Honorable Charles Schwertner, Chair, Senate Committee on Health & Human Services
FROM:
Ursula Parks, Director, Legislative Budget Board
IN RE:
HB4 by Burkett (Relating to monetary assistance provided by the Department of Family and Protective Services to certain relative or designated caregivers; creating a criminal offense; creating a civil penalty.), As Engrossed
Estimated Two-year Net Impact to General Revenue Related Funds for HB4, As Engrossed: a negative impact of ($34,492,426) through the biennium ending August 31, 2019.
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 Year
Probable Net Positive/(Negative) Impact to General Revenue Related Funds
2018
($17,070,152)
2019
($17,422,274)
2020
($17,794,909)
2021
($17,989,077)
2022
($18,888,589)
Fiscal Year
Probable Savings/(Cost) from General Revenue Fund 1
Probable Savings/(Cost) from GR Match For Title IV-E FMAP 8008
Probable Savings/(Cost) from Federal Funds 555
2018
($19,511,973)
$2,441,821
$4,177,119
2019
($19,862,704)
$2,440,430
$4,372,793
2020
($20,239,497)
$2,444,588
$4,386,958
2021
($20,427,108)
$2,438,031
$4,375,192
2022
($21,326,620)
$2,438,031
$4,375,192
Fiscal Analysis
The bill would amend the payment structure for caregiver assistance payments entered into by the Department of Family and Protective Services (DFPS) with relative and other designated caregivers. Instead of providing a uniform annual payment, the bill would require a payment of up to 75 percent of the daily basic foster care rate for caregivers with income less than or equal to the federal poverty level (FPL), up to 50 percent of the daily basic foster care rate for caregivers with income greater than FPL but less than or equal to 200 percent FPL, up to 25 percent of the daily basic foster care rate for caregivers with income greater than 200 percent FPL but less than or equal to 300 percent FPL, and a one-time payment of up to $1,000 and annual payments thereafter of up to $500 for caregivers with income above 300 percent FPL but less than or equal to 500 percent FPL. Payments would be eliminated for caregivers with income above 500 percent FPL. Any caregiver with income up to 300 percent FPL who entered into an agreement on or after June 1, 2017 but before the effective date of the bill and received monetary assistance would not begin receiving additional payments until the previous payment had been offset. The bill would also allow a caregiver with income less than or equal to 300 percent FPL who entered into a caregiver assistance agreement with DFPS and obtained permanent managing conservatorship prior to the effective date of the bill to continue to receive the $500 annual reimbursement until the earlier of the third anniversary of being awarded permanent managing conservatorship or the child's 18th birthday.
The bill creates a criminal offense (state jail felony or felony of the third degree if a repeat offense) and civil penalty for persons knowingly entering into a fraudulent caregiver assistance agreement. The bill would require the attorney general to bring an action to recover a civil penalty authorized by the bill. The commissioner of DFPS would be authorized to adopt rules necessary to determine if a violation had occurred.
Methodology
The actual number of children who might be diverted from paid foster care is not known. The estimated cost of this legislation is based on the assumptions outlined below, but costs could be higher or lower depending on actual placements. If the percentage of basic level of care children were higher or children were diverted from other, higher cost, levels of care savings would be increased. For example, if 45 percent of children were diverted from paid foster care the savings would be sufficient to offset all other costs to General Revenue Funds of the bill beginning in fiscal year 2018.
According to DFPS, 70 percent of children in a placement resulting in relative caregiver monetary assistance payments are placed with families having an income up to 300 percent FPL. Of these families, 29 percent have an income at or below FPL, 38 percent have an income greater than FPL but less than or equal to 200 percent FPL, and 33 percent have an income greater than 200 percent FPL but less than or equal to 300 percent FPL. Based on these distributions, the number of projected recipients of monetary assistance payments under the current structure, and an assumed payment duration of eighteen months, the following is assumed: (1) 2,368 average monthly caregivers in fiscal year 2018 will receive a daily payment of $17.33 (75 percent of the current daily basic foster care rate) increasing each year to 2,719 average monthly caregivers by fiscal year 2022, (2) 3,078 average monthly caregivers in fiscal year 2018 will receive a daily payment of $11.55 (50 percent of the current daily basic foster care rate) increasing each year to 3,534 average monthly caregivers by fiscal year 2022, and (3) 2,723 average monthly caregivers in fiscal year 2018 will receive a daily payment of $5.78 (25 percent of the current daily basic foster care rate) increasing each year to 3,127 average monthly caregivers by fiscal year 2022. After accounting for savings from no longer making the current annual payments to these caregivers and the required offset for agreements entered into from June to August of 2017, the estimated cost under the new structure of payments to families with income up to 300 percent FPL is $25.1 million in General Revenue Funds in fiscal year 2018 increasing to $29.6 million in General Revenue Funds by fiscal year 2022.
It is assumed the bill would have no effect on the cost of payments for the estimated 14 percent of children placed with families with income above 300 percent but not greater than 500 percent of FPL. It is assumed the remaining 16 percent of children reside in homes with income above 500 percent FPL and no payments would be made for those placements resulting in a savings of $5.1 to $5.2 million in General Revenue Funds in each of fiscal years 2018 through 2022.
It is assumed the new payment structure will increase placements of children with relatives who will receive monetary assistance, reducing paid foster care placements. It is assumed 10 percent of foster care children at the basic level of care will be diverted to the relative caregiver program with the same distribution by FPL as for existing recipients. It is assumed this will result in the following estimated increases: (1) 270 average monthly recipients of the $17.33 daily payment in fiscal year 2018 increasing to 274 average monthly recipients by fiscal year 2022, (2) 351 average monthly recipients of the $11.55 daily payment in fiscal year 2018 increasing to 356 average monthly recipients by fiscal year 2022, and (3) 311 average monthly recipients of the $5.78 daily payment in fiscal year 2018 increasing to 315 average monthly recipients by fiscal year 2022. The total estimated cost of these new payments is estimated to be $3.8 million to $3.9 million in General Revenue Funds in each of fiscal years 2018 to 2022. The estimated savings to paid foster care for these children, assuming the projected weighted average daily rate across placement types, is $13.7 to $13.8 million in All Funds, including $9.4 million in General Revenue Funds and $4.3 to $4.4 million in Federal Funds, in each of fiscal years 2018 to 2022. The net savings to General Revenue Funds for children diverted from paid foster care to a relative placement is estimated to be $5.5 million in each of fiscal years 2018 to 2022.
It is assumed allowing certain caregivers to continue to receive the annual $500 reimbursement payment after obtaining permanent managing conservatorship will result in 4,932 additional payments in fiscal year 2018 and an estimated cost of $2.5 million in General Revenue Funds, 2,466 additional payments in fiscal year 2019 and an estimated cost of $1.2 million in General Revenue Funds, and 1,233 additional payments and an estimated cost of $0.6 million in General Revenue Funds in fiscal year 2020. No additional payments are assumed after fiscal year 2020 because payments are limited to three years for those caregivers obtaining permanent managing conservatorship prior to September 1, 2017.
This analysis assumes the provisions of the bill addressing felony sanctions for criminal offenses would not result in a significant impact on state correctional agencies. This analysis assumes no increase in fraud cases and no significant fiscal impact to HHSC for the Office of Inspector General. It is assumed there would be no significant fiscal impact to DFPS from provisions authorizing the commissioner to adopt rules.
According to the Office of the Attorney General, Office of Court Administration, and Texas Judicial Council, any additional work resulting from the passage of this bill could be absorbed within current resources.
DFPS estimates a one-time cost of $250,000 in All Funds, including $125,000 in General Revenue Funds, in fiscal year 2018 for modifications to the IMPACT system to allow payments to be processed under the new structure. This analysis assumes IMPACT upgrades are completed in a timely manner. The agency may need to employ temporary employees for manual payment processing if modifications are delayed. This analysis does not reflect any cost for those temporary employees.
The net estimated cost of the bill is $12.9 million in All Funds, including a cost of $17.1 million in General Revenue Funds and a savings of $4.2 million in Federal Funds, in fiscal year 2018 with the cost expected to increase each year due to caseload growth, reaching $14.5 million in All Funds, including a cost of $18.9 million in General Revenue Funds and a savings of $4.4 million in Federal Funds, by fiscal year 2022.
Technology
There would be a one-time cost of $250,000 in All Funds, including $125,000 in General Revenue Funds for modifications to the IMPACT system.
Local Government Impact
No significant fiscal implication to units of local government is anticipated.
Source Agencies:
530 Family and Protective Services, Department of, 212 Office of Court Administration, Texas Judicial Council, 302 Office of the Attorney General, 529 Health and Human Services Commission, 696 Department of Criminal Justice