LEGISLATIVE BUDGET BOARD Austin, Texas FISCAL NOTE, 76th Regular Session May 14, 1999 TO: Honorable Elliott Naishtat, Chair, House Committee on Human Services FROM: John Keel, Director, Legislative Budget Board IN RE: SB13 by Zaffirini (Relating to the consideration of income earned by certain recipients of Temporary Assistance for Needy Families benefits for eligibility determination purposes.), As Engrossed ************************************************************************** * Estimated Two-year Net Impact to General Revenue Related Funds for * * SB13, As Engrossed: negative impact of $(7,094,588) through the * * biennium ending August 31, 2001. * * * * The bill would make no appropriation but could provide the legal * * basis for an appropriation of funds to implement the provisions of * * the bill. * ************************************************************************** General Revenue-Related Funds, Five-Year Impact: **************************************************** * Fiscal Year Probable Net Positive/(Negative) * * Impact to General Revenue Related * * Funds * * 2000 $0 * * 2001 (7,094,588) * * 2002 (6,949,800) * * 2003 (6,805,013) * * 2004 (6,370,650) * **************************************************** All Funds, Five-Year Impact: ************************************************************************** *Fiscal Probable (Cost) to Probable (Cost) to Probable (Cost) to * * Year General Revenue Fund Federal Funds Federal Funds (TANF) * * (Medicaid Match) (Medicaid) 0555 * * 0001 0555 * * 2000 $0 $0 $(24,286,500) * * 2001 (7,094,588) (11,096,663) (23,040,000) * * 2002 (6,949,800) (10,870,200) (22,560,000) * * 2003 (6,805,013) (10,643,738) (21,120,000) * * 2004 (6,370,650) (9,964,350) (21,120,000) * ************************************************************************** Technology Impact The bill would require approximately 7,300 hours of programming to information systems at the Department of Human Services (DHS). At $105 per hour, programming would total $766,500. Fiscal Analysis The bill would amend Section 31.0038 of the Human Resources Code, requiring DHS to increase the earned income disregard to 100 percent during the first six months a family (receiving financial assistance) has earned income. This would increase the average monthly number of Temporary Assistance for Needy Families (TANF) recipients. The bill could help to reduce the phenomenon of families cycling on and off the TANF rolls by establishing a longer transition period to financial independence. The bill would increase the average monthly number of adults receiving Medicaid benefits. (No change in the number of children receiving Medicaid benefits is assumed, as children losing TANF benefits are likely to qualify for Medicaid benefits under another category.) Adults who stay on the TANF rolls longer because of the new earned income disregard would also receive Medicaid benefits for a longer period. However, the impact to the Medicaid program would be delayed by twelve months--the length of time adults who leave the TANF rolls are provided transitional Medicaid benefits. Methodology Assumptions related to the TANF Grant provided by DHS: 1) The number of average monthly recipients (adults and children) would increase by 24,500 in fiscal year 2000, 24,000 in 2001, 23,500 in 2002, and 22,000 in each subsequent year. 2) The additional average monthly recipients would receive an average monthly grant of $80. 3) One-time programming changes would cost $766,000 in fiscal year 2000. 4) It is assumed all costs would be paid with TANF federal funds. Assumptions related to Medicaid benefits provided by the Department of Health: 1) Adults represent approximately one-third of the additional TANF recipients. As previously noted, there would be a one year lag between the impact to the TANF program and the impact to the Medicaid program. Therefore, the average monthly number of Medicaid clients would increase by approximately 8,085 in fiscal year 2001, 7,920 in 2002, 7,755 in 2003, and 7,260 in 2004. 2) The average monthly Medicaid benefit (prescriptions and premium) would total $187.50. 3) Approximately 39 percent of costs would be paid with general revenue, and 61 percent with matching federal funds. Local Government Impact No significant fiscal implication to units of local government is anticipated. Source Agencies: 324 Department of Human Services LBB Staff: JK, TP, BB, PP