LEGISLATIVE BUDGET BOARD
Austin, Texas
FISCAL NOTE
75th Regular Session
May 17, 1997
TO: Honorable Judith Zaffirini, Chair IN RE: House Bill No. 2777, Committee Report 2nd House, Substituted
Committee on Health & Human Services By: Junell
Senate
Austin, Texas
FROM: John Keel, Director
In response to your request for a Fiscal Note on HB2777 ( Relating
to the eligibility determination and service delivery by health
and human service agencies, the Texas Workforce Commission and
other agencies.) this office has detemined the following:
Biennial Net Impact to General Revenue Funds by HB2777-Committee Report 2nd House, Substituted
Implementing the provisions of the bill would result in a net
negative impact of $(3,004,598) to General Revenue Related Funds
through the biennium ending August 31, 1999.
The bill would make no appropriation but could provide the legal
basis for an appropriation of funds to implement the provisions
of the bill.
Fiscal Analysis
The bill would require the Health and Human Services Commission
to develop and implement a plan for the integration of eligibility
determination functions and service delivery by health and human
services agencies, the Workforce Commission and other agencies
in consultation and coordination with the Legislative Budget
Board, and subject to approval of the Governor. The bill would
authorize the commission to utilize the staff and resources
of agencies whose programs are included in the plan.
The
bill would authorize the commission to contract for implementation
for part or parts of the plan upon receipt of any necessary
federal approval, subject to the approval of the Legislative
Budget Board and Governor. The bill would authorize financing
through the issuance of bonds or obligations pursuant to Article
601d, V.A.C.S. for the design, development, and operation of
an automated data processing system to support the eligibility
determination and service delivery plan.
The bill would authorize
the commission to use resulting savings to further develop the
integrated system and to provide other health and human services
subject to any spending limitation in the General Appropriations
Act.
Methodolgy
1. Consultant Costs: Estimates provided by the Health and
Human Services Commission assume that funding will be shifted
from the Department of Health, Department of Human Services
and Workforce Commission during the 1998-99 biennium to fund
the consultant costs related to the development of the plan.
Estimated general revenue costs of management consultants
in the 1998-99 would total $4.25 million (with an equal amount
of matching federal funds) and be funded by TDH, DHS and TWC.
HHSC assumes that these contracts will be funded through savings
related to streamlining of work processes rather than by new
funding. Consultants would be responsible for management and
process engineering, legal assistance, policy development, and
independent validation and verification.
2. Additional HHSC
Staff: The Commission would hire three new employees; an associate
commissioner, systems analyst, and attorney. Costs to the state
for these employees would be $264,700 the first year and approximately
$245,000 in subsequent years. It is assumed that the positions
would be funded equally with state and federal monies.
3.
Additional costs for plan development would be paid through
existing resources for items such as site readiness preparation,
public outreach, employee training, lease close-outs, automation
procurement development for the Request for Proposal and system
specifications. During the 2000-01 biennium, systems development
and automation would be financed with bonds and redirected savings.
4. System acquisition is assumed to be financed through bonds
or the Master Lease Program. The first bond issuance of $30
million would require debt service payments of $2.75 million
in fiscal year 1999. Debt service in subsequent years would
be $5.5 million annually. A second bond issuance of $40 million
would require debt service of $3.66 million beginning in fiscal
year 2000 with debt service of $7.3 million annually in subsequent
years. HHSC assumes that the debt will be retired with general
revenue funds, although federal matching funds may be available
for a portion of the debt.
5. Savings: According to the Health
and Human Services Commission, the integration of eligibility
determination and service delivery would identify some overlap
which could require closure of some offices and some reduction
in state employees. HHSC estimates that by fiscal year 2002,
the number of offices could be reduced by 35 percent and the
number of employees could be reduced by 33 percent. Further,
HHSC estimates that savings could total $125 million annually
in all funds when the system is implemented statewide.
The probable fiscal implications of implementing the provisions
of the bill during each of the first five years following passage
is estimated as follows:
Five Year Impact:
Fiscal Year Probable Probable Change in Number
Savings/(Cost) Savings/(Cost) of State
from General from Federal Funds Employees from
Revenue Fund FY 1997
0001 0555
1998 ($132,351) ($132,351) 3.0
1998 (2,872,247) (125,126) 3.0
2000 (9,282,697) (125,626) 3.0
2001 (12,944,526) (124,626) 3.0
2002 (12,943,526) (126,626) 3.0
Net Impact on General Revenue Related Funds:
The probable fiscal implication to General Revenue related funds
during each of the first five years is estimated as follows:
Fiscal Year Probable Net Postive/(Negative)
General Revenue Related Funds
Funds
1998 ($132,351)
1999 (2,872,247)
2000 (9,282,697)
2001 (12,944,526)
2002 (12,943,526)
Similar annual fiscal implications would continue as long as
the provisions of the bill are in effect.
No significant fiscal implication to units of local government
is anticipated.
Source: Agencies: 529 Health and Human Services Commission
LBB Staff: JK ,BB ,AZ