PUBLIC WELFARE

    The major thrust of the Governor=s approach to Cash Grants has been to reduce state funding and claim large increases in support for child care by converting federal TANF block grant funds to federal Child Care block grant funding. Federal CCDFBG child care funding in the cash grant appropriation will increase from $64 million to $152 million. On the other hand, in 1998-99 state funding for Cash Grants will drop from $324 million to $256 million and federal TANF support will drop from $524 million to $398 million.

    The AFDC/TANF caseload for the first eight months of the current fiscal year has averaged 96,237 persons less than the first eight months of the 1996-97 fiscal year. The reduction in caseload has led to a savings of $85.6 million in state funds and $24.7 million in federal funds [for a total of $110 million] over the same eight month period.

    The precipitous drop in the AFDC/TANF welfare caseload over the last year which is due primarily to the economy and the welfare reform legislation should have resulted in substantially more funds being devoted to child care and other support services in order to make the federal welfare legislation really work. Unfortunately, up until this time, the Ridge Administration has not taken advantage of Cash Grant appropriation savings to retarget the federal and state funds that have been made available.

    For the first eight months of the current fiscal year, total expenditure for regular and transitional daycare for the welfare population has increased by only $9.8 million in total funds. During the same period, support services increased by $2.8 million. The total of $12.6 million in daycare and other support services pales in significance to the savings of $110 million.

    The Governor=s budget proposes to increase support services to move people from welfare to work by increasing:

• the allowance for the down payment or purchase of a car from $200 to $750
• the allowance for automobile repair from $200 to $400
• the clothing allowance from $75 to $150
• the relocation allowance from $200 to $500

    The Governor=s budget contained another attack on the most vulnerable of Pennsylvania=s citizens, those receiving Supplemental Assistance for Aged, Blind and Disabled. When the federal government started charging the states for the administration of the state supplements to the federal SSI program, the Casey Administration first agreed to absorb those costs. When the charge went to $5 per check, the Casey Administration said the state could do it for less by sending out its own checks. However the Ridge Administration reversed the decision and in January 1996 began charging SSI recipients $5 monthly, which was subtracted from their state supplement. The Ridge plan was implemented at the same time that federal SSI payments were increased so that the impact was not as strongly felt by the recipients.

    The federal charge will increase from $5 to $7.60 and the Governor=s budget proposed to charge the SSI recipients the additional $2.60 beginning January 1999. Senate Democrats proposed the elimination of the charge to SSI recipients or in the alternative limiting the charge to $5. Both amendments were defeated by a straight party vote. The Conference Committee has added $4.2 million to the Supplemental Grant appropriation to eliminate the need for the increase in the charge to SSI recipients.

    Perhaps the biggest welfare change in the near future will be the continued implementation of the Electronics Benefit Transfer [EBT] System. EBT will convert the current cash and food stamp delivery system to an electronic debit system. The Pennsylvania ACCESS card, which will be used by the recipient, will also replace the current Medical Assistance card. The system has been implemented in Berks County and Philadelphia. It will be phased in throughout the state over the next six months.

    Even though, the Cash Grant appropriation will lapse $30 million in state funds in the current fiscal year and the appropriation in 1998-99 will be less than one-half of what it was only two years ago, the Governor has refused to follow the lead of at least 12 other states [including New York and New Jersey] and use some of those excess funds to support Food Stamps for legal immigrants. While the federal Welfare Reform legislation of 1996 eliminated the eligibility for all aliens, the most recent federal budget reconciliation act permits states to subsidize food stamps for legally admitted aliens.

    The budget does propose a $450,000 appropriation to assist legal immigrants achieve citizenship, enabling them to receive federal benefits.

    The Conference Report increases New Directions spending by $21.5 million in state funds and $43 million in federal funds to provide job placement services, transitional employment and support services for welfare recipients to find and retain employment.

    The budget includes supplemental 1997-98 federal appropriations of $28.8 million for welfare to work training programs. Such investments will become increasingly important as the more difficult to serve segment of our public assistance recipients must be moved into the workforce. The federal welfare reform law requires increasing levels of work participation by welfare recipients during the next several years.   

    Next year, 30 percent of these families must participate in work activities. While we already exceed this participation rate (currently 37 percent) we do not meet a second requirement that 75 percent of all two-parent households must participate in some work experience. Non-compliance could cost the commonwealth $35 million.

    Next year=s New Directions spending plan reflects a significant shift in resources to programs providing substantive training to help recipients overcome barriers to employment. This spending will increase from $90 million to an estimated $150 million in the 1998-99 fiscal year. Spending for the Administration=s much touted rapid attachment services will be reduced by nearly $30 million.

    There is little change in the Medical Assistance program other than the expansion of mandatory managed care. The key elements of the Governor=s Medical Assistance budget are as follows:

• Expansion of the Community Access funding within the Medical Assistance-Inpatient appropriation. This is designed to address the concerns of urban hospitals battered by the combination of Act 35 and managed care. The Governor=s budget contained $10 million which would be matched by $11 million in federal funds. Urban hospitals requested an increase of $15 million which would have created a total fund of $50 million. The Conference Report has added $7.5 million to create a total fund of $36.5 million. An additional allocation of $3.5 million each for Episcopal Hospital and North Philadelphia Health Systems has been included.
• Implementation of mandatory managed care in 10 Southwest Counties beginning January 1, 1999 in a program very similar to Health Choices in Southeastern Pennsylvania. At this point mandatory managed care will cover 60% of the medical assistance eligibles. The Lehigh Valley is scheduled to implement mandatory managed care in January of 2000, with the remainder of the state in January 2001. Due primarily to logistics, approximately 5% of the state will never be covered by the program.
• No additional funds for the Health Choices Southeast system. They had requested more than $20 million based on the Arthur Andersen report. The fee increase recommended by the Governor has been adopted.
• Expansion of the Children=s Health Insurance Program [CHIP]. This will provide medical assistance services for an additional 10,725 children at a cost of $12.9 million in 1998-99. For other material on CHIP Expansion, see discussion in Insurance Department material.
• Additional support for the AIDS Special Pharmaceutical Benefits Program. The Governor requested an additional $500,000 to provide non-nucleoside reverse transcriptase inhibitors, which are supposed to have fewer side effects than some drugs currently in use. The Conference Report adds an additional $2 million.
• $1 million in the Information Systems appropriation to develop an automated medical assistance eligibility determination system.

    In response to those advocating an additional $17 million for women=s programs, the Conference Report added $2 million to the Medical Services for Women appropriation, to be divided, as usual between the Pro-Life groups and the family planning organizations.

    The Behavioral Health appropriation was established in the 1996-97 budget to provide behavioral health funding for persons who lost their General Assistance-related Medical Assistance coverage. The Conference Report adopts the Governor=s plan to reduce that appropriation next year by $18 million. $13.3 million is a transfer to the Outpatient appropriation based on a claim that some of the persons expected to lose eligibility retained eligibility. The remaining $4.7 million is due to projected underspending in the current fiscal year.

    The Governor claims that his budget will spend more than $348 million in state and federal money for the working families and welfare recipients. Funding for the welfare recipients amounts to $186.94 million [$31.7 in state funds] The Day Care appropriation supports child care for the non-welfare population. Each of the appropriations has funding to increase the rate ceilings of subsidized daycare. This will affect the high-cost areas, not those where charges are below ceilings. Persons receiving subsidized day care may not be charged higher amounts than those who pay the entire price of the service.

    The budget adopts the Governor=s proposal to use $1 million for special child care initiatives in Philadelphia and Pittsburgh as well as another $1 million to increase training opportunities for day care providers, care givers and parents regarding early childhood development issues. The remainder of the additional state funding for day care [$6.87 million] is to provide services to 3,253 children whose families have moved from welfare to work.

    Other initiatives relating to child care are discussed in the material regarding the Department of Community and Economic Development.

    Population in state mental health facilities will decline from 4,281 in July 1996, to 3,884 in July 1997 and 3,429 in July 1998. Sometime this summer, Haverford State Hospital will be closed. The only hospital expected to have an increased population will be Norristown. Large declines are expected in Allentown, Clarks Summit and Wernersville. The Community Hospital Integration Project program [CHIP] is expected to add 150 new places. The availability of the $4.5 million necessary to fund the CHIP expansion is dependent on the timely closure of Haverford. Mental Health services are expected to save $3 million by the implementation of Mandatory Managed Care for behavioral health. The EPPI appropriation has been increased in the Conference Report from the $3.65 million requested by the Governor to $7.15 million.

    Ebreeville Mental Retardation Center was closed on January 16, 1998. Laurelton mental retardation Center and the Torrance MR Unit will close by July 1998. Western MR Center is scheduled to close in July 1999. Major reductions in population will occur at Hamburg, Polk, and White Haven MR centers.

    The mental retardation community program will be expanded by funding 300 community placements for persons in state facilities and 538 community placements for persons currently on county waiting lists.

    The Assistive Technology program for disabled persons in the community begun in the current fiscal year will be continued with a $70,000 increase. The program will be replicated for the mental retardation center population. This is part of the Governor=s Program Revision entitled Promoting Independence for Persons with Disabilities involving Public Welfare, Health, Labor and Industry, Community and Economic Development and Conservation and Natural Resources.

    While the state fund increase for County Child Welfare programs is only $4.9 million, the substantial federal fund increases provide a total fund increase from $807 million to $857 million. $24 million is due to eligibility changes relating to federal foster care payments. Federal funds will be available for families with higher incomes, and for the first time, in-home services for children at risk of needing foster care will be entitled to federal reimbursement. Counties will save an additional $10 million from these changes.

    In addition, the General Government Operations appropriation contains $99,000 to establish a mandatory registry to screen and track foster and adoptive parent applicants.

    All Department of Public Welfare funded local human service programs appropriations have been provided a 2% cost of living adjustment.

    In addition to the 2% COLA, Domestic Violence will receive an additional $781,000 to serve an additional 2,877 persons and Rape Crisis will receive $334 to provide services to an additional 674 persons. Attendant Care will receive $2.874 million to provide attendant care to an additional 681 persons as part of the Governor=s Promoting Independence for Persons with Disabilities initiative. The Conference Report has added $200,000 to the Legal Services appropriation.

    Unfortunately, small cost of living increases cannot make up for a nearly 10% reduction in the available federal Social Services Block Grant. Some programs such as Breast Cancer Screening, Legal Services and Services to the Developmentally Disabled will actually receive less in total funds from the Commonwealth next year than they received this year. The further reduction in the federal Social Service Block Grant appears to be likely.