COMMITTEE ON BUDGET AND APPROPRIATIONS
MINUTES
ATTENDANCE:
B & A MEMBERS: Wishnie, Carsky, Mosiello, Kaplowitz, LaMotte, Swanson, Young, Abinanti
OTHERS: Budget Dept.: Kate Carrano, Leslie Bennett, Diane Nolan; CBAC: George Hosey; C.E.’s Office: William Randolph, BOL: Chris Chang, Robert Boland, Sally Schecter, Barbara Dodds; LWVW: Jo Brill: Dept of Social Services: Commissioner Mahon, Olivia Rhodes, Bill Travers, Fred Broege, Dennis Pachard
Chairman Wishnie called the meeting to order at 10:10 a.m.
Discussion: (There is a tape on file for more information)
Minutes: On motion of Legislator Carsky, seconded by Legislator Young, the minutes of September 13, 1999 were approved by an 8-0 vote.
Chairman Wishnie opened the meeting by introducing the Commissioner of the Department of Social Services. The Commissioner of Social Services, Kevin Mahon, came before the Committee to discuss the status of the Department and the impact of the State’s actions on the department’s budget.
Commissioner
Mahon discussed the fiscal impact of what is going on in Washington and how it
will affect the State of New York and more specifically its impact on
Westchester County’s is on the
Department of Social Services. as they pass their budget.
Mr. Mahon handed out a Budget Status Report to the Committee, where the impact
to the tax levy for 1999 and the potential hit for 2000 is summarized.
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The
Department was very successful in meeting their goals and objectives, which
were saving money and putting people to work. However, when the State budget passed and the Federal budget passed those
funds rapidly disappeared.
Last year
in the Ag Act there were a number of Acts,
but the one that was the
most of
interest to the Department was a different methodology of claiming food stamp
administrative costs. Two years after the Federal Government passed the
TANF Bill they went back and decided to take a look at that bill and decided
that because they went to a block grant and because of the way that we claim
for administrative costs, using the primary program method,
that in fact they over paid the States. They passed the legislation and
passed that cost onto the states. New York State chose to pass that total
cost onto the Counties. Also in this year’s president’s budget bill the
same thing will be done with the Medicaid administrative costs. The net
cost to the County this year is $3.4 Million for food stamps; the estimated
cost per year if the Medicare costs goes through is $2.8 Million and that is
tax levy hit.
Chairman Wishnie asked if it would be in the 1999 budget.
Mr. Mahon
responded that the $3.4 Million is in the 1999 budget in addition to and a portion of the $2.8
Million will be in 1999
because of the Federal Government’s fiscal year. This will probably come
out to be in the neighborhood of $700,000 but in year 2000 we would realize the
full brunt of $2.8 Million Dollars.
Legislator LaMotte asked if that was instead of the $3.4 Million.
Commissioner Mahon stated that it was not in place of but rather in addition to the $3.4 Million.
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In Congress for the past two years they have been looking at TANF and trying to get at that surplus money. They really can’t but this is just another way of getting around that bill without touching TANF.
The
disconcerting issue with the food stamp program is that traditionally for
administrative costs there were no administrative cost to the County; the State
took all that cost on by themselves. This is the first time the State has
chosen to pass that down and they have passed it all down. Medicaid
actually does represent a State share it is a 2.8 Million is really half of the
hit that we will take, the State will pay it’s share of that and send the other
half down to us.
Legislator
Kaplowitz asked who administers the food stamp program and added if it is
us, areif so are
we going to have to hire additional people? Mike continued by asking if
we were going to have a full $3.4 Million hit or are we going to be able to
absorb some of that through some administrative savings and personnel already
on the ground.
Commissioner
Mahon respond by saying it is just a shift in the way they determine
reimbursement. The number of people who are on board were bringing claims prior
to TANF through this formula, tthey
called it the primary program formula. they called it. That
allowed us to charge it to the old AFCC program. Now they are saying that
in TANF that is double dip. So we have the same number of people on board
it is just that we are not getting the same amount of reimbursement.
Actually, we are getting $3.4 Million less in tax levy but if you think of the
way that matches work there is a multiplier effect. The multiplier effect
is not really there for food stamps because we did not have to pay for
administrative costs in the food stamp program until this point. It was
50% Federal and 50% State. It was the only program that the State did
that in. The other programs are roughly 50%, 25%, and 25% for administrative
costs.
Medicaid Cost Containment
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Commissioner Mahon continued to say that in the area of Medicaid Cost Containment, it’s a direct hit to us that adds up to $2.7 Million this year. In the State budget they passed a number of items that limited costs in certain areas of the Medicaid program. We refer to them as Medicaid Cost Containment items. In this year’s budget and in order to continue those items the budget had to be passed, at least this piece of the budget, by June first in order to tell HSS, the Federal Government, that these were the items that we were going to limit costs on. The State did not act on that. They let that go past and therefore, we reverted back to an open ended payment system that weighs the cost. In the final state budget they did reenact them, but they did not retroactively reenact them and therefore, there was a one-quarter cost to us. It should be noted that in the State budget they did use a portion of the surplus to close their gap and their share of the cost, but passed the rest directly down to us. Commissioner Mahon stated that he feared the fact that the State, who usually puts those cost containment items in for two years, only put in the items in only through March of next year, which means that we’ll face the same situation. There have been some rumblings throughout the departments throughout the State that there may have been a deal cut and theses things may disappear. That means that we'll take a nine-month hit next year; this means a $6.2 Million hit to the tax levy in the year 2000.
Maintenance of Effort
Maintenance
of effort is a Federal Law. In 1995 when the Federal Government was talking
about block granting family assistance, ttheir
original thought was to take the Federal funds that they sent down to States
and allow the State to spend them on family assistance with no
requirements. In New York State in 1994, the year that they based this
on, we ran a $4.8 Billion program in family assistance. $2.4 Billion was
Federal money, and the other $2.4 Billion was a combination of State and local
money. As they got closer to signing the bill, there were a number of
people in Congress who were
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concerned
that when they passed the bill, that the State would take all the matching
money out and run their program totally on Federal money and therefore,
reducing the amount of money in the program by half. The intent of
Congress was that Welfare Reform was not to save money. It was a
reinvestment program. They demonstrated that by passing the maintenance
of effort clause. The clause did have a benefit in the sense that they
wanted the State to be successful so they said to the State, to become
successful you can take some money out. In year one theyThe State would let the State
go down to 85% of what the State’s historical spending was off the base year,
which was 1994. If you met your participation rate the Federal Government
would let them go down 75% and from that point on the State could go no
lower. If the State went below that level the penalties would be
severe. The penalties are first dollar for dollar. The second thing
that the state would do is take all of the States welfare to work money.
Then the Federal Government State would tell the State that we would have to
put it back and if they don’t,
the State would suffer an additional 2% penalty and that 2% would climb every
year.
For New York State we must spend $1.74 Billion, that is 75% of our 1994 block grant, to get $2.4 Billion. This year the State said in June based on their projections, New York State is going to be $150 Million short of our MOE requirement. Therefore, the State would have to pay half of the $150 Million and the counties would pay the rest. That pass through to us would be a hit of $3.1 Million that they just took out of our program. They determine the counties share from 1998’s caseload; it is not relevant. The Commissioner feels that the Counties share should have been based on 75% of what the Counties spending was on in 1994. The Commissioner asked them to run a County specific MOE to see if we were getting hit with our fair share. The Department of Social Services ran the numbers, in 1999 they determined that we are at 83% of the Counties historical spending in 1994. That means we should have gotten no hit, if our
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numbers were correct. The State said they could run a County specific MOE, but then the Counties would be attacking each other.
The
Commissioner did a straw poll around the table at the County Commissioner’s Cconference and asked how many
of them were cutting their family assistance account? They all raised
their hands. So if we have a short fall now it is going to be worse next
year. The State has suggested putting together a work group to close the
gap. There are three methods to accomplish the decrease in the gap.
One option would be Direct Programs, the second being Blended Funds and the
final method would be the State Owned method where the program stands by
itself.
The Commissioner believes that until we get a County specific MOE, we’ll always be budgeting in the dark and paying for other Counties.
Chairman Wishnie asked if by being successful by in what you do, you are reducing your family assistance program money and what your explaining to the Committee is that because there is no maintenance of effort measurement, that the County will receive a penalty because the department knows that they are spending a certain amount of funds in order to reduce family assistance but then you can use the money in other ways.
Mr. Mahon responded by saying that would be acceptable as long as it meets the purpose of the act.
Commissioner Mahon said that MOE says that no matter how successful you are you still have to spend the funds through 2002 on the program.
Legislator LaMotte asked what happens in 2002?
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Commissioner Mahon said that the bill would have to be re-authorized. He projects that in 2002, if the economy continues the same $2.4 Billion from New York State will rocket down drastically. There are billions of dollars that are sitting in TANF funds that are not being used. The Commissioner contributed the sum of unused money to lack of creativity.
Jiggetts v. Wing
Jiggetts v. Wing is a lawsuit that is looming on the horizon. It has been around since 1991. The State Constitution says we must take care of those people in need. The lawsuit says that the rent schedules in New York are not enough. The state has been fighting that stance since 1991. The judge has ruled against the State one more time and the State has the opportunity to appeal one more time. It is up to the Judge to accept that appeal or not. The best guess of the Department in Albany is that if they accept the appeal then we won’t feel the brunt of this until the third quarter of the year 2000. If the Judge does not accept the appeal then we will feel the brunt of this in the first quarter of next year. The hit is significant. In the County’s worse case scenario, although there is no telling what the worse case scenario will be, we doubled the current rent schedule because that was acceptable in the lawsuit. In the lawsuit they said that part of the stipulation was that we would have to pay those people that met certain criteria over and above the rent schedule, but not over and above two times the rent schedule, so that is why we used that amount. A full annualized figure of that would be $10 Million to the tax levy. That is the bad news, the good news is that all that would go towards the Department’s Maintenance of Effort, but the Commissioner admitted that is no trade off.
Legislator LaMotte asked if there was more of a downstate issue than an upstate issue?
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Commissioner Mahon said that it was not. We might hear more about it downstate, but the impact will be the same upstate; double to us is double to them. Every time the State has raised the rent schedule, every single landlord increased the rate as soon as they could.
Chairman Wishnie asked if the Board has to plan to be conservative in the 2000 budget and if we should be adding $10 Million to the budget in preparation.
Commissioner Mahon said we should be adding some number, we’re just trying to get a handle on what that number should be. The County is working with the State and the State has some options. First the State could for example if they lose the Jiggetts case, then they can only resolve the Jiggetts case only and deal with each lawsuit as it comes up and as you lose them. Or the State could say it is time to take care of this and then figure out what the right schedules should be and then apply them across the board. The third option is to go to a flat grant. For an example, a family of three would get $600 and what they do with it is their choice.
Mrs. Carrano stated that one of the benefits that Westchester County has is that other Counties budgets are out so they are taking guesses, we’re going to have the benefit of an additional six weeks to find out what is happening in the court and with the State.
Fiscal Impact Summary
In 1999 the Department estimates there will be a hit of over $10 Million to the tax levy due to no control of the Department at all.
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There are pieces of the program that the Department is not running right now. The Department is scrambling to find funds to implement these programs. The Commissioner said that the Department is not addressing retention and it is not addressing skill enhancement.
Chairman Wishnie in trying to understand what the Commissioner was speaking about in regards to the tax levy hit said in order to absorb the $10 Million lose from the State, asked if the department was retaining funds that they would have spent otherwise.
The
Commissioner said tThe
Chairman’s assessment was correct.
Legislator Carsky asked the Commissioner what he foresees happening two years from now?
Commissioner Mahon said in two-year if we are unsuccessful, 20 % will be exempt and we can still use federal funds based on the criteria that the state has not identified yet.
Legislator Kaplowitz asked if the Department adjusted or left the current maintenance of effort in order to compensate for the Jiggetts payment?
Commissioner Mahon stated that the Department left the current maintenance of effort figure.
Legislator Kaplowitz asked if the 2000 hit of $6.2 Million is the same as the $6.2 Million that the department put under potential 2000 impacts; i.e. Medicaid cost containment or is that an additional figure.
Commissioner Mahon stated that the figure is an additional figure, the number just happens to be the same.
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Commissioner Mahon wanted to speak about a new proposal that will require no new people. The proposal is for a management intern program that involves six positions. The individuals would work for a year to eighteen months at a grade twelve and then go back to their regular position. Part of the program would be an MPA degree from Pace University that the Department would pay for out of 100% State and Federal funds, no local money would be used because the state has finally given us our bonus award.
Mr.
Boland stated that we have noticed that the department had been entering into a
lot of contracts that dealt with training. Mr. Boland Bob asked what areas are these
people being trained in.
Commissioner Mahon stated that they are being train in case management and strength based training.
Chairman Wishnie asked the Commissioner to stay in touch with the Board of Legislators and keep them abreast of any situations that may arise.
Acquisition and Contracts
George Hosey asked if we have to have a minimum number of cases to be eligible for Item number 1 on the A&C agenda?
Chairman Wishnie said we’d have to find out that information.
Legislator Kaplowitz requested copies of 18, 20 21, and 22.
Adjournment
There being no further items for discussion, on motion of Legislator Kaplowitz seconded by Legislator Young, the meeting was adjourned at 11:50 AM