Social Services and Child Care State Budget Outcomes

April 19, 2011

Author: Kristin Brown Lilley

Social Services:

From a social services perspective, the Executive Budget proposed three main items that Empire Justice Center was active in urging the legislature to reject.  We also sought a small restoration of funding for the Disability Advocacy Program.  

In sum, we were pleased to see the most damaging of the proposals were avoided, but unfortunately there were some losses that will have a negative impact on low income New Yorkers.  Our hope is that these are short term measures that will be corrected in the near future.

1. Grant increase – implementation delayed:  In 2009, the State had approved a 30% increase in the basic allowance (covering most non-housing costs) of the public assistance grant.  This increase was to be phased in over three years, with the final phase scheduled to be implemented in July 2011.  In his 2011-12 budget, Governor Cuomo proposed that implementation of the final phase of the increase be postponed until July 2012 and the legislature ultimately agreed to this modification.  The Assembly’s initial attempts to “buy back” this delay were undermined by the lack of available funds to do restorations and the Senate’s counter proposal to actually reduce the grant.  We urge the Governor not to propose an additional delay in next year’s budget, as the move generates modest savings and the increase was long overdue; until 2009, the basic grant had not been increased in more than 18 years.

2. Full-family sanctions – rejected:  The Governor’s budget proposed that households receiving public assistance in which an adult member allegedly failed to comply with a work requirement would be subject to “full-family sanctions.”  Under existing rules, only the non-complying adult’s pro rata share of the public assistance grant would be eliminated for a designated period of time.  Under the Governor’s proposal, a complicated set of rules would be adopted under which the individual’s non-compliance might result in the termination of benefits to the entire family.  We were very pleased that the legislature chose to reject this proposal, whose primary impact would have been to punish children for an adult’s non-compliance.

3. Public assistance funding – three significant changes:  The enacted state budget for 2011-12 included three important changes, though the total impact of these changes is difficult to immediately assess and should be monitored:

(a) Family Assistance (FA): In New York, the primary public assistance program for families with children, FA, has been paid for with a combination of roughly 50% federal Temporary Assistance for Needy Families (TANF) funds, 25% State funds and 25% local funds.  In 2011-12, TANF funds will be used to pay the entire cost of FA.

(b) Safety Net Assistance (SNA):  New Yorkers in need of public aid but not eligible for FA can receive SNA, which was traditionally funded with roughly a 50% State and 50% local contribution.  Under the enacted budget, the funding ratio will be modified to a 29% State share and 71% local share.  Thus much of the  local savings from the FA shift will now be redirected to pay for the increased local SNA share.

(c) The TANF block grant:  With much more TANF block grant funding being used to pay for the FA program, substantial cuts have been made to many other past uses of TANF funds.  The programs receiving the largest share of TANF funds, the Flexible Fund for Family Services (FFFS), and the Child Care Subsidy remain at or close to their funding levels from 2010-11.  But funding for nearly every other program funded out of the TANF block grant has been either significantly cut or eliminated.  This includes programs for job skills and training, subsidized employment, child care at CUNY, SUNY and demonstration projects, Disability Advocacy Program (see below) displaced homemakers and preventive services. [1]

4. Disability Advocacy Program – funding drops another $358,000 to a total of $4.86 million statewide: The Disability Advocacy Program (DAP) is a nationally recognized statewide program run through the Office of Temporary and Disability Assistance.  DAP providers, primarily not for profit legal services organizations, provide legal assistance to low income disabled New Yorkers who have either lost or been denied SSI/SSD benefits.  The DAP program more than pays for itself, generating between $2 and $3 for every dollar invested by securing federally funded SSI/SSD benefits for clients – and eliminating the need for state and locally funded public assistance.  In this way DAP also provides millions of dollars in ongoing cost avoidance, which compound year after year.  The cost of the program, savings generated and costs avoided in 2008 and 2009 are outlined in these charts.  During that time period, 9,387 cases were closed and many more clients were served as providers opened new cases and tended those that were ongoing.

Funded at a total of $6.74 million since 2002 using a combination of state and federal TANF funds, DAP has sustained multiple funding reductions since 2008.  Total funding has been cut by 20% compared to the funding level for the program from 2002 to 2007.  By the end of the 2010-11 budget process, funding had dropped another $385,000 statewide. 

DAP supporters were pleased that the Governor kept the DAP base funding steady at the previous year’s level, and the legislature agreed to maintain that funding.  Unfortunately, like all TANF funded programs outside of cash assistance, child care and the flex fund, DAP TANF funding was eliminated in the Executive Budget.  The legislature was only able to restore $98,000 in TANF funds for DAP - statewide.  

Preliminary data for 2010 case closings and savings generated by DAP indicates that the funding reductions the program has sustained are beginning to become apparent.  As the state looks to the next budget season, we strongly encourage shoring up this critical program so that more disabled families and individuals in New York can access the more stable and more substantial federal benefits, and so that the state and local governments can achieve the financial relief this program offers. 

 Child Care Funding and Resources:

The overall subsidy funding picture for the New York State Child Care Block Grant includes:

1. an appropriation of Federal Child Care Development Funds of $360 million;
2. State general funds appropriation of $144.4 million, and
3. local MOE funds of $68.3 million, PLUS
4. $393 million in TANF funding transferred to the Child Care Block Grant.

Now the bad news:

1. Although it first appears that $965.7 million might be available for child care, it will likely be about $60 million less than that.  The federal Child Care and Development Fund grant award to New York State is likely to be substantially less than the $360 spending authority provided in the state budget.  Current estimates are that the federal child care funding allocation to New York will be just under $300 million.  Last year we received $301 million in funding; in 2009-10 we received $302 million.

2. The last two years we have seen a loss of federal funding because of population shifts.  This loss was cushioned by our receipt of $96 million in ARRA funds over the last two years. Without the ARRA cushion, counties will have fewer real dollars to pay for child care.

Also:

Facilitated enrollment projects were funded at just $3.396 million.  These programs serve selected areas and are unique in two ways – they allow parents to apply for subsidies at convenient community based locations – and they are able to serve parents with incomes up to 275% of poverty.  The governor had proposed to entirely eliminate funding for the programs.  In 2009-10 they were funded at $10.9 million and were cut to $5.265 million last year.  The legislature was able to restore some, but not all of the funding for these critical programs.

State Central Registry fee – reduced but not abandoned.  Governor Cuomo had proposed an increase in the fee for child abuse clearance checks through the State Central Registry from $5 to $60, and also proposed to remove the provision in Social Services Law §424-a(i)(f) that exempted child care providers from having to pay the fee at all.  The final budget increased the fee to $25, and removed the exemption.  Clearly this will have a substantial fiscal impact on child care providers.

The fee increase and the lifting of the exemption were effective on April 1, 2011, and OCFS has posted a memo to its website explaining the rule in detail.  Because the Article VII changes apply to “applicants for employment,” the fee will not be charged to volunteers, consultants, current employees who are re-screened or persons who reside in homes where child care is provided.  These persons must receive SCR clearance but will not be charged a fee. For more information, click here.

End Note:
 [1] For some of these programs, the drastic reduction in TANF funds will result in the elimination of the program.  For others, the TANF cut will be painful, but the program may be able to survive with continued support from other sources.