LEGISLATIVE BUDGET BOARD Austin, Texas FISCAL NOTE, 76th Regular Session May 10, 1999 TO: Honorable Elliott Naishtat, Chair, House Committee on Human Services FROM: John Keel, Director, Legislative Budget Board IN RE: SB666 by Zaffirini (Relating to exemptions from work or employment activity participation requirements for certain Temporary Assistance for Needy Families (TANF) recipients.), As Engrossed ************************************************************************** * Estimated Two-year Net Impact to General Revenue Related Funds for * * SB666, As Engrossed: positive impact of $0 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 0 * * 2002 450,727 * * 2003 991,600 * * 2004 1,747,435 * **************************************************** All Funds, Five-Year Impact: *************************************************************************** *Fiscal Probable Probable Probable Probable (Cost) * * Year Savings to Savings to Savings to to Federal * * General Revenue Federal Funds Federal Funds Funds (TANF) * * Fund (Medicaid (Medicaid) (TANF) 0555 * * Match) 0555 0555 * * 0001 * * 2000 $0 $0 $0 $(6,885,237) * * 2001 0 0 320,517 (15,147,522) * * 2002 450,727 704,984 705,138 (26,693,534) * * 2003 991,600 1,550,964 1,242,621 (26,693,534) * * 2004 1,747,435 2,733,168 1,242,621 (26,693,534) * *************************************************************************** Fiscal Analysis The bill would amend Section 31.012 of the Human Resources Code, altering an exemption from work or employment activity participation requirements for certain recipients of the Temporary Assistance for Needy Families (TANF) grant. The bill would incrementally lower the age of the youngest child--beginning January 1, 2000--for the exemption for caring for a child. Limiting the exemption from work or employment activity participation requirements would increase the number of individuals who exhaust their grant benefits due to time-limits, but increase the number of clients who qualify for child care and employment services. Thus, savings at the Department of Human Services (and at the Department of Health for Medicaid benefits) would be offset by increased costs at the Workforce Commission. (This fiscal note was prepared without the benefit of a timely response from the Workforce Commission.) Limiting the exemption from work or employment activity participation requirements would increase the number of TANF cases in the federal participation denominator, and could make it more difficult to meet the work participation rate requirement. Failure to meet the work participation requirement could result in a reduction in the state's TANF block grant. Methodology Savings in TANF Grants (DHS): The bill would decrease the number of adult recipients by 514 in 2001, 1,130 in 2002, 1,991 in each subsequent year. At an average monthly benefit of $52, this would result in a savings of $320,138 in 2001, $705,138 in 2002, and $1,242,621 in each subsequent year. It is assumed any savings would impact TANF Federal Funds. Savings in Medicaid benefits (Department of Health): The bill would decrease the number of Medicaid clients by 514 in fiscal year 2002, 1,130 in 2003, and 1,991 in 2004. At an average monthly benefit (premium plus prescription drugs) of $187.50, this would result in a savings of $1,155,711 in fiscal year 2002, $2,542,565 in 2003, and $4,480,603 in 2004. Approximately 39 percent of savings would impact General Revenue, and 62 percent would impact matching Federal Funds. Costs in Child Care and Employment Services (Workforce Commission): The bill would increase the number of adults needing employment services by 514 in fiscal year 2000, 1,130 in 2001, and 1,991 in each subsequent year. At an average annual cost of $750, this would result in costs totaling $385,237 in fiscal year 2000, $847,522 million in 2001, and $1,493,543 in each subsequent year. The bill would increase the number of children needing child care by 1,557 in fiscal year 2000, 3,424 in 2001, 6,034 in each subsequent year. At an average annual cost of $4,176 per child, this would result in costs totaling $6.5 million in fiscal year 2000, $14.3 million in 2001, $25.2 million in each subsequent year. It is assumed that costs for employment services and child care would be paid with TANF Federal Funds. Local Government Impact No significant fiscal implication to units of local government is anticipated. Source Agencies: 324 Department of Human Services, 301 Office of the Governor, 320 Texas Workforce Commission LBB Staff: JK, TP, PP