MINUTES OF THE JOINT SUBCOMMITTEE MEETING OF SENATE COMMITTEE ON FINANCE AND ASSEMBLY COMMITTEE ON WAYS AND MEANS Sixty-eighth Session March 15, 1995 The joint subcommittee meeting on Human Resources/K-12 of the Senate Committee on Finance and the Assembly Committee on Ways and Means was called to order by Chairman Raymond D. Rawson, at 7:30 a.m., on Wednesday, March 15, 1995, in Room 352 of the Legislative Building, Carson City, Nevada. Exhibit A is the Agenda. Exhibit B is the Attendance Roster. SENATE COMMITTEE MEMBERS PRESENT: Senator Raymond D. Rawson, Chairman Senator Bob Coffin Senator Dean A. Rhoads SENATE COMMITTEE MEMBERS ABSENT: Senator William J. Raggio (Excused) ASSEMBLY COMMITTEE MEMBERS PRESENT: Mrs. Jan Evans, Chairman Mr. Dennis L. Allard Mrs. Vonne Chowning Ms. Sandra Tiffany ASSEMBLY COMMITTEE MEMBERS ABSENT: Mr. Joseph E. Dini, Jr (Excused) Mr. Lynn Hettrick (Excused) STAFF MEMBERS PRESENT: Dan Miles, Fiscal Analyst Steve Abba, Program Analyst Mark Stevens, Fiscal Analyst Dee Crawford, Committee Secretary OTHERS PRESENT: Myla C. Florence, Administrator, Welfare Division, Department of Human Resources Janet Dieter, Project Executive, Integrated Systems Solutions Corporation John Aikens, Director of Public Sector Services, Integrated Systems Solutions Corporation Michael J. Willden, Deputy Administrator, Administrative Services, Welfare Division, Department of Human Resources May Shelton, Director, Washoe County Department of Social Services Alicia Smalley, Lobbyist, National Association of Social Workers, Nevada Chapter, Nevada Association of School Boards Nancy Peterson, University of Nevada, Reno, School of Social Work Jon L. Sasser, Lobbyist, Nevada Legal Services, Inc. Roberta Gang, Lobbyist, Nevada Women's Lobby Senator Rawson commenced discussions of welfare concerns. Myla C. Florence, Administrator, Welfare Division, Department of Human Resources, came forward to give an overview of the division. Ms. Florence recalled a number of budgets had been reviewed at a joint committee meeting of the Senate Committee on Finance and the Assembly Committee on Ways and Means on February 15, 1995. She commented many of those budgets were on the day's agenda, while others are scheduled to be reheard at a later date. She announced budgets for Medicaid and Intergovernmental Transfer Accounts, first discussed at the joint meeting, will be heard again on March 28, 1995. Ms. Florence pointed out when performance indicators were reviewed on February 15 it was noted the division served as a pilot agency for the development of performance indicators. She declared the major issues challenging the division are welfare reform, the implementation of NOMADS (Nevada Operations Multi Automated Data Systems) and Medicaid mandatory managed care. Ms. Florence said the Governor's proposed welfare reform package would be closed through three budgets, Welfare Administration, Aid to Families with Dependent Children (AFDC), and Employment and Training. She declared the proposed package would place Nevada in a position to address any national influences that stress employability rather than just eligibility. Ms. Florence provided a handout (Exhibit C. Original is on file in the Research Library.) of background information. She called attention to the mission statement on the first page of Exhibit C. She noted the exhibit includes information on caseload trends, case processing time, error trends, existing job programs, proposed welfare reform initiatives and child support collections. Welfare Administration - Page 1181 Senator Rawson stated there are a number of legislators who have expressed concern regarding the ability to achieve a reduction in caseload projections. Ms. Florence acknowledged there were errors in the Aid to Families with Dependent Children (AFDC) budget as a result of cross-training activity due to efforts to enable clients to have contact with just one Eligibility Worker to cover all programs. She drew attention to the history of error rates for Food Stamps, AFDC and Medicaid depicted on page 7 of the handout. She said the Welfare Administration budget provides funding for the eligibility staff except for those involved in Food Stamps, and it is being proposed staff for food stamp eligibility be included in the administration budget. Ms. Florence noted since 1989 the error rates have increased, and the division is establishing initiatives to mitigate the growing error rate. She declared the majority of the errors are caused by client reporting, such as changes in income. Senator Rawson inquired what effect those errors have on the programs. Ms. Florence responded improper reporting can result in overpayments to clients. She explained when errors are found the agency can require the clients to refund overpayments, but the collection rate is only about 10 percent. Senator Rawson asked if there is a trend of people learning how to work the system, and if the division is able to overcome that. Ms. Florence replied there are two issues to be considered. She said when clients were required to report monthly the agency was able to discern changes in employment or income, but the agency discontinued monthly reporting by clients due to the work load and lack of manpower. Ms. Florence stated another complicating factor has come about as a result of employees having to learn multiple programs. In order to combat the problem, she said, training efforts have been increased, and staff has been investigating error trends. She said the quality control staff has been attempting to sensitize workers through various methods including pop quizzes to enable supervisors to pinpoint issues in need of review. She declared clients must be educated to understand they are required to report changes in information to the agency. Regarding errors in caseloads, Ms. Tiffany inquired if the business process re- engineering (BPR) would be implemented once NOMADS came on line. Ms. Florence confirmed the division would be included in the department BPR study. Ms. Tiffany asked if caseloads would go down as a result of automation and increased efficiency in the work process. Ms. Florence responded the caseloads would expand due to increase in population, but she expressed the opinion the rate of growth would slow down through the efficiency of automation and reform initiatives. Ms. Florence declared child support collections should be improved as a result of NOMADS automation, which should reduce the number of people dependent on welfare. She asserted budget calculation errors will be controlled better through NOMADS. Ms. Tiffany asked what outcome could be anticipated through use of BPR in the Welfare Division. Ms. Florence voiced her belief the intent is to consider BPR in conjunction with the completion of NOMADS, because the data in NOMADS will provide for interaction between divisions within the department. Ms. Tiffany asked if the budget will show cost savings as a result of NOMADS. Ms. Florence replied there should be a savings in the long-term, once the staff is educated in the system. She asserted there should be a reduction in the number of applications with resulting economies. She said there will have to be a review and determination of the appropriate number of caseloads to be managed by Eligibility Workers, and a decision will have to be made regarding changing the focus from eligibility to employability. Ms. Tiffany inquired what impact on efficiency there might be if no BPR study is made of the division during the coming biennium. Ms. Florence answered: I really believe that we would be in a different place with NOMADS than we are today if BPR were done initially. My emphasis would be, as other automated functions are considered for either our agency or other divisions within the department, that that needs to be a careful component of that determination. And unfortunately that didn't happen in the initiation of this project, and I think that's contributing to some of the problems that we have today. Ms. Florence said in the base budget for administration the NOMADS funding was decreased and transferred to another decision module, while the information services module was increased in the event NOMADS is discontinued. Ms. Florence said anticipated caseload changes for the upcoming biennium in M-200 on page 1182 are detailed on page 2 of Exhibit C. She pointed out major increases begun in AFDC in 1991 have slowed, while there has been stabilization for the average grant participant as a result of the lack of increases in grant payments. She noted overall grant expenditures have increased. Senator Rawson recalled there had been a downturn in the state's economy in 1991, but since then the economy has improved with more jobs available. He asked why caseload numbers have grown. Ms. Florence responded it is partly attributable to growth in the population. She declared there had been 100,000 applicants for 10,000 construction jobs in Las Vegas due to migration from other states. She said many of those people had been unable to find jobs and had applied for assistance. Ms. Florence stated there is no real incentive for people to remain in very low-wage jobs when they may be better off on welfare. She said the combined benefits of medical insurance, cash grants and food stamps make welfare more attractive than low-paying jobs. She expressed hope the committee will make proposals which will negate the motivation for people to continue on assistance unnecessarily. Senator Rawson asked if it would be better to provide some type of short-term emergency assistance for people caught in the circumstance of finding welfare more attractive than jobs. Ms. Florence responded there are short-term emergency assistance programs administered by county welfare departments. She said individuals who are eligible for AFDC usually make application with both the state and county until the AFDC application is approved. Ms. Florence said requests for $1.2 million and $2.4 million in M-200 are based upon projected caseload increases of 29 percent in Fiscal Fear (FY) 1996 over FY 1994 and 13 percent in FY 1997 over FY 1996. Mr. Allard inquired what was used as the basis for the 29 percent caseload increase. Ms. Florence said caseload projections are made through the budget and statistics unit of the division on a monthly basis. She explained: The model is highly predictive. It's been within the neighborhood of about 95 percent level of confidence in our AFDC caseloads. However, your staff brought to our attention recently that some information with regard to our hotel, gaming and recreational variable that that may be improved to even a 96 percent level of predictability. Ms. Florence pointed out there have been birth rates as high as 22 percent in 1992, and there have been significant periods of growth in the past. Ms. Florence said M-300 appears in all budgets to reflect definitions, occupational studies and fringe adjustments. She indicated NOMADS is depicted in decision unit M-581. Senator Rawson asked if merit increases would be given to everyone or if they would be true merit increases. Ms. Florence replied merit increases are given based upon performance only. She declared performance standards are clearly defined. Senator Rawson speculated there will be future problems because the rate of error is one of the highest in the history of the division. He suggested the division should review the definition of errors since many of them may not technically be errors, but may actually be fraud and thus do not portray a true indication of performance. Ms. Florence attributed approximately 85 percent of the errors to clients and not to casework. Ms. Florence gave a history of the NOMADS program. She said: The NOMADS contract is the development of our integrated, automated system for all eligibility functions handled by the Welfare Division. The child support enforcement program, our employment and training program, and child care services administered by the division. The NOMADS project ... was first discussed by the Legislature in 1987, particularly when the 1988 Family Support Act was passed by Congress, and that act required all states to implement a certified system for child support by October 1995. It was not until the [19]91 session that some funding was provided for NOMADS in the design phase ... and staffing, and then funding for ... the contractor for design and implementation of the system also during that period. The contract was signed by the division with Integrated Systems Solutions Corporation (ISSC) in August of 1992, and the contractor began to work with our agency in September of 1992. The system is probably one of the most ambitious proposed, and in fact no other state ... has attempted to bring all of that functionality up at one time on a statewide basis. So while you have heard, and rightfully have been concerned, about the progress of NOMADS, I can assure you that this has been a monumental effort on the part of our staff and, I believe, on the part of the contractor as well. You'll recall in June of last year we renegotiated our contract with the contractor and it was estimated at that time there would be over 486,000 hours of development as opposed to the ... almost 145,000 hours of development that were originally estimated. Throughout this period the state has benefitted from enhanced federal participation, but as you are aware, the enhanced participation from Food Stamps ended in April of last year, the enhanced participation for AFDC will end when the Legislature ends ... and the enhanced federal participation for child support is planned to end October 1995. Ms. Florence reminded the committee they had requested representatives from ISSC be available for the present hearing. She said two representatives from ISSC were present. She introduced Janet Dieter, Project Executive, Integrated Systems Solutions Corporation, who has been working on the project on-site for approximately one year, and John Aikens, Director of Public Sector Services, Integrated Systems Solutions Corporation, responsible for all ISSC governmental projects. Senator Rawson acknowledged the delays in the program which will require major adjustments by the state. He invited comment from ISSC. Ms. Dieter provided the committee with information on the NOMADS project through Exhibit D. She reported the first phase of construction had been completed on March 1, 1995, according to the delayed projection. She explained the delay had been required to insure a high standard of quality to which ISSC is committed. She said: Demonstrations were provided to the four A and four D teams of the functionality, and that deliverable is in acceptance passed right now by the teams in Las Vegas. Senator Rawson asked if the deliverable is inferior and has major problems. Ms. Dieter replied: In ... going through the delivery process, we had received the first code deliverable from our partners and in examining that deliverable we felt there was more work required to bring it up to the quality standards which we're committed to deliver for this project. And that in turn caused the delay. Senator Rawson inquired when the pilot testing would begin. Ms. Dieter replied: ISSC is committed to deliver a quality system to the State of Nevada to meet the certification requirements by October. We're working very aggressively towards that deliverable. As I mentioned, we have experienced a delay in phase one delivery. We have done extensive work to reexamine our processes. When the project was reset last June we staffed up from 45 people on-site to a total of almost 300 staff working on this project, and that's required some implementation of new processes and refinement of those processes again to insure the quality that we are committed to deliver. We are experiencing another delay in the phase two deliverable, but at the same time we're again working very aggressively to recover task and identify opportunities to compress and recover the work that has to be done, which is a tremendous amount of work, by working towards that October deliverable. Senator Rawson asked if conversion methodology had been developed. Ms. Dieter responded: ISSC has been working very closely with the state on the conversion approach. We are responsible for the automated conversion on this project and we've expended ourself to provide the additional guidance working with Myla's [Ms. Florence] staff on the overall conversion approach and have an approach identified which we're working towards. Senator Rawson inquired,"Are we talking about being able to download or trans-load the material we have, or are we going to have to hand input everything?" Ms. Dieter replied: ISSC is responsible for the automated component of that conversion, so I defer to Myla [Ms. Florence] to answer. Senator Rawson acknowledged the Department of Information Services (DIS) will have responsibility for some of the conversion along with the Welfare Division. He stated his concern over the rate of error and the amount of time required if all the data must be input by hand. He expressed interest in the development of as much automation as possible to be used when making the conversion. Senator Rawson acknowledged there may be a delay in phase two, but the final deadline may be achieved. Mrs. Evans stated from a budgetary standpoint the Legislature is concerned a missed deadline could result in a loss of enhanced funding. She asked if ISSC is prepared to reimburse the state for loss of enhanced federal funding if the certification deadline is not met. Mr. Aikens responded: The ISSC is prepared to live up to the provisions in our contract, and we believe that provides some indemnification or liquidated damages in the contract, for example, and that the contract is in the base line.... Mrs. Evans requested amplification of the aspects of liquidated damages. Mr. Aikens replied, "There's a provision of liquidated damages for missing dates. We remember the amount to be $500 a day." Mrs. Evans asked if $500 per day would compensate the state for the loss of enhanced federal funding. Mr. Aikens admitted he could not answer the question. Mrs. Evans made a request that Mr. Aikens make calculations to see if the $500 per day would make up for the loss of a federal match. Senator Rawson voiced his understanding ISSC would have the responsibility to pick up sanctions, but he did not know what the effect would be on the enhanced rate. He declared: There was enough of a decision point in the Interim Finance Committee [IFC] when these decisions were made and the assurances were strong enough that I'm going to press forward with the idea that this will be met. And I personally will go to whatever end we can legally go to, to see that the principals are held personally responsible if they don't. And I think the committee will back that without any question. Senator Rawson vowed to revisit the matter before the end of the session and he asked staff to provide any potential remedies in bill draft form for the committee. He asserted both sides are fully aware of the necessity to resolve the problem with the understanding the state is prepared to pursue any remedy. He promised the state would cooperate in every way to complete the project. Ms. Tiffany concurred with the statements made by Senator Rawson. She asked if ISSC has contracts with other states which were in competition with Nevada for ISSC resources. She also wanted to know if ISSC has a contingency plan. She expressed lack of confidence the October deadline can be met. Mr. Aikens acknowledged ISSC has other contracts throughout the United States for which he is responsible, but he denied those contracts are competing for the same ISSC resources. He reiterated the ISSC had increased the staff from 45 to 291 people. He declared those people are fully dedicated to the Nevada project. Mr. Aikens reminded the committee the delay in the first phase had been due to "the requirement to introduce more time in the schedule to produce a better quality deliverable." He said other actions had been instituted, including an inspection and reassessment of the control processes on the project in order to implement improvements. He added, "We further increased the resource to work in that quality compliance area." Mr. Aikens said: Thirdly, we have some plans in process today where we are inspecting the remainder of the project between now and the October [19]95 date to understand what additional recovery plans are feasible and should be implemented, and we cannot at this point know what those will be although we are midstream working on that. Ms. Tiffany declared she would like to see a contingency plan with dates, action items and a guarantee of delivery of the product by October. Mr. Aikens emphasized ISSC is committed to completion of the project by the October date and is working on plans for recovery. He said: I would interpret the phrase used on contingency plans as being a recovery plan because, to make the October date, what we need to do is make up for some of the lost time that was introduced by the delay we had in delivering the first phase of the project. Ms. Tiffany declared normally on a project there is a "redline" date which indicates it will be impossible to complete the project on time. She reiterated her request for a contingency plan. Senator Rawson stated he would prefer time be spent on the project rather than on development of a contingency plan, although he agreed there will be a decision point, the date for which ISSC should inform the committee. He declared the committee would not place any demands upon ISSC that would take ISSC away from its primary plans to complete the project. He suggested ISSC representatives consult with Ms. Tiffany after the meeting. Senator Coffin asked if Mr. Aikens and Ms. Dieter were aware that any answers given to the committee are on the record, even though they had not been sworn under oath. Mr. Aikens acknowledged, "I am aware of that." Senator Coffin asked, "Have you been treated fairly by the State of Nevada in this process?" Mr. Aikens replied, "Senator, are you referring to the committee meeting or the project?" Senator Rawson interjected, "We might be interested in your opinion on either." Senator Coffin asked if ISSC had been treated fairly by the state. Mr. Aikens responded: Senator, I would have to answer that, yes, we have been fairly treated. At one point ... in the negotiations that resulted in a new contract last year, were appropriate and were a compromise for both parties. Senator Coffin queried, "So that the written record reflects ISSC's opinion that they are fairly treated, and that we have not made unfair demands on you outside the contract as well?" Mr. Aikens responded, "I would answer yes to that." Senator Coffin cautioned: Any responses you provide to us in writing, have to be considered the same as under oath, because they are a continuation of the process. Should you be asked to provide anything in writing today, they have the same standing, so we would expect you to do that. Senator Coffin expressed his appreciation for the honesty provided by Mr. Aikens. Senator Rawson announced he has instructed the staff to prepare a series of options. He requested Ms. Florence to keep the committee apprised of the progress of the project. Ms. Florence agreed to do so. Ms. Florence said: With regard to conversion, the division has been working closely with the Department of Information Services as well as ISSC in trying to develop a plan that will bring as much information over from the existing ... system into NOMADS on an automated basis as possible. However, in examining the ability to do that ... we're constrained by costs and time.... We want to design a conversion process that will continue to keep us within budget as well as be feasible both from our standpoint and the DIS staff standpoint. Ms. Florence reported her staff would have a proposal within the next 2 weeks. In the meantime, she said, conversion packets are being manually completed by eligibility staff members. She pointed out district offices are using various methods to accomplish the conversions, some through rotating teams, to familiarize everyone with NOMADS. She assured the committee the goal is to use as much automation as possible. Senator Rawson asked if Ms. Florence has any concerns regarding today's discussion with representatives of ISSC. Ms. Florence responded, "They're certainly well aware of the attention this project has received by the Legislature as well as the executive branch and our level of concern." She acknowledged the project is large and there are legitimate concerns about the work ahead. Ms. Florence declared her staff has been dedicating many hours to uphold the state's end of the project. She said: Every deliverable that has been provided to the state, if it's been a 5-day review team time, our team has spent in conjunction with DIS, 7 days a week, working through to insure that there will be no presumption that the state has not upheld their level of effort to insure the completion of this project. Ms. Florence said there had been a number of technical changes to the NOMADS budget which have been worked out with both the legislative staff and the Budget Division. She explained some had come about "as a result of what we believe will be deliverables carried over into the upcoming biennium." Ms. Florence moved on to the next module on voter registration. She explained the National Voter Registration Act (NVRA), which became effective January 1, 1995, requires that every public assistance office offer the ability for individuals to register to vote. She called the act a "partially funded mandate" because the federal government provides half the funding. Ms. Florence claimed the burden is unfair to the eligibility staff as an addition to the work load of their primary activities. She said an attempt has been made to implement a plan which would be "marginally compliant with the intent of the National Voter Registration Act" by making clerical staff available at large urban offices to assist in completing forms and submitting the forms to county clerks' offices. Senator Rawson interjected many committee members have expressed concern and reservation about the act. He asked staff to review the mandate and work with the Welfare Division. Ms. Florence requested funding be retained to print forms, even if staff is eliminated, for the Welfare Division. She explained the Office of the Secretary of State has indicated it will not provide the forms to the various public agencies. Ms. Florence testified the next module would provide for microcomputer specialists at urban offices in Las Vegas and would provide funding for training. Senator Rawson asked for assurance there is a plan to provide what is really needed as far as personnel and equipment. Ms. Florence responded the personnel and equipment requests were reduced significantly even before they had been submitted to the Budget Division. She said they had been prioritized. Senator Rawson inquired if the budget provides the proper equipment to work with the new system. Ms. Florence responded the personnel request will support not only personal computer-based equipment to be provided with NOMADS, but also all existing and developing computer functions that are not part of NOMADS. She cited management reports as an example of functions that are not part of the NOMADS system. Senator Rawson asked if the budget requests will bring the division up to satisfactory standards. Ms. Florence replied, "Not entirely, no. We have quite a ways to go." In response to a query by Senator Rawson regarding safety or thefts, Ms. Florence said there have been projectiles, such as soda pop containers, thrown at the staff. She reported the previous day one district office had received an anonymous threat. She asserted her staff is vulnerable to security issues due to the high level of stress of the clients. She expressed gratitude the IFC had provided security guards at urban offices as recommended by security consultants. Senator Rawson inquired if there is adequate security. Ms. Florence responded there may be a need to control access, and staff will require more training in how to control access. She said identification badges may provide an important first step, but more security measures may be required. Senator Rawson wanted to know if sensitivity training has been provided regarding workplace violence from coworkers. Ms. Florence replied only minimal training has been offered. She pointed out there are training requests throughout the budget to enhance efforts in the area of sensitivity training. Mrs. Evans referred to E-900 regarding the merger of the Food Stamp Program staff and operational budget with the Welfare Administration budget and asked if it would be possible to prepare two budgets, one for administration and another for eligibility functions. She voiced concern the ability to track expenditures for the central office and district offices could become overwhelming. Ms. Florence replied there has been discussion over such a proposal in the past. She stated it would be a major undertaking to separate those functions, but she acknowledged it would be proper to have one budget which would reflect only administration and another budget for support services. She hesitated to commit to separating the budget because "it will be an enormous task ... for our staff to do that." She agreed to comply if the Legislature directs her to do so. Mrs. Evans suggested that be done at the next session. Senator Rawson agreed the Legislature would like the separation, but would consider the matter later. Ms. Florence agreed to obtain feedback from the staff on the difficulty of preparing separate budgets. Ms. Florence referred to module E-400 on self sufficiency through social services and declared a preference to review all welfare reform issues as one package. She said she would like to deal with those along with the employment and training budget. In response to a question from Ms. Tiffany regarding job placement, Ms. Florence responded job development would be a function of the jobs training agency in the Department of Employment, Training and Rehabilitation in conjunction with some of the Welfare Division staff. She said the roles of the various agencies are identified in Exhibit C. Aid to Dependent Children - Page 1195 Ms. Florence declared the Aid to Dependent Children (ADC) budget recognizes increased caseloads based upon projections and provides for increased grant funding. She called attention to the request for $12.8 million additional assistance in 1996, and $19.7 million additional for 1997. She said E-400 relates to the welfare reform package proposal to slow the number of caseloads as a result of reform initiatives. Mrs. Evans asked when monthly grants of $348, which will not be increased, were established. Ms. Florence replied the grant had been increased during the 1991 session of the Legislature to $372, but during the budget reductions in February 1992 it was rolled back to $348. She said the grant for a household of three amounted to $330 from 1988 through 1991. Mrs. Evans inquired what percentage of the federal poverty level is used as a basis for payment. Ms. Florence estimated approximately 46 percent is used as a basis which she suggested is the standard of need. She said Nevada ranks thirty-second in the nation regarding the payment level, and the standard of need in Nevada ranks eleventh in the nation. She explained if it costs $699 per month for a family of three to live, the payment is less than half at $348. Regarding Ms. Florence's earlier statement that some people consider themselves better off with the combination of ADC, food stamps and Medicaid benefits than with a job, Mrs. Evans inquired if calculations have been made as to what threshold of income and benefits would encourage people to select work over welfare benefits. Ms. Florence called attention to page 12 of Exhibit C. She noted the comparison was made using a household of three persons and with one employed in a minimum wage job. She said the individual earning the minimum wage would gross $731 per month, and the AFDC grant, after deduction of various existing expenses for work and child care, would amount to $291, while food stamp benefits would amount to $255. She stated a minimum wage job would not keep someone off of welfare. Ms. Florence acknowledged the Medicaid benefit has not been calculated on a dollar value. She declared approximately one-third of those who apply for benefits apply only for health care, not for the cash grants. She estimated a person would need wages of approximately $9 per hour to no longer require benefits, assuming health care was also available. Senator Rawson asked how much it costs the state each month for medical benefits. Ms. Florence replied that depends upon age, but cost is approximately $200 per month per person. Ms. Florence noted the United States House of Representatives has proposed one block grant to states to provide funding for cash payments for child care and one block grant for employment and training. She ventured the house proposal will cap payments to the states at 1994 payment levels for AFDC expenditures and emergency assistance. She pointed out Congress has calculated it would be approximately $100 million short of meeting the budget target of $13.355 billion. She expressed the understanding the 1994 expenditure cap would be adjusted to reflect the shortfall based upon the proportion of the national total, which she calculated to be approximately .19 percent. Ms. Florence asserted the cap at the 1994 level will place Nevada at a disadvantage, and further reductions will have a significant impact on the state. She related Congress has suggested the reduction will be counterbalanced by increased state flexibility. She declared in her experience all block grants impose certain requirements upon the state. She questioned what degree of relief will accompany the block grants to compensate for the reduction in funding. Ms. Florence opined the change to block grants will impact the automated system which has been predicated upon existing rules. She said Congress has voiced the intention the block grants should become effective by October 1995. She expressed concern there will be major implications for the state, especially considering October is the projected completion date for NOMADS. Senator Rawson asked if Ms. Florence has a list of items that will be acceptable in a waiver and what will not be acceptable. Ms. Florence responded, "Under a block grant proposal ... we won't have to worry about waivers. I guess that's one of the good news perspectives." Senator Rawson questioned whether it would be acceptable if the state tries a radical change such as offering Medicaid benefits to a broader range of people and less cash payments and subsidized housing. Ms. Florence replied Medicaid eligibility can be expanded under a waiver as long as it can be shown the state is demonstrating some innovative system in the delivery of services to reach a greater number of uninsured while making certain federal expenditures would not increase. She conjectured those kinds of plans could be considered. She stated there is some question about the direction the Congress will take regarding Medicaid. Senator Rawson inquired if any states have experimented with redirecting AFDC funds to medical use. Ms. Florence replied she had not heard of those funds being used for medical services. Child Support Enforcement - Page 1199 Senator Rawson asked if an organization shift from the state to district attorneys is contemplated for child support enforcement. Ms. Florence asserted the Child Support Enforcement Program is critical to meaningful change in welfare reform. She stated the program operates in cooperation with local district attorneys and the implementation of NOMADS should change the collaboration. Ms. Florence explained once NOMADS is operational her staff would primarily be responsible for locating parents, while district attorneys will primarily be responsible for support orders, establishment of parentage and enforcement. She reiterated her belief the NOMADS system will enhance the ability to locate not only AFDC parents, but also non-AFDC parents. Ms. Florence called attention to pages 18 and 19 of Exhibit C in which the collections by Nevada for other states are reflected. She noted in FY 1994 the state was successful in obtaining $18.7 million in collections to go to people in other states, including both AFDC and non-AFDC cases. Senator Rawson commented other states do not seem to be reciprocating as well. Ms. Florence concurred. She asserted much of the credit should be given to local district attorneys. She said Nevada operates under the belief child support is important for any child, whether the child resides in Nevada or in another state. Senator Rawson inquired if it would be possible to impose a collection fee until a certain level of collections are made in order to stimulate other states into making a better return. Ms. Florence answered the federal government gives the state incentive payments, but no method of penalizing another state for failure to collect for Nevada has been determined. Ms. Florence declared it is important for orders to be enforced and collections made on behalf of the children. She noted collections are made on only about one-third of enforceable orders in the country. She averred increased enforcement would make a great impact on low income families and children and would remove much of the burden from public assistance. Ms. Evans inquired how funds are disbursed when collections are made and how much actually goes for the benefit of the child. Ms. Florence answered much depends upon whether there have been public assistance payments to the family. As an example, she said, if there is a child support order for $150 and the child has received $350 from AFDC, the parent would receive the first $50 and $100 would be applied toward grants from the Welfare Division. Ms. Florence said in non-AFDC cases nobody, not even the Welfare Division or the district attorney's office, receives a portion of the support payment. Those payments are distributed totally to the household. Senator Rawson asked if most payments are less than AFDC payments. Ms. Florence replied they usually are. Ms. Florence reported there were several technical changes to the budget worked out with the Budget Division and legislative staff. She said most of the changes were due to reductions in the general collection services contract, with resulting decreases in revenues in other accounts for expenditures. Ms. Florence declared overall $57.3 million was collected in FY 1994 in child support on behalf of children both in- and out-of-state. She said staffing requests have been based upon assumptions with regard to the implementation of NOMADS. She expressed hope that staffing requests ultimately will not be as high as originally anticipated. Ms. Florence stated no General Fund appropriations are included in the budget and some revenue will be returned to the General Fund. Ms. Tiffany asked how NOMADS would be of benefit in locating people. Ms. Florence said NOMADS will make it difficult "to be a deadbeat dad in Nevada" once the system is implemented. She explained the Welfare Division will interface with virtually all banks, major employers in the state, federal locate services recently initiated, and others. Senator Rawson interjected any person who files a federal income tax return can be located through the new federal locate service. Ms. Florence averred the most difficult absentee parent to locate is one who is self- employed. She pointed out frequently those people can be located by determining place of residence. She proclaimed significant results will come from the system, especially within the state. She acknowledged there are many absentee parents who reside outside the state which will require continuing federal initiatives to locate. Mr. Allard asked if NOMADS will help in finding parents who move out-of-state. Ms. Florence responded it will be of help to some degree to the extent that the federal interstate initiatives are continued. She explained there is a federal parent locate service that will automatically be interfaced with NOMADS in which all Department of Defense and other federal employees will be registered. She said there is already the capability to match up with Internal Revenue Service records and enforce child support judgments against those outside the state. Mr. Allard inquired if district attorneys have been cooperative. Ms. Florence replied they are very cooperative, especially those in urban areas where staff is assigned to the NOMADS development and design teams. She said their equipment is being purchased through the project with enhanced federal participation. Senator Rawson inquired if there are estimates of how many people may be receiving benefits inappropriately, such as illegal aliens or people hiding income. Ms. Florence answered the division attempts to verify legal alien status through identification papers and documents or through the Systematic Alien Verification for Entitlements (SAVE) system. She stated cash assistance is not being given to illegal aliens in any substantial amount. She said illegal aliens are eligible for emergency and prenatal care under the Medicaid program. Assistance to Aged and Blind - Page 1205 Ms. Florence called attention to the caseload graph on page 5 of the handout (Exhibit C) which indicates state supplemental payments to individuals eligible for Supplemental Security Income (SSI) and for a state supplement. Senator Rawson noted there is growth in the program greater than population growth. He wanted to know how that came about. Ms. Florence responded not only is growth due to population, but also approximately 3 years ago the Social Security Administration (SSA) relaxed eligibility requirements for disabling conditions. She admitted that should not show up in the graphs for the blind, but probably is attributable to the growth of figures for the aging population. Ms. Florence pointed out the state has provided supplemental payments to aged and blind SSI recipients, but has not made supplemental payments to other disabled persons. Ms. Florence acknowledged major issues in the budget relate to the increased administrative fee imposed by the SSA, which has increased from $3.33 in FY 1995 to $5 in FY 1996 and will continue at the $5 rate. She said as caseloads increase the administrative charges will also increase. According to Ms. Florence the other significant issue affecting the budget is related to group care initiatives with the Aging Services Division. She recalled during the last session the Welfare Division and Aging Services Division attempted to implement a program to move individuals out of long-term care facilities into group care facilities with supportive services under a waiver. She acknowledged the program has not been successful and both divisions are seeking ways to make it more effective. She said by July 1995 an attempt will be made to identify individuals in hospital settings who might go into an Intermediate Care Facility (ICF) upon discharge from the hospital, but who could safely be moved into group-care facilities. Ms. Florence added identification is being made of those currently on a Community Home-Based Initiatives Program (CHIP) who could be served in group-care facilities. Senator Rawson asked if Ms. Florence would prefer to have NOMADS completed before making any changes. Ms. Florence responded she does not want to start something new on administrative charges for SSI payments at this juncture. Food Stamp Program - Page 1209 Ms. Florence stated the most significant recommendation being made is to blend the budget into the Welfare Administration budget in order to make cost allocations for staff based upon services. She said employees who have been working solely on food stamps will be totally phased out by the end of the year. Ms. Florence noted increases for both staffing and expenses are reflected in the budget due to caseload growth. She said there is a negative adjustment in E-900 with a corresponding transfer in budget account 3228. Returning to page 3 of Exhibit C, Ms. Florence pointed out the trends in food stamp caseloads and coupons issued during FY 1995 in which $95 million in coupons were issued. She pointed out there was some leveling of caseload growth in 1993 and 1994. Senator Rawson asked if it was possible to determine if more coupons are being issued than are being returned. Ms. Florence said the mail loss is within tolerance levels and most of the issuance is done directly over the counter. She said the division has no way to determine whether coupons go unused. She indicated no knowledge of whether the number of coupons used is reported at the federal level. She acknowledged food stamps can be issued in one state and used in another because they are issued by the United States Department of Agriculture (USDA). Senator Rawson asked if it had ever been determined what happened when several batches of food stamps were found to be missing several years ago. Michael J. Willden, Deputy Administrator, Administrative Services, Welfare Division, Department of Human Resources, replied no conclusion had ever been made regarding where the food stamps went. He said a number of law enforcement agencies have investigated the loss but never made a conclusion why they were missing. He stated his belief they were stolen from the United States Postal Service. Although the stamps are marked with serial numbers, he said no redemption report is made by the USDA Food and Nutrition Service. Ms. Florence stated discussions in Congress regarding issuing block grants to the states for food stamps appeared to have been dropped, but there is discussion about placing a cap on food stamp expenditures. She explained if the cap is placed on the national program, much of the burden may fall upon the counties because the needs will continue and counties will be more aware of them. Ms. Tiffany asked if there were any recommendations for reform in the Food Stamp Program. Ms. Florence recommended simplification of the eligibility process where possible, and bringing eligibility factors into alignment between AFDC and the Food Stamp Program. She said while it is not possible to make many changes in eligibility for food stamps, many states have recently begun to cash out food stamps and put the funds into their reform packages. She explained those states must qualify for Electronic Benefit Transfer (EBT) usage in order to obtain a waiver from USDA. Ms. Tiffany asked if is possible to track situations where one person may be procuring food stamps while living with a fully employed person. Ms. Florence responded families are eligible for food stamps and eligibility is based upon income as prescribed at the federal level. Homemaking Services - Page 1227 According to Ms. Florence, the budget is financed by Title XX block grant funds to support disabled or elderly individuals in need of assistance for their daily living activities. She asserted the Homemaking Services assistance reduces the need for those individuals to have long-term care. Ms. Florence explained homemakers provide nonmedical services through assistance with meal preparation, personal care, laundry, grocery shopping and light housekeeping. She noted the performance indicators for FY 1994 show 106,718 hours were provided by homemakers. She said the figure regarding number of persons served should read "per month," and there were an average of 875 people served on a monthly basis, with over 1,100 different persons altogether served throughout the year. Ms. Florence stated the allocation for the budget is provided by the director's office. She explained from the allocation and salary requirements it is determined how many hours of direct client services can be provided. She said there have been some adjustments to the budget as a result of recent information from the director's office. For FY 1996 she anticipates the services could provide 104,034 hours and 101,529 hours in FY 1997. Senator Rawson asked if there is a shortage of Title XX funding for the service. Ms. Florence responded as funding remains constant and salaries increase the level of service has decreased. Senator Coffin asked if the Meals on Wheels funding comes from the Homemaking Services budget. Ms. Florence told him the funding is provided by Aging Services. Employment and Training - Page 1231 Ms. Florence declared welfare reform actually flows through the Welfare Administration, AFDC and Employment and Training budgets. She said since the last legislative session the division was advised to bring together interested parties to consider the entire issue of welfare in Nevada and make recommendations on how to reform the existing system. The State Welfare Reform Task Force was formed. Ms. Florence said meetings were begun in September 1993 and continued for 10 months until time for the agency to develop a budget. She said the task force was comprised of individuals from state and local agencies in fields of employment, social services and education, as well as advocacy groups, legal services and United Way representatives. Ms. Florence declared the task force considered ways to get people to consider welfare as a transitory state in which assistance is provided on a temporary basis. It targeted ways to encourage people to move into employment. She pointed out the program envisioned by the task force and incorporated into the budget is outlined on page 10 of Exhibit C. Ms. Florence stated the task force first considered how to simplify the process and standardize eligibility requirements for the AFDC and Food Stamp Programs wherever possible. She noted a recommendation was made to increase the AFDC resource limit to $2,000 to correspond with the Food Stamp Program limit. She cited another recommendation to totally disregard the value of one vehicle because in Nevada a vehicle is requisite in order to get around for employment purposes or daily living requirements. She cited the task force recommendation for the elimination of the 100 hour rule in connection with labor force requirements and the unemployed parent program. In response to Senator Rawson's request for clarification, Mr. Willden explained the AFDC unemployed parent program requires a connection to the labor force before the parent is eligible in which the person must have earned a certain amount of income in quarters prior to application for welfare. He said the rule applies in every state. Mr. Willden explained the program applies to two-parent families. He reiterated the program has two tests which require a person to have been working and earning a certain amount before the person is eligible. He acknowledged the program penalizes young families who have not had an opportunity to work, such as a teenage couple who have not been employed long enough or at a high enough level to qualify. Ms. Florence said the task force considered ways to emphasize employability and provide incentive for people to work rather than simply collect benefits. She conceded some sort of relief would have to be provided. Ms. Florence pointed out six eligibility workers are being proposed in the Welfare Administration budget which should provide an additional 15 minutes per interview in order to ascertain why people need assistance and find ways to move them away from public assistance and into self-supporting positions. She opined the extra 15 minutes would provide sufficient time to get applicants to recognize what they are capable of doing and for the staff to connect them with appropriate jobs where possible. It will enable staff to work with families with significant needs who may need social work intervention as opposed to just information and referral, she said. Ms. Florence described an agreement with the University of Nevada, Las Vegas, wherein the School of Social Work places interns in Employment and Training district offices. She said the program has been operative for 3 weeks during which time interns have assumed caseloads for 10 to 15 persons each. The interns provide intensive case management services to teenagers and young parents. Ms. Florence said: Supporting the eligibility worker and the first contact for applicants to our offices, and some limited social work intervention ... is a dramatic change for how our welfare offices have been operating. That's been the result of all of the federal changes that you've all heard about. Essentially we have created a system where the best case an eligibility worker encounters is an unmarried mother who doesn't remember the name of her father, who has never worked and has no intention of getting a job, doesn't have a vehicle and lives in public housing. It's the cleanest case eligibility-wise and if there is no incentive in the system to redirect that individual to looking at work as an option, I think this system will continue in failure. Ms. Florence explained upon the first contact with the client the Welfare Division, in collaboration with the Department of Employment, Training and Rehabilitation, coordinates efforts to broaden the ability to put people to work. She stated the Welfare Division has the resources to provide case management and to provide supportive services through child care assistance or transportation assistance to welfare recipients who are either looking for work or receiving training. Ms. Florence stated job development and training, and occasionally vocational rehabilitation, are handled through the Job Training Partnership Act (JTPA) of the Employment Security Department (ESD). She said in some areas the agency has located in the same place with the JTPA program for the convenience of clients. Ms. Florence related the task force felt assistance for independent living should be available to those people who formerly lived in poverty once they are connected with employment to motivate them to continue in employment. She cited first and last month's rent as one of the resources to be used for assistance. She said the task force proposed that all earned income should be disregarded for the first 3 months of employment for the person in order to allow the person the full benefit of earning while continuing eligibility for cash grants and medical assistance. Thereafter the task force proposed half of earnings should be disregarded for the next 9 months, she said. Ms. Florence asserted while those proposals would allow individuals to continue to be eligible for a small cash grant and yet retain earnings, the cash grant would be less than under full eligibility had the person not gone to work. She said research indicates that once people are placed in the work force, even at a minimum wage, they develop a work ethic and personal pride and satisfaction, which carries over to their children. Ms. Florence reported the task force wished to acknowledge the need for child care cost assistance for the majority of clients, who are single female parents. She referred to a budget formula on page 12 of Exhibit C showing a person who received a cash grant of $348 per month, food stamps worth $238 and worked for a minimum wage would retain all the income for the first 3 months, and the during the next 9 months the person would still be eligible for some benefits. After that period, she said, the person would only be eligible for a cash grant of $123 per month. Ms. Florence stated the task force had effectively placed a time limitation on benefits, but the proposal should encourage people to continue in employment with the hope employment opportunities would improve through an increase in wages. She suggested the entry level job should enable the person to eventually move out of the system. Ms. Florence called attention to pages 13 through 15 of the handout in which earned income disregards by other states have been charted. She pointed out most states propose use of the disregards for an indefinite period. She admitted some of their disregards are lower than those proposed for Nevadans. She made the point that Nevada puts a limitation on support but gives a reasonable time for a head of a household to obtain workplace experience and work toward self-support. She added research indicates the longer an individual remains in the work environment, the less likely the individual will return to public assistance. Ms. Florence asserted the proposal will prove the state is committed to employment of low-income individuals through long-term support for training, child care needs and work assistance. Calling attention to pages 16 and 17 of Exhibit C, Ms. Florence noted partnerships have been formed with private sector and public sector entities to advance employment goals. She averred meaningful welfare reform requires a number of institutions to interact, including those in education, employment training and public assistance. She said the commitment by MGM to reach out to low income individuals and welfare clients, depicted on page 17, illustrates the way for local communities to accept the obligation and become involved. She pointed out 75 percent of those who went to work at the MGM retained their employment. She stated the Silver Legacy in Reno is implementing a similar program in conjunction with the Welfare Division and the Department of Employment, Training and Rehabilitation. Senator Rawson inquired if the 90-day continuation of benefits would repeat after a welfare recipient has worked for 90 days, quits and goes to work again. Ms. Florence replied, "Yes, it would be cumulative. So, the year of retained earnings would be cumulative." Senator Rawson asked if an offset would be allowed for child support or if funds are budgeted for that purpose. Ms. Florence replied, "We've actually indicated that we would allow actual child-care costs, which would be verified." Senator Rawson repeated his query if any direct payments would be made for child care. Ms. Florence responded, "We ... can pay for child care for individuals with low or no income, but this would presume that people would be paying for child care if they're above what we would currently pay." Senator Rawson asked if there are provisions to provide incentives for educational training. Ms. Florence responded the agency encourages educational training prior to employment, but the primary objective is to get them into jobs that are not subsidized. Ms. Tiffany expressed concern that emphasis is being placed upon job placement. She described a test she implemented in which welfare offices, ESD, county social services, the community college and private sector agencies in Clark County were personally contacted seeking applicants for jobs paying $6 to $7 per hour. She said from that only three people appeared for an interview, two left town and the third quit after 1 day of training. Ms. Tiffany reiterated concern that state caseworkers would have difficulty tracking similar situations. She wondered if private sector companies would have better success with job placement, although she praised the work being accomplished by Carol Jackson, Director of the Department of Employment, Training and Rehabilitation. Ms. Tiffany suggested the private sector has the capability to assess skills, target the type of placement and do interview follow-up after placement through surveys of employers to determine the length of employment. She stated private job placement companies document transportation issues, tardiness and personal problems. Ms. Florence responded there were many discussions regarding job placement with the resultant decision to make use of the Department of Employment, Training and Rehabilitation. As far as job placement through the private sector, she said there had been very little consideration although she acknowledged awareness of demonstration projects utilizing the private sector in which the results were mixed. Ms. Florence voiced her opinion staff should determine employment eligibility at the beginning of the interview process. She said in the past employment was not even discussed with applicants until after they were approved for welfare. She pointed out other states have deflected a significant portion of potential welfare recipients by placing them into jobs before their cases have even been approved. Ms. Tiffany said: That's one suggestion we might want to look at.... You're right about the connection with the eligibility, but there isn't any reason we can't say in the contract that they have to have a linkage on the NOMADS computer system and contact with our eligibility people for that continuity. Mrs. Evans applauded the program established by MGM and being continued by the Silver Legacy. She asked what is being done by companies listed under the public or private partnership list on page 16 of Exhibit C. Ms. Florence responded those companies are involved in employment opportunities similar to the program at the MGM. She said the upcoming job fair on March 21 will link clients to jobs at the Silver Legacy. Mrs. Evans asked what mechanism is used to contact employers and encourage them to participate in the program. Ms. Florence explained in northern Nevada a coordinated effort between the Welfare Division and the Department of Employment, Training and Rehabilitation uses what is called the CORE (Casino Occupational Referral for Employment) team. She said CORE has worked out details on the management of referrals, including whether drug testing is required. Ms. Florence voiced the Welfare Division's intention to leave job development, other than that by mega-resorts, to ESD, but also to coordinate information among the various agencies through the teams. She indicated the list on page 16 will grow as other employees see success as a result of the coordinated effort. She acknowledged there have been problems. She said the MGM has gone the extra step to retain people by moving them around within the organization. Senator Rawson asked if those who left the MGM have been tracked to determine why they left, where they have gone and if they have found other jobs. Ms. Florence answered that information is not available. Senator Rawson concurred the human issue is important to the committee in addition to budgetary items. He anticipated the growth in caseloads will cause Medicaid to cost $20.6 million over the next 5 years. He asked if there will be sanctions if Medicaid is not cost-neutral. Ms. Florence responded when other states have found a component that is not cost-neutral they have discontinued the activity. Senator Rawson opined, "The way that this is budgeted, we have to be very aggressive from the start, and if we get a year, 2 years, 3 years down the road and something isn't working, then we've already ... missed our target." Ms. Florence declared her intention to provide the proper reporting mechanisms to track the program from the first month of operation. Ms. Florence noted much of what is being proposed is not related to grants, because grant disregards will not take effect until January 1997. She stated results are already being seen from employment initiatives. Senator Rawson pointed out the performance indicators show there will be 108 participants in 1996 and 120 in 1997. He questioned the expenditure of $2 to $3 million for job training for so few participants and suggested performance indicators should be reevaluated. Ms. Florence agreed there may be some problems regarding definitions of the indicators. She explained one indicator relates only to jobs participants, while another relates to any AFDC person who obtains a job, but who stays on the rolls with earnings. Senator Rawson requested Ms. Florence to consider the use of private job locating firms which may not cost any more than a state agency. He suggested initial screening should determine which type of agency would have the greatest potential for success under certain criteria. He opined job placement goals could be surpassed through use of private agencies. Senator Coffin suggested a study should be made of the MGM project. He suggested the people who no longer work for the MGM could easily be identified through their social security numbers and could be tracked to determine whether they are registered with ESD or back within the welfare system. Ms. Florence indicated the tracking would not be difficult, but follow-up would be labor-intensive. Senator Coffin submitted the follow-up would provide valuable information. He suggested the MGM might have an exit interview policy which could be utilized by the Welfare Division. Senator Rawson complimented participants in the task force for their efforts. He approved the relinquishment of punitive measures and suggested more aggressiveness may be needed in the future. He quoted statistics that show 80 percent of inmates in Nevada prisons and 70 percent of welfare recipients are high school dropouts. Thus, he said, job training will have to be a major aspect of welfare reform. Citing the availability of community colleges and specialized training programs, Senator Rawson said the job training part of welfare reform should be attacked. He voiced the intention of the Legislature to find ways to open up more opportunities during the interim between sessions. Ms. Florence called attention to caseload characteristics depicted on page 8 of the handout which indicates 48 percent of AFDC recipients have not completed high school. She agreed the educational system is vital to the success of welfare reform. Senator Rawson invited comment from the public on the Medicaid and welfare budgets discussed earlier. May Shelton, Director, Washoe County Department of Social Services, described the county tie-in to AFDC and Medicaid through a temporary cash assistance program. She said the county assists, for 30 days, those who have applied for AFDC. She reported state workers are completing processing within 28 days on average. Ms. Shelton offered a statement on her participation in the State Welfare Reform Task Force in Exhibit E and gave wholehearted support to the recommendations by Ms. Florence. Stating the reforms are off to a good start, she opined welfare reform efforts have only scratched the surface. Ms. Shelton urged the Legislature to expand employee and training programs to all who are interested. She approved the abandonment of punitive measures and the emphasis upon encouraging people to leave welfare for jobs. She stressed the need to do away with disincentives for welfare recipients to go to work which she asserted can be done through education and employment. Ms. Shelton said a single mother with two children on AFDC receives approximately $1,187 in benefits from AFDC, Medicaid and Food Stamps. She pointed out the same person would gross $867 per month at $5 per hour, would have no health benefits, and monthly expenses for rent, food, utilities, transportation, child care and federal income tax would total $1,370, making the person short by $503 each month. Ms. Shelton asserted that is a compelling reason for the mother or father not to go to work. Ms. Shelton declared, "If society expects a single mother to give up welfare, go to work and remain gainfully employed, we need to provide affordable housing, child care subsidies and health care for a sustained period of time." She declared the community should provide access to parenting classes and other support services. Ms. Shelton acknowledged the root causes of poverty are complex, and society needs to address those problems with prevention efforts. She opined quality prechool education should be provided along with programs to instill values of personal responsibility. She declared children must be taught how to interact positively with others. Ms. Shelton voiced the belief welfare recipients can become self-sufficient, taxpaying citizens if they are given educational, training and job opportunities, support services and case management which will assist them to stay focused on their goals. She endorsed the agency request for additional staff. Alicia Smalley, Lobbyist, National Association of Social Workers, Nevada Chapter, Nevada Association of School Boards, stated she has been employed as a rehabilitation counselor. She expressed her support for the expansion of case management services as part of the welfare reform proposal. She declared professional case management services are crucial to assist women to access services available. Ms. Smalley averred the longer a person is separated from the labor market, the more difficult it is to reattach the person to the labor market. She pointed out case management provides a variety of services, as delineated in a brochure prepared by the National Association of Social Workers (Exhibit F. Original is on file in the Research Library.), including psycho-social assessment. She cautioned some professionals who make psycho-social assessments do not know how to deal with the information gleaned and a certain level of expertise is necessary for those case managers. Ms. Smalley stated she endorses the efforts of the State Welfare Reform Task Force. Nancy Peterson, University of Nevada, Reno, School of Social Work, offered support for the proposals of the task force. She particularly subscribes to the use of social work students, which would fit in with the school curriculum. She said the school has a strong commitment to public service and working with vulnerable citizens. Ms. Peterson explained proper case management can assist the client with prioritizing and overcoming perceived barriers. She averred expenditures for appropriate case management will result in "more for your money." Jon L. Sasser, Lobbyist, Nevada Legal Services, Inc., provided a document (Exhibit G) illustrating the difficulties of a single parent who lacks the ability to earn enough for basic necessities, and Exhibit H, a pamphlet on Nevada's Welfare Reform Agenda, which gives a background of welfare activities in the state and a summary of the recommendations of the task force. Mr. Sasser recited figures from Exhibit G similar to those stated by Ms. Shelton from which he concluded training and education are necessary for welfare recipients to achieve a salary high enough to join the work force and get off welfare. He agreed it is beneficial for people to be able to work while they are in training so the separation from a work environment will not be so long that it becomes overwhelming for them to return to the labor market. Regarding earlier expressed concerns over the cost of waivers, Mr. Sasser said: Over the 5-year life of this federal waiver, [Senator Rawson] had seen some staff estimates that we were talking about a $40 million program.... I believe I'd be accurate in saying that the $40 million figure didn't take two things into account, and that the projected cost was a $9.8 million figure spread over 5 years. Two things they didn't take into account was the $40 million, I believe, included both federal dollars and state dollars, so if you back out the 50 cents on the dollar that the federal government puts up, that gets it down to $20 million. The other is that this waiver would be an experiment. Half of the population on ADC would be operating under the new rules, half would be under the old rules. So that cuts the ... $20 million figure down in half again. And I think we were talking about, in theory, $9.8 million cost, again spread out over 5 years that, if it were not cost-neutral ... the federal government in theory could come back and ask the state for a contribution. Mr. Sasser postulated the program would cost $2 million per year for the next 5 years and with monitoring the state would have the ability, under the waiver, to back out of the program at any point when it appeared to be getting into a situation that was not cost-neutral. He asserted: The $9.8 million cost may well be a fiction, based on other states' experience. Where that cost comes from is, in theory, today we have people who are getting jobs and exiting the welfare system, because under our current rules for calculating what does and doesn't count or what is disregarded, these people would lose their eligibility for welfare when they get a job, and in theory, then, if we change the disregard rule, they may keep their eligibility for a longer period of time. And that's where the $9.8 million cost is built. It is looking at that over a period of time and assuming that at least part of the population would remain on the rolls longer than they would under today's rules. Mr. Sasser continued: That is not an experience, however, of other states who applied these income disregards.... For example ... information from Illinois [shows] where their caseloads rose to remain constant despite the fact that they had greatly liberalized their disregard rules. So the cost never materialized... which would be in Nevada the $9.8 million cost. Moreover, pouring all of these efforts in, the case managers, the changes in philosophy of the jobs program as well as the belief that if you give somebody a one-time time limited increased income disregard, that that experience in the work force may lead them to be able to perform above $7.50 an hour, the division projects that instead of an 11 percent caseload growth, we could lower it to a little less than a 10 percent caseload growth, and that, again, would provide Nevada savings to cover the cost of neutrality. Citing changes at the federal level, Mr. Sasser posed the question, "Why should we act now ... should ... we wait and see how this all plays out in Washington [D.C.]?" He suggested the work performed over the past 2 years gives a picture of what is best for Nevada, and a block grant would not prevent the state from doing what is best. He doubted additional sanctions would prevent the state from following the best course, and there is no reason to wait for decisions from the federal government. Roberta Gang, Lobbyist, Nevada Women's Lobby, distributed copies of The Nevada Women's Agenda 1995 (Exhibit I. Original is on file in the Research Library.). She called attention to the section on welfare reform on pages 38 and 39. She asserted people who work should get the support they need to adequately support their families, including education training and other services which would help them get off and stay off welfare. She urged the committee to approve and fund the programs that were recommended. Senator Rawson offered appreciation for the testimony and adjourned the meeting at 10:55 a.m. Exhibit J, a note from Freeman Johnson, a concerned citizen, is included in lieu of verbal testimony. RESPECTFULLY SUBMITTED: Judy Jacobs, Committee Secretary APPROVED BY: Senator Raymond D. Rawson, Chairman DATE: Assemblywoman Jan Evans, Co-chairman DATE: Senate Committee on Finance Assembly Committee on Ways and Means Joint Subcommittee on Human Resources/K-12 March 15, 1995