HB 198-FN - AS INTRODUCED

AN ACT relative to state imposed time limits on public assistance eligibility.

SPONSORS: Rep. Rosen, Belk 7; Rep. Vaillancourt, Hills 44; Rep. Dickinson, Carr 2; Rep. D. White, Hills 25; Sen. Boyce, Dist 4

AN ACT relative to state imposed time limits on public assistance eligibility.

AN ACT relative to state imposed time limits on public assistance eligibility.

The Department of Health and Human Services has indicated this bill will reduce state expenditures and revenues by $1,006,411 in FY 2002, $4,410,062 in FY 2003, $6,314,822 in FY 2004 and $8,392,742 in FY 2005. Local expenditures will increase by $ $2,978,352 in FY 2002, $8,554,104 in FY 2003, $11,728,704 in FY 2004 and $ 15,191,904 in FY 2005. There will be no impact on local revenue or county revenue and expenditures.

The Department has made the following assumptions:

· There are two states in New England with TANF time limits shorter than New Hampshire's limit of 60 months. Connecticut has a limit of 21 months and Massachusetts has a limit of 24 months. The Department indicated that the majority of recipients in these states continue to receive assistance beyond these time limits under exceptions and exemptions. The Department assumes this bill will result in a reduction in New Hampshire's time limit for TANF eligibility from 60 months to 24 months, which is equal to the limit in Massachusetts.

· 20% of the existing TANF recipients will continue to receive assistance under the hardship provisions provided by federal regulations.

· The TANF maintenance of effort (MOE) requires the state to spend at its 1994 level of $32 million dollars. Any reduction in state expenditures resulting from this bill would be offset by expenditures for other TANF related purposes in order to maintain the grant and avoid sanctions.

· Reductions in total spending would result in a reduction in the federal funds drawn down from the TANF grant. These funds would remain with the federal government as part of New Hampshire's "reserve" and may only be used for TANF purposes.

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· Congressional reauthorization of the TANF grants in 2002 will be at the current levels.

· Caseloads will remain close to current levels.

· TANF costs are 60% federal funds and 40% state funds.

· The shorter time limit would require a higher level of service to prepare recipients for self-sufficiency. Additional employees and contract funds will be required.

· The cost per case to local welfare would be the same as the current average of $481 per case. The increase in local welfare cases could not be estimated. The Department assumed the clients dropped would turn to local welfare under RSA 165. This assumption represents the maximum increase in local cases.

· The estimated additional administrative expenses are as follows:

Administrative Expenses FY 2002 FY 2003 FY 2004 FY 2005

Salaries (9 employees) $ 274,806 $ 274,806 $ 274,806 $ 274,806

Benefits (31% of Salary) 85,194 85,194 85,194 85,194

Contracts (40% increase) 844,000 844,000 844,000 844,000

Printing (Pamphlets) 25,000 0 0 0

Postage (Pamphlets) 7,000 0 0 0

New Heights Modifications 50,000 0 0 0

Training 15,000 0 0 0

Total $1,301,000 $1,204,000 $1,204,000 $1,204,000

· On January 1, 2002, 907 cases would be discontinued. An additional 50 clients would reach the 24-month time limit in each month after January 2002. TANF payments would drop by $2,978,352 in FY 2002, by $8,554,104 in FY 2003, by $11,728,704 in FY 2004 and by $15,191,904 in FY 2005.

· The administrative costs combined with the reduction in grant expenditure would result in a net decrease in TANF expenditures. The general fund amount must be spent on TANF related costs in order to sustain the MOE. The result is a reduction in federal TANF funds drawn. These funds will remain with the federal government as part of New Hampshire's reserve as follows:

FY 2002 FY 2003 FY 2004 FY 2005

Administrative Expenses $1,301,000 $1,204,000 $1,204,000 $1,204,000

Reduction in TANF Cases (2,978,352) (8,554,104) (11,728,704) (15,191,904)

Net Decrease in TANF Expenditures ($1,677,352) ($7,350,104) ($10,524,704) ($13,987,904)

State Share (40%) to be

spent for other TANF

related purposes (MOE) (670,941) ($2,940,042) (4,209,882) (5,595,162)

Federal Share (60%) not

drawn down (reserve) (1,006,411) (4,410,062) (6,314,822) (8,392,742)

· The additional administrative costs may exceed allowable administrative costs under TANF and general funds may be needed for some of these costs.

· Congressional reauthorization of the TANF Program is expected in FY 2002. A large reserve or balance of unspent federal funds may result in a loss or reduction in the reserve or the TANF reauthorization amount. The Department anticipates that the reserve funds and the current grant level will be needed in the event of an economic downturn.

· Failure to meet the state's MOE would result in a loss of federal funds and the expenditure of additional state funds.

· Working recipients who have received more than 24 months of assistance, but have not achieved self-sufficiency, will not be able to continue working without the employment supports.