LEGISLATIVE BUDGET BOARD Austin, Texas FISCAL NOTE, 77th Regular Session March 7, 2001 TO: Honorable Mike Moncrief, Chair, Senate Committee on Health & Human Services FROM: John Keel, Director, Legislative Budget Board IN RE: SB184 by Zaffirini (Relating to services and programs provided under and eligibility for temporary assistance for needy families and for food stamps.), As Introduced ************************************************************************** * Estimated Two-year Net Impact to General Revenue Related Funds for * * SB184, As Introduced: negative impact of $(16,761,553) through * * the biennium ending August 31, 2003. * * * * 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 * * 2002 $(5,345,401) * * 2003 (11,416,152) * * 2004 (13,229,416) * * 2005 (13,898,964) * * 2006 (14,272,360) * **************************************************** All Funds, Five-Year Impact: *************************************************************************** *Fiscal Probable Probable Probable Probable * * Year Savings/(Cost) Savings/(Cost) Savings/(Cost) Savings/(Cost) * * from General from General from GR Match from GR Match * * Revenue Fund Revenue Fund for Medicaid for Medicaid * * 0001 0001 0758 0758 * * 2002 $974,971 $(1,272,226) $607,250 $(2,639,080) * * 2003 947,203 (2,046,426) 589,956 (4,806,073) * * 2004 874,488 (2,079,576) 544,666 (5,375,061) * * 2005 864,833 (2,073,516) 538,652 (5,549,418) * * 2006 862,727 (2,078,861) 537,341 (5,610,999) * *************************************************************************** Given the limited availability of Temporary Assistance for Needy Families (TANF) federal funds, for the purpose of this fiscal note General Revenue is assumed as the method of financing. Should additional TANF federal funds become available, $3,437,644 in FY 2002 and $6,510,140 in FY 2003 of General Revenue costs assumed above could be financed with TANF federal funds. Although funds to administer the Food Stamp program are appropriated in the state budget, Food Stamp benefits to clients are not. However, the estimated value of Food Stamp benefits would increase by $27.8 million in FY 2002, rising to $63.4 million in FY 2006. Food Stamp benefits are 100% federally funded. *********************************************************************** *Fiscal Probable Probable Probable Probable Change in * * Year Savings/ Savings/ Savings/ Savings/ Number of * * (Cost) from (Cost) from (Cost) from (Cost) from State * * GR MOE for GR MOE for Federal Federal Employees * * Temporary Temporary Funds - Funds - from FY 2001 * * Assistance Assistance Federal Federal * * for Needy for Needy 0555 0555 * * Families Families * * 0759 0759 * * 2002 $421,328 $1,582,221 24.0 * * $(3,437,644) $(4,857,255) * * 2003 409,328 (6,510,140) 1,537,158 (8,634,766) 94.0 * * 2004 377,905 (7,571,838) 1,419,154 (9,511,031) 113.0 * * 2005 373,733 (8,053,248) 1,403,485 (9,769,055) 116.0 * * 2006 372,823 (8,355,391) 1,400,067 (9,865,279) 117.0 * *********************************************************************** Technology Impact An estimated 280 hours of programming to modify the Generic Worksheet and Scheduler changes to accommodate telephone interviews at $110 per hour totals $30,800. Fiscal Analysis Sections 1 and 2 of the bill modify the definition of financial assistance to include "related services or programs" in addition to cash assistance. Section 3 of the bill would change TANF eligibility criteria regarding treatment of the value of vehicles to exclude the entire fair market value of one vehicle and the fair market value of any other vehicle up to $5000. Under Section 4 of the bill this standard would also be used in the Food Stamp program--a state option in new federal legislation (Public Law 106-387). Section 4 allows the department to conduct a recertification interview for Food Stamp recipients by telephone, provided the recipient and all household members are elderly or disabled and have no earned income, or the recipient is subject to hardship that includes a work or training schedule preventing personal appearance, transportation difficulties, residence in a rural area, prolonged, severe weather, illness, or a need to care for other household members. Such recipients would be required to have at least one face-to-face interview per year. All provisions would be effective September 1, 2001. Methodology Sections 1 and 2 would make persons receiving TANF services categorically eligible for Food Stamps. It is assumed that 60% of applicants will be denied for not showing up for interviews or not providing information, and that half of those denied have a child. Section 3 expands eligibility for TANF, which thereby extends Medicaid coverage. It is assumed that 80% of 320 TANF applicants per month denied assistance due to resources are attributable to the current vehicle limits. A 91% retention rate for TANF cases is assumed, resulting in the following additional TANF cases: 1,530 in FY 2002, 2,917 in FY 2003, 3,369 in FY 2004, 3,516 in FY 2005, and 3,564 in FY 2006. The average TANF grant per case is estimated to be $155.33 per month, rising 3% per year to remain at 17% of the federal poverty level. For Medicaid purposes, children would have been eligible under non-TANF categories, so the impact of the increase in the vehicle limit on the Medicaid program is assumed to be one adult in each of the additional TANF cases. Medicaid costs reflect insured services, cost-reimbursed services, vendor drug and medical transportation. Federal Medicaid reimbursements included above total $3.4 million in FY 2002, $6.3 million in FY 2003, $7.2 million in FY 2004, $7.4 million in FY 2005 and $7.5 million in FY 2006. Section 4 expands eligibility for Food Stamps. It is assumed that 80% of 2000 Food Stamp applicants per month denied benefits due to resources are attributable to the current vehicle limits. A 91% retention rate for Food Stamp cases is assumed. The average Food Stamp grant per case is estimated at $206.05 per month, increasing 2% per year for cost of living adjustments. For telephone recertifications, it is assumed that approximately half of Food Stamp cases meet the criteria, and that 7% of these would not be impacted by the bill (because they have a 12-month certification period), 38% would have one telephone interview a year (because they have a 6-month review schedule), and about 55% would have three telephone interviews a year (because they average a 3-month review schedule). It is assumed that about 20% do not complete the telephone interview and have a face-to-face interview instead. Net savings of about 11.5 minutes per case are estimated. Local Government Impact No significant fiscal implication to units of local government is anticipated. Source Agencies: 320 Texas Workforce Commission, 324 Texas Department of Human Services, 501 Texas Department of Health LBB Staff: JK, HD, KE