Empire Justice Center Human Services Testimony

Introduction:

Thank you for the opportunity to testify today.  My name is Susan Antos.  I am a Senior Attorney in the Albany office of the Empire Justice Center.  We are a statewide legal services organization with offices in Albany, Rochester, White Plains and Central Islip (Long Island).  Empire Justice provides support and training to legal services and other community-based organizations, undertakes policy research and analysis, and engages in legislative and administrative advocacy.  We also represent low-income individuals, as well as classes of New Yorkers, in a wide range of poverty law areas including, public assistance, child care, child support, and disability benefits.

My testimony today will focus on the following issues:

• The impact of multiple financial pressures on limited child care subsidy dollars – fewer families are able to rely on this critical resource.
• Support for a proposal that would focus child care dollars on providing subsidies that preserve jobs.
• Recommendation of full and immediate implementation of the final installment of the welfare grant increase.
• Request for a modest increase in funding for the Disability Advocacy Program to allow providers to avoid reductions in case openings, and savings to state and local governments down the road.
• Recommendations for implementation of SSI State Supplement take over, particularly input opportunities for stakeholders to ensure best possible client interface.
• Support for funding for continued funding for Medicare Part D Counseling and Appeals.

Office of Children and Family Services:

Low Income Working Families lose Child Care subsidies as Local Social Services Districts Struggle with Reduced Funding.

The cost of child care for low income families is usually more than rent.  The Self-Sufficiency Standard for New York State (2010) indicates that for many families the cost of child care is nearly double the amount of rent for a family of three – one adult and two children.  For example, in Albany County an adult with an infant and a pre-schooler is likely to pay $897 per month in rent and $1753 per month in child care.  To make ends meet, that family would need to earn $27.24 an hour.  Even when the children are older, a single mom with a pre-schooler and a school age child would pay $1419 per month for child care, and would need to earn $24.44 an hour to make ends meet. [1] In areas of the state where rental costs are higher, the situation is even more dire.

As outlined in the attached budget chart, in 2012-13, unless the legislature adds significant funding to the Governor’s proposed budget, New York State has at least $70 million less to spend for child care than it did in 2009-2010 and $60 million less than it had in 2010-11.  Even with the Governor’s addition of $93 million in state funding to the New York State Child Care Block Grant (NYSCCBG), the proposed budget reflects an overall reduction in child care funding from over $974 million in 2009-2010 to $904 million.  This is because the NYSCCBG is primarily funded with federal funds - the federal Child Care Development Fund and the Temporary Assistance to Needy Families (TANF) Block Grant, and both of those funding streams have been reduced.  Additionally, in fiscal years 2009-2010 and 2010-2011, the State was able to increase the NYSCCBG using federal American Recovery and Reinvestment Act (“ARRA”) funds.

This year, child care faced a huge crisis because of Congress’s total elimination of the federal TANF Emergency Contingency Fund (ECF).  Historically, New York State has transferred a portion of the TANF ECF to the NYSCCBG. As a result of the elimination of the ECF, the TANF transfer into the NYSCCDBG was reduced in the Governor’s budget by $93 million.  The Governor has restored this significant loss with an equal amount of state funding, which essentially maintains child care at close to the same amount as in last year’s budget, which we are very appreciative of.

Although the narrative accompanying the Executive Budget states that the Governor’s addition of $93 million in general funds will keep child care funding at the same level as last year, there is an actual shortfall of $20 million less than last year.  Among other things, the proposed budget does not take into account the $7 million that was added to the budget in December for facilitated enrollment, nor does it take into account the $6.16 million that local districts transferred from their Flexible Fund for Family Services allocation to their share of the NYSCCBG.   Although the facilitated enrollment funding has been reallocated in the budget, in many counties it has already been spent (see description of Oneida and Albany below) and without new facilitated enrollment money, counties will again see lowered eligibility levels.  Further, it remains to be seen if counties that were able to transfer FFFS funds will be able to do so this year, given increasing strains on their budgets.

Under State Law, families with incomes up to 200% of poverty are eligible for financial assistance paying for child care.  Many counties are no longer able to serve families up to that level because of cuts in funding. Here are some examples of the harm caused to working families when counties do not have enough funding to provide child care for all families that need it:

Albany County stopped taking applications for child care services from working families as of April 23, 2010. This moratorium lasted for over one year. [2]  
When the county began accepting applications, it was only able to do so for families under 125%.  Because Albany County is served by a facilitated enrollment (FE) program administered by the Workforce Development Institute (WDI), that program, which was originally intended to serve people between 200% of poverty and 275% of poverty, began serving families with incomes over 125% starting in June, 2011.  In December of 2011, additional dollars were allocated for facilitated enrollment in a supplemental state budget, which saved many child care slots in a number of upstate counties. [3] There is no new facilitated enrollment funding in the Governor’s proposed 2012-13 budget. However, WDI will only be able to continue serving these families if additional facilitated enrollment funding is included in the 2012-13 budget.
Columbia County is no longer processing child care applications for working families as of November, 2011. [4]
Dutchess County lowered eligibility guidelines for working families from 200% of poverty to 150% of poverty in January of 2011.  In July of 2011, the eligibility level was lowered to 125% of poverty as families recertified. [5]
Erie County lowered its eligibility guidelines for low income working parents from 200% of poverty to 125% of poverty effective 3/5/10, leaving 1100 children in 700 families without child care. [6] Erie County was able to partially restore eligibility to 175% of poverty effective June 1, 2011. [7]
Fulton County discontinued payments to 140 families in October of 2011. [8]  Some families had their subsidies restored the following month when the County Board of Supervisors restored some of the funding. [9]
Monroe County – At least as early as November, 2010, Monroe County began denying ALL income eligible applications for child care assistance on the basis that they had “insufficient funding …to accept new applications.”  These denials continued through at least September, 2011. [10]
New York City – Nearly 16,000 children in New York City are at risk of losing their seat in a subsidized classroom or a voucher to pay for their care on June 30, unless new funding is found. Currently, the City serves only about 27% of all eligible families. Ninety percent of children in subsidized care live in families earning 135% of poverty or less – the City runs out of funding before it can serve the tens of thousands of other families who are eligible and in desperate need of help paying for care. The City has also closed several dozen child care centers, and tripled co-pays for the lowest-income families. [11] 
Oneida County stopped processing new applications for child care and discontinued benefits for those in education and training in November of 2011. [12]  In early December 2011, the County announced that it was ending child care subsidies for all families over the federal poverty level. [13]  This affected 425 families, or 30% of the 1,375 local families receiving subsidies. [14]  As a result of facilitated enrollment dollars allocated in the supplemental state budget of 2011-12, the Workforce Development Institute was able to reinstate child care assistance to 250 of those 425 affected families.  However, the allocated funding will only support these families until March 31, 2012.  WDI will only be able to continue serving these families if additional facilitated enrollment funding is included in the 2012-13 budget. [15]
Rensselaer County has not served families above 180% of poverty since at least 2006, and WDI serves those over that amount. [16]
Schenectady County reduced eligibility to 175% of poverty and then to 150%.  As a result of the December facilitated enrollment allocation and previous WDI allocations, WDI was able to serve the affected families effective November 10, 2011. [17] 
Suffolk County – On December 20, 2011, the County mailed notices to all families with income over 185% of the poverty level advising them that they could no longer afford to pay their subsidy.
   
Every dollar invested in child care saves a job for a working parent and creates a job for a child care provider.  Further, since all parents share in the cost of child care by making co-payments, this is a cost that is shared by workers and the government.  It is a solid investment in job creation.  At a minimum, New York should invest an additional $70 million to bring our child care investment to the 2009-10 levels. 

Office of Temporary and Disability Assistance:

1)  A Partial Solution to the Need for Child Care Funding.

Welfare recipients must participate in work programs as a condition of receiving assistance and are guaranteed child care assistance, often to the detriment of low income working families with real jobs. These activities are often not real jobs, but consist of job searches and workfare. Welfare recipients are exempt from the work activities requirement until their children are 3 months old. After that, they must participate in work activities. One of the ways to free up childcare money for low wage working families is to exempt single parents with children under the age of one from the welfare work requirements. This will free up child care subsidy funds for people with paid jobs.  We envision this as a temporary measure until the economy recovers.

This is not a radical proposal.  There are 25 states that exempt households with one child up to twelve months of age.  Those states are Alaska, California, Connecticut, Delaware, D.C., Georgia, Illinois, Kentucky, Louisiana, Maine, Maryland, Mississippi, Missouri, Nevada, New Hampshire, New Mexico, North Carolina, Ohio, Pennsylvania, Rhode Island, Texas, Vermont (which has a 24 month work exemption), Virginia, Washington and West Virginia.  California and Washington exempt households with one child under 2 years of age and with more than one child under 6 years of age; Vermont exempts parents with children under the age of two.

This proposal has already been introduced as A.8101/S.5586, and would save about $16.4 million if households with children under age 1 are exempted from the work rules. If the exemption was extended to age 2 (S.5335), the proposal would save roughly $44.2 million.  These savings calculations are based on participation data from California and assume that 40% of those eligible for an exemption would choose not to take it and would participate in a work activity. [18] 

Additional savings could be realized by savings in the administration of public assistance work programs.  California’s $376.8 million annual savings was comprised of $215.3 million in child care savings plus $161.5 million of employment services savings through the elimination of the connected work program expenses (e.g. expense of the workfare or soft skills program). Administrative savings account for about 42% of the total savings achieved in California.  If we assume the same percentage for administrative savings in New York, we could produce an additional $12 to $33 million in savings depending on which upper age limit is adopted.

Although some concern has been raised about the impact of this proposal on the federal welfare participation rates: 

• In calculating the work rate, the federal Temporary Assistance for Needy Families (TANF) law allows states to exempt households with children under age 1.
• Children under age 2:  A state can exempt families with children over age 1 although the TANF law does not exclude them in calculating the work participation rate.  New York has met the work participation rate in recent years and its target participation rate requirement through 2011 is about 35.8%.
• New York can avoid affecting its participation rate by creating a “separate state program” for these newly exempt families (Vermont has done this).

2)  Fully implement the Welfare Grant Increase.

We are greatly concerned about the inadequacy of the safety net in enabling the poorest New Yorkers to meet such fundamental needs as shelter, food, heat and clothing.  For this reason, we urge the Legislature to honor its pledge and complete the final installment of the modest but crucial public assistance increase adopted in 2009. 

In the 22 years since 1990, the cost of living in New York has risen by more than 70%.  During that period, the welfare grant in New York has increased by 20%.  The grant has thus, for many years, ensured that poor New York families have increasingly greater difficulty in meeting their most basic needs, forcing them to focus more on their survival than on doing what needs to be done to improve their lives. 

The stereotype of the non-working, undeserving welfare recipient is overwhelmingly invalid, a point driven home with particular force during this deep and prolonged recession, in which half of unemployed New Yorkers have been out of work for more than six months.  A large majority of those who receive welfare remain on the rolls for relatively short periods of time, many have been employed before receiving assistance, many will leave welfare for employment, and, indeed, many are working while receiving aid.   Many of those who are not as firmly linked with the labor market have a range of serious limitations, struggling with mental or physical disabilities, very limited levels of literacy and educational attainment, or domestic violence.  The public assistance grant should afford these people the capacity to meet their most basic needs with their dignity intact.

In 2009 and 2010, the first two phases of a scheduled three-step increase in the public assistance grant took effect, representing the first increase in the basic allowance in 19 years.  In 2011, the State failed to implement the final stage of this modest grant increase, and now the Executive Budget proposes to further delay implementation of the third installment by phasing in half of the third step this year and half next year.  If this proposal is adopted, a modest increase in the already severely inadequate welfare grant will have taken five years, instead of the intended three, to be fully realized.

Even when fully implemented, the maximum grant will still bring families to an income level that is less than half of the federal poverty level.   The final phase of the grant increase amounts to $35 per month for a family of three.  By way of example, in Monroe County, the maximum grant for that family of three will rise from $696 per month to $731, or 48% of the poverty level.  In Erie County, the grant for that family of three will increase from $654 to $688, or 44% of the poverty level.  Even with food stamps added in, the income for these households will fall well under 75% of the poverty level.  This grant plus food stamps theoretically enables families to meet their essential needs, including such basics as rent, food, utilities, clothing, transportation and school supplies.  But the reality is that these benefits do not come close to achieving that objective.

Finally, it is worth noting that the State Division of the Budget estimates that the total cost to the State of the final phase of the grant increase would be $12 million.  Withholding half of the increase until 2013 would therefore save only $6 million in the current fiscal year.  This is a miniscule amount in the context of the State budget, but translates into a meaningful benefit for many poor families, perhaps enough to cover the cost of diapers or transportation that might otherwise have been out of reach. 

The inability to make ends meet is, not surprisingly, incredibly disruptive of the lives of poor families.  Families facing eviction or a utility shut-off, homelessness or hunger, must devote time and energy to cope with the emergency.  There can be scant attention paid to moving on constructively with their lives, whether in pursuing education, developing skills or addressing a domestic violence situation.  The public assistance piece of New York’s safety net for the poor is simply not adequately performing its critical role in this State.  At a bare minimum, the insufficient but essential increase pledged by the legislature and the governor in 2009 must be implemented in the 2012 session. 

3)  Offset the 30% Loss in Funding that is Eroding the Disability Advocacy Program (DAP) Providers’ Ability to Open New Cases.

DAP provides legal representation for individuals whose federal disability benefits, Supplemental Security Income (SSI) or Social Security Disability Insurance Benefits (DIB) have been denied or may be discontinued.  The Governor’s 2012-2013 Executive Budget contains both good and bad news for DAP.  The program was flat funded at last year’s base amount of $4.76 million ($2.38 million in state general fund dollars), but lost TANF funding that was at the $1 million level in previous years.  While we were very pleased to see DAP funded at last year’s level, the program has been reduced by a total of 30% statewide since 2008, and new case openings are down as a result, causing concern that the savings the program reaps for the state could be compromised in subsequent years if funding is not increased.

The Disability Advocacy Program (DAP) is a nationally recognized program that generates documented and ongoing savings for the state and for local governments.  Through the DAP program, advocates provide low income disabled New Yorkers in every region of the state with legal assistance when their federal Supplemental Security Income (SSI) or Social Security Disability (SSD) applications have been denied or their benefits terminated.  The vast majority of clients receive public assistance, with over 50% receiving state/locally funded Safety Net benefits while they await a decision about their application. 

For each successful case, the Social Security Administration (SSA) provides a retroactive award to the client for benefits they would have received, beginning from the time of initial application.  SSA also reimburses the state and local governments for the interim assistance (IA) benefits provided as Safety Net benefits.  Eighty-seven percent of the clients represented by DAP advocates prevail at the hearing level as compared to the average national success rate of 63%.  As a result, DAP annually generates federal reimbursement for the state that far exceeds the state and county funding used to provide the services.

As you can see in the following charts, in 2008 and 2009 alone, the DAP program generated over $57 million in retroactive awards to clients to be spent in communities around the state, and almost $19 million in interim assistance – cash back to our state and local governments.  In addition, the Office of Temporary and Disability Assistance also estimates that for the 2008-09 period, DAP generated $15 million in ongoing annual cost avoidance by moving clients onto more secure and appropriate federal assistance. [19]  We would anticipate a similar cost avoidance for the 2009-10 period.  All of this was achieved with a $11.5 million investment for these two years.  $1.5 million dollars of this funding was federal Temporary Assistance to Needy Families (TANF) funding, with the remaining $10.6 million funded half by the state and half by the localities. 

The red and blue chart illustrates the impact of funding reductions on DAP provider’s ability to take on new clients.  Case openings have declined steadily over the past three years since funding for the program has been reduced.  To be able to maintain the caseload necessary to deliver the savings that are expected from the program there must be additional investments. 

The Governor funded the program at a total of $4.76 million (half state and half local dollars) in the 2012-13 Executive Budget, the same level as last year.  To begin to build back from the 30% cut, we urge the Legislature to restore $500,000 in state general fund dollars to bring total funding to $5.76 million.

4)  State Takeover of the SSI State Supplement.

The Executive Budget allows New York’s Office of Temporary and Disability Assistance (OTDA) to assume administrative responsibility for the Supplemental Security Income (SSI) state supplement.  Currently, New York pays the Social Security Administration (SSA) to determine eligibility for, and issue payment of the state supplement.  OTDA has estimated that New York State could save a substantial amount of money once implemented ($90 million annually) by administration of its own state supplement.

While the Empire Justice Center is sensitive to the State’s need to reduce costs, and recognizes that this proposal may achieve significant cost savings without reducing client benefits, we do have some concerns about this proposal.  State administration of the state supplement to SSI involves a major restructuring that has many implications for SSI applicants and recipients, as well many of the agencies with whom recipients interact such as Local Social Services Districts, Department of Health, Office of Mental Health, Office of Mental Retardation and Developmental Disabilities, Office for Alcoholism and Substance Abuse Services, and local Offices for the Aging.

Currently, SSA functions as a “one stop shop” for clients in terms of assessing disability, determining the individual’s living arrangement, providing the federal SSI benefit and then both determining the amount and providing the state supplement.  SSA issues the state supplement along with the person’s federal SSI benefit, either through direct deposit or via check.  SSA is also responsible for providing beneficiary data on a regular basis to the State Department of Health so that Medicaid and Medicare Savings Program coverage can be activated.

The executive budget proposal authorizes OTDA to assume responsibility for determining living arrangements for all state supplement recipients and issuing the state supplement payment.  Clients whose income exceeds federal SSI eligibility and who are not eligible for Social Security Disability or Retirement Income would lose access to a federal administrative forum for determining disability; OTDA would take over this function in addition to their other responsibilities in issuing the state supplement payments.  The state would bear responsibility for all notices, appeals and issues regarding overpayments.  In addition, it appears likely that OTDA would assume responsibility for communicating beneficiary information to the Department of Health.

If the state takeover provision is enacted into law, it is critical that all of these implications are carefully thought through in order to minimize the disruption to clients during and after the transition process.  Because multiple agencies are involved, we recommend that a formal, inter-agency implementation workgroup be convened in order to ensure that OTDA receives the input of all affected partners.  Client advocates also must be at the table as members of the workgroup to present the consumer viewpoint and ensure that the protections currently in place for SSI recipients, who are currently receiving their state supplement through SSA, will remain available to clients after the changeover. 

Additionally, we wish to emphasize that the payment levels for the state supplement should not be affected in any way by this proposal.  OTDA must continue meeting federal maintenance of effort requirements.

We urge the Legislature to add language to the executive budget creating an inter-agency implementation workgroup with strong advocacy representation to oversee the implementation process if New York is to move forward with the proposed takeover of the SSI state supplement administration.

Office for the Aging:

Medicare Part D Counseling and Appeals Funding Continued.

We are grateful that the Executive Budget maintains level funding for the Managed Care Consumer Assistance Program (MCCAP), a statewide initiative run through the New York State Office for the Aging (NYSOFA).  MCCAP consists of seven partner agencies that help elderly and disabled Medicare beneficiaries navigate the complicated world of Medicare Part D and access the health care they need.  MCCAP helps to save the state EPIC and Medicaid dollars by shifting costs to federal Medicare Part D coverage; it is also one piece of the critical safety net programs serving our vulnerable senior and disabled population.

MCCAP agencies partner with the Office for the Aging (NYSOFA), the Department of Health (NYSDOH) and the Centers for Medicare and Medicaid Services (CMS) to provide training, technical support and assistance to local Health Insurance Information Counseling and Assistance Program offices across New York State and other non profits working directly with Medicare consumers across New York State.  Additionally, MCCAP agencies work directly with consumers to provide education, navigational assistance, legal advice, informal advocacy and direct representation in administrative appeals.  We serve clients in their communities and provide services in their native languages; consumers also increasingly reach us via internet and our telephone helplines, as well as through our educational materials and referrals from HIICAPs.

MCCAP agencies played a critical role last year in helping to educate service providers and Medicare consumers about the major changes to EPIC and Medicaid enacted in the 2011-12 state budget.  Because there were also new rules affecting Medicare Part D that were going into effect around the same time, [20] it became enormously challenging for service providers to keep up with everything.   MCCAP partners provided ongoing and regular updates to the provider and consumers on all these changes as they were being implemented.  We also communicated regularly with NYSDOH, NYSOFA and CMS about how these changes were affecting consumers, as well as on other issues, and collaborated on opportunities for administrative improvements.

Conclusion:

Thank you for the opportunity to testify today.  I am happy to answer any questions you may have. 


End Notes:
 [1] D. Pierce, The Self-sufficiency Standard for New York State 2010 (University of Washington School of Social Work), available at: http://www.selfsufficiencystandard.org/docs/New%20York%20State%202010.pdf Rents in this study were based on the U.S Housing and Urban Development Fair Market rents, and child care costs were calculated using the market rates set by the Office of Children and Family Services for family based care for young children and child care centers for older children.
 [2] FH #5796111J(6/8/11), available at: http://otda.ny.gov/oah/FHArchive.asp
 [3] The 2011-12 supplemental state budge allocated $7 million in funding for facilitated enrollment., of which $1,540,00 went to WDI and was allocated as follows: $320,00 – Albany, $836,000- Oneida; $180,000 – Schenectady, and $50,000 for  Rensselaer. The remainder of the funding was used to administer the program. Telephone conversations with Susan F. Hains, Director of Health and Human Services Programs,, Workforce Development , 2/3/12.;2/7/12.
 [4] W.T.Eckert, Agency Presents New Five Year Plan, Hudson Register Star, published November 8, 2011 at http://www.registerstar.com/articles/2011/11/08/news/doc4eb8bb2d3d5a2684323416.txt
 [5] FH # 5954394N ((1/26/12), available at: http://otda.ny.gov/oah/FHArchive.asp. Telephone call with Jeanne Wagner,  Child Care Council of Dutchess, Inc., 2/1/12
 [6] M. Spina, Day Care Practices Prompt Questions, Buffalo News, February 14, 2010, updated August,21, 2010 at http://www2.erie.gov/comptroller/sites/www2.erie.gov.comptroller/files/uploads/pdfs/2-14-10%20Buffalo%20News%20Day%20Care%20Practices%20Prompt%20Questions.pdf
 [7] FH #5838751N (8/19/11)
 [8] Fulton County Drops Childcare Funding Until Further Notice, October 27, 2011 http://www.wten.com/story/15895948/fulton-county-suspends
 [9] J. Studd, ,Fulton County Board Extends DSS Child Care Through End of 2011, Amsterdam Recorder, November 7, 2011 at  http://www.recordernews.com/news/11172011_daycare
 [10] FH #5681172J((4/20/11); FH#5791819H (6/30/11); FH #5873738J (9/28/11). (2/7/12)
 [11] Alliance for Quality Education, Early Childhood Education: Frozen Funding Leads to Cracks in the Foundation (2/7/12), available at: http://www.aqeny.org/ny/wp-content/uploads/2012/02/Frozen-Funding-Leads-to-Cracks-in-the-Foundation-2.8.12.pdf
 [12] E. Cooper, Day care aid cut back as more families need help, Utica Observer Dispatch, November 22, 2011, at http://www.uticaod.com/communities/oneidacounty/x2128793826/Day-care-aid-cut-back-as-more-families-need-help
 [13] E. Cooper, More Day Care Cases to be Cut, Utica Observer Dispatch, December 1, 2011, at http://www.uticaod.com/m/news/x1622882900/More-day-care-cases-to-be-cut
 [14] Id.
 [15] See note 2, supra.
 [16] Id.
 [17] Id.
 [18] The numbers used to calculate savings above are based on 2009 OTDA and OCFS data which indicate that there are 62,929 TA recipients receiving child care, 3,713 of whom have a child under the age of one:

**(Assumes PA-employed individuals would not receive the exemption or would opt out)
 [19] New York State Office of Temporary and Disability Assistance, “Report to the Legislature, Disability Advocacy Program, January 1, 2008 -December 31, 2009”, pages 7-9.
 [20] The biggest change was the timing of the Part D annual open enrollment period (new period:  October 15-December 7; old period was November 15-December 30).

Supporting Documents:

Child Care Funding 2009 - 2013

Public Assistance Grant Increase as Percentage of Poverty