF came into existence, we have been able to build up a reserve of $22 million. As of the beginning of FY2002, we had a reserve of $22 million. That has been spent down through budget cuts and cutting back programs. We have been able to maintain some reserve to go into next fiscal year. It is anticipated that will also be gone, so we will no longer have a cushion to fall back on should there be another economic decline or if another problem occurs. Therefore, the committee may want to consider setting up the $5 million from the Governor’s recommended budget in a reserve account.
Senator Rawson:
When the economy is good, a reserve is maintained. When the economy is not good, we tend to go to contingency funds.
Assemblywoman Giunchigliani:
I have a question regarding the Kinship Care budget. Does anything under the Safe Families Act (SFA) allow for matching funds?
Ms. Ford:
The SFA goes through the Division of Child and Family Services (DCFS), and I am not familiar with that.
Assemblywoman Giunchigliani:
Did you get a budget back to us so we could decide whether we wanted to use General Funds?
Ms. Ford:
We submitted to LCB the projections for putting Kinship Care into a General Fund category of its own.
Assemblywoman Giunchigliani:
I noticed you are doing an income test for child care services for the program. For which other programs do we use a similar test?
Ms. Ford:
Because we spent the reserve in child care and have limited child care dollars, we are anticipating putting in some new eligibility factors. One of the things we are considering is applying an income test to non-needy caretaker and kinship care recipients. Currently they are automatically treated as being at 100 percent of poverty, so we pay 100 percent of their child care. One of the things we are considering is applying the same income test that we apply to the general population in determining eligibility for the program.
Assemblywoman Giunchigliani:
What would that test be?
Ms. Ford:
You would have to be below 75 percent of Nevada mean income, and if you are above 185 percent of need, then you are in a discretionary category. If you are below 185 percent of need, you are in the mandatory category.
Assemblywoman Giunchigliani:
Would that be based on your personal income, not any cash or assistance?
Ms. Ford:
That is correct. I am not sure what you wanted to talk about regarding child care. Child care is projected to be a flat-funded program at the federal level, and in the President’s budget for the upcoming biennium. It is maintained at the same level as 2002. In 2003, we had a $77,000 reduction in child care from the federal government, and the President’s budget has us flat-funded. The question I was responding to for Ms. Giunchigliani is that changes were anticipated to try to make sure we could provide child care to the most needy population.
Assemblywoman Leslie:
Is it not also that we had the $9.1 million problem? That is what we are wrestling with now.
Ms. Ford:
We have submitted an adjusted budget based for child care, and the $9.1 million was the reserve being carried forward from prior grant years. We anticipated it was going to carry forward into next year, but it was spent in FY2002 in order to prevent waiting lists. We then had to build a budget based upon what we anticipate our funding will be for 1 year.
Assemblywoman Leslie:
We have a report from staff of all the things you are going to implement that are major changes. I know we are down $9 million, so we have to do something. We have some scenarios on how much the waiting lists are going to grow because of these changes. How are the children on the waiting lists going to translate into more TANF cases? That is my biggest concern. Do you have a model to project for every 1000 children put on the waiting list for child care dollars? What does that translate to in the discretionary categories, in terms of increased services in other areas?
Ms. Ford:
Individuals in the discretionary category are unlikely to come to TANF because they are over 185 percent of need and will not need to income-test to come into TANF. If they were in the “at risk” category, below 185 percent of need, they would be eligible for TANF.
Assemblywoman Leslie:
With all these changes, you believe we will be able to meet the mandatory child care requirement. Is that correct?
Ms. Ford:
That is correct.
Assemblywoman Leslie:
So the people who are going to suffer from the mistake, or however you want to characterize it, are who? We have charts indicating as many as 3800 children could be in the at risk category, and 5700 could be in the discretionary category by FY2005.
Ms. Ford:
That was based upon projected growth rates, because we do not know exactly how that population is going to grow. We ran two different scenarios, one with a 1 percent growth rate, and one with a 4 percent growth rate. I want to make clear the child care changes are all suggestions. I am not saying we are going to implement them; I am saying they are under consideration. I also do not want to implement many changes that exceed the need so that we cut people off. We want to make sure we serve people. I believe the most important change is applying the income test to non-needy caretaker and kinship care, because those are people who may very well be able to afford their own child care.
Assemblywoman Leslie:
When are you going to have the public hearing?
Ms. Ford:
We are going to try to do it around June 18.
Assemblywoman Leslie:
The question I really want to understand is regarding the children on the waiting list. Who are those people? What types of families are not going to get child care because of these changes?
Ms. Ford:
These are mainly in the discretionary category, because we will serve the at-risk category before we serve the discretionary.
Assemblywoman Leslie:
These people are on the edge.
Ms. Ford:
They are below 185 percent of need, so they are at risk of coming into TANF. We want to serve that population, keep them off TANF, and encourage them to go into work activities as much as possible. They would be the ones we would serve first. The discretionary category is between 185 percent of need standard and 75 percent of Nevada mean income.
Assemblyman Goldwater:
On a slightly different subject, it does not sound to me as though federal government support is at the level we wished or needed in these budgets. Out of curiosity, do you use any of the army of lobbyists we have in Washington, D.C., and which ones do you use?
Ms. Ford:
Absolutely; Mike Piper and Ashley Carrigan have been quite helpful to us in maintaining contact with our congressional delegation, particularly in regard to the TANF block grant. We have been working with them to try to get an additional supplemental appropriation, based upon our population growth.
Assemblyman Goldwater:
What about our paid lobbyists? Evidently, we are swimming in transportation dollars, but we cannot seem to get even inflationary increases.
Jan Gilbert, Lobbyist, Northern Nevada Coordinator, Progressive Leadership Alliance of Nevada (PLAN):
During one of the previous hearings, the committee had talked about sending a letter to our congressional delegation. TANF reauthorization is still up in the air. The numbers are going to hurt our State enormously if what I see at the national level happens. I wondered whether it would be possible for you to advance that letter to urge them to keep federal TANF funding at current levels.
Senator Rawson:
There being no further questions or comments, the meeting is adjourned at 9:15 a.m.
RESPECTFULLY SUBMITTED:
Jo Greenslate,
Committee Secretary
APPROVED BY:
Senator Raymond D. Rawson, Chairman
DATE:
Assemblywoman Sheila Leslie, Chairman
DATE: