LEGISLATIVE BUDGET BOARD
Austin, Texas
FISCAL NOTE
74th Regular Session
April 19, 1995
TO: Honorable Judith Zaffirini, Chair IN RE: Committee Substitute
Committee on Health & Human Services for House
Senate Bill No. 1863
Austin, Texas
FROM: John Keel, Director
In response to your request for a Fiscal Note on House Bill No.
1863 (relating to the provision of services and other assistance
to needy people, including health and human services and
assistance in becoming self-dependent) this office has determined
the following:
The bill would make no appropriation but could provide the legal
basis for an appropriation of funds to implement the provisions
of the bill.
The bill would make a number of changes to current policies for
recipients of services through the Aid to Families with Dependent
Children (AFDC) program and would require greater participation
in Title IV-A Emergency Assistance and Medicaid programs. This
bill would implement many of the recommendations found in two of
the Comptroller's recent reports: Partnership for Independence
and Gaining Ground. It should be noted that the fiscal
implications of implementing the provisions of this bill are
based on current federal law; in the event that block grant
awards of federal funds are made, these estimates would not be
valid.
Provisions which would increase costs for the State include:
* Section 1.04 would require the Department of Human
Services to raise the resource limits in the AFDC program to
correspond to those resources stipulated for the Food Stamp
Program. Based upon the historical number of applications and
cases denied because they exceed the current resource limit, a
projection was made of the number of cases that would be added if
the limits were raised. This policy change would have an impact
of adding an estimated 300 families to the AFDC caseload. Any
administrative savings due to the reduction in complexity of
regulations for caseworkers cannot be estimated. Costs
associated with this section correspond to AFDC and Medicaid
benefits.
* Section 1.06 through 1.09 would encourage financial
independence for many people with disabilities through the use of
supported employment. By obtaining SSI and SSI work incentives
for more people with disabilities, more vocational funds would be
made available to help people move into support work
environments. However, these potential gains in funds cannot be
determined. Costs would accrue to the State due to the creation
of a social services administrator position at the Texas
Rehabilitation Commission.
* Section 1.11 would require the Department of Human
Services to establish a pilot program which would assist AFDC
clients in achieving self-sufficiency by either using a form of
"fill-the-gap" budgeting or extending transitional benefits for
24 months. For the purpose of this fiscal note, it is assumed
that the pilot will test "fill-the-gap" budgeting. This
provision will require a federal waiver and it is assumed that it
will be granted by March 1996. The pilot would be limited to
2,000 families which would be phased in according to assumed an
employment entry rate of 20%. In fiscal year 1996, an average of
620 cases per month would be in the pilot; 1,800 in 1997; 2.000
in 1998 and 1999. The additional AFDC payment was assumed to be
equal to $37 per month per family. Costs in this fiscal note
relate to increased grant benefits and to increased number of
staff. The pilot ends on September 1, 1999.
* Section 2.05 would require the Health and Human Services
Commission to assist AFDC recipients who are eligible for
assistance under federal programs to apply for benefits under
those federal programs. The costs of the program is estimated at
$500,000 per year.
* Section 2.08 would establish a pilot program for families
in crisis. It was assumed that this pilot would have a total of
1,000 families. Clients who had been approved for AFDC would be
offered the option of receiving a one-time cash assistance
payment in lieu of going on the AFDC rolls. The maximum cash
assistance grant was assumed to equal $1,000 (average family
grant times 6 months). The program would cover various types of
emergencies. Clients would be precluded from receiving AFDC for
one year. This provision would require a federal waiver. In
terms of AFDC grant benefits, the pilot is assumed to be cost-
neutral. It was assumed that the department would incur some
administrative costs related to programming automated systems
which support the AFDC program. The pilot would end September 1,
1999.
* Section 2.10 would require the Department of Human
Services to apply for a federal waiver to eliminate the work
history and 100 hour rules that apply to the AFDC-UP program.
Based upon the historical applications and cases denied because
of this policy, a projection was made of the number of cases that
would be added if the current policy was waived. Costs related
to these provisions correspond to increased number of staff,
increased AFDC and Medicaid benefits.
* Section 3.02 would require the Inspector General at the
Department of Human Services to compile and disseminate accurate
information and statistics regarding fraud prevention and fraud.
DHS would publicize successful fraud prosecutions and establish
and promote a toll-free hotline for reporting suspected fraud.
DHS would establish interstate information sharing agreements,
verify automobile information and establish computerized matching
to prevent an incarcerated individual from illegally receiving
public assistance. DHS would evaluate the costs and benefits of
the five-day time limit prescribed for the investigation of fraud
prevention referrals and lower the criteria for acceptance of
fraud investigation. Implementation of this section would
require a number of new staff: 99 (1996); 104 (1997); 107
(1998); 112 (1999); 115 (2000).
Section 3.02 would also require the electronic benefits transer
(EBT) contractor to report copies of client transactions each
month. In the event that the capabilities to detect fraud and
abuse are increased, administrative reviews and fair hearings may
also increase. However, no estimates of increased cost have been
included.
* Section 3.08 would require the Department of Human
Services to operate a pilot program in Harris County to prevent
welfare fraud by using a type of fingerprint imaging for
applicant and recipients of AFDC. The cost estimates are based
on information from the Department of Public Safety on the cost
of using "Live Scan" fingerprint devices. It is assumed that 10
additional DHS employees would be needed to operate the imaging
equipment and to forward the images to DPS in Austin where
central processing would occur. It is also assumed that DPS
would add 3 FTE's. The pilot must be in place by January 1, 1996
and will be in operation for 36 months.
* Section 4.01 would amend the eligibility requirements of
the Title IV-A Emergency Assistance plan to include mental health
emergencies. The bill would require the Department of Mental
Health and Mental Retardation to enter into an interagency
agreement with DHS which would require MHMR to certify nonfederal
expenditures to claim federal reimbursement. Costs would be
incurred related to the administration of the program.
* Section 4.02 would require the Texas Commission on
Alcohol and Drug Abuse and DHS to amend eligibility requirements
of the State's Title IV-A Emergency Assistance plan to include
either a child or an adult caretaker of the child who needs
chemical dependency treatment. Administrative costs would be
incurred to implement this provision.
* Article 6 acknowledges the probable need for federal
waivers and the requirement that the State evaluate the costs
and benefits of pilot projects. It is estimated that the
evaluations will cost $100,000 each year.
Provisions which would provide savings to the State include:
* Section 2.05 would provide savings related to AFDC costs
due to movement of AFDC recipients into SSI categories according
to the Comptroller estimates.
* Section 2.07 requires that the Department of Human
Services establish a time-limited benefits pilot program that
limits the amount of time a person can receive assistance to a
cumulative total of 24 months. It was assumed that this policy
would affect only those adult recipients who had completed the
JOBS program. For those caretakers with a child under the age of
one, the calculation of the time limits would not begin until the
child reached age one. The estimates assume that the program
would be operational by January 1, 1996 in three pilot sites
(e.g., Tarrant , Travis and Lubbock counties) and that AFDC
caseloads would be lower by 45 cases per month in 1999 (8 month
average) and by 87 cases per month in 2000. The bill would
require that the caretaker and children on the case be denied as
time limits are reached.
* Section 4.01 would provide savings to the State (and
provide additional revenue to local communities) related to
increased receipt of federal funding for mental health services
through the Title IV-A Emergency Assistance program according to
Comptroller estimates.
* Section 4.02 would provide savings related to chemical
dependency treatment for children or an adult caretaker through
the Title IV-A Emergency Assistance Program according to
Comptroller estimates.
* Section 4.03 would implement Texas Performance Review
recommendations related to maximization of federal funding for
costs incurred on behalf of children in the conservatorship of
the State and placed in the home of a relative. Comptroller
estimates of net savings correspond to an assumption that a
Medicaid State Plan Amendment will be approved and implemented
within the next 90 days.
Provisions that would have a fiscal impact on local governments
according to the Comptroller of Public Accounts include:
* Section 1.10 would provide federal reimbursement to local
school districts for increased services for teen parents. School
districts would use existing district funds to draw down Title
IV-A JOBS federal funds. Comptroller estimates project $10.0
million gain in 1996; $16.0 million each year thereafter.
* Section 2.01 would establish the Educate Texas Program to
provide adult education and certain other services to AFDC
recipients. Comptroller estimates project net gains in federal
funds to local governments: $5,774,000 in 1996; $11,547,000 each
year thereafter.
* Section 2.05 would allow Texans to receive SSI benefits
and thereby bring in new federal dollars according to Comptroller
estimates: $0.8 million in 1996; $15.8 million in 1997; $37.1
million in 1998; $63.8 million in 1999; and $92.2 million in
2000.
The probable fiscal implication of implementing the provisions of
the bill during each of the first five years following passage
is estimated as follows:
Fiscal Probable Cost Out Probable Savings Probable Cost Out
Year of General to General of Federal Funds
Revenue Fund 001 Revenue Fund 001 555
1996 $4,902,639 $6,201,000 $5,352,837
1997 5,106,942 12,722,000 8,355,086
1998 6,136,606 14,581,000 7,662,316
1999 6,088,618 16,601,013 7,664,940
2000 5,511,357 18,638,984 6,814,143
Fiscal Probable Savings Change in
Year to Federal Funds Number of State
555 Employees from
FY 1995
1996 $0 116.0
1997 0 138.0
1998 0 142.0
1999 34,109 141.0
2000 98,996 120.0
Similar annual fiscal implications would continue as long as the
provisions of the bill are in effect.
Source: Comptroller of Public Accounts, Department of Human
Services,
Department of Public Safety, Department
of Protective and Regulatory Services,
Commission on Alcohol and Drug Abuse,
Mental Health and Mental Retardation,
Department of Health
LBB Staff: JK, AZ, DF