MINUTES OF THE SENATE COMMITTEE ON FINANCE Sixty-eighth Session May 17, 1995 The Senate Committee on Finance was called to order by Chairman William J. Raggio, at 7:30 a.m., on Wednesday, May 17, 1995, in Room 223 of the Legislative Building, Carson City, Nevada. Exhibit A is the Agenda. Exhibit B is the Attendance Roster. COMMITTEE MEMBERS PRESENT: Senator William J. Raggio, Chairman Senator Raymond D. Rawson, Vice Chairman Senator Lawrence E. Jacobsen Senator Bob Coffin Senator William R. O'Donnell Senator Dean A. Rhoads Senator Bernice Mathews GUEST LEGISLATORS PRESENT: Assemblywoman Jan Evans, Washoe County Assembly District No. 30 Assemblyman John W. Marvel, Assembly District No. 34 Senator Maurice E. Washington, Washoe County Senatorial District No. 2 STAFF MEMBERS PRESENT: Dan Miles, Fiscal Analyst Bob Guernsey, Principal Deputy Fiscal Analyst Steve Abba, Program Analyst Jeanne L. Botts, Program Analyst Judy Jacobs, Committee Secretary OTHERS PRESENT: Don Hataway, Chief Assistant Budget Administrator, Budget Division, Department of Administration Robert P. McQuivey, Chief of Habitat Bureau, Division of Wildlife, State Department of Conservation and Natural Resources Steve Weaver, Chief of Planning and Development, Division of State Parks, State Department of Conservation and Natural Resources Wayne Perock, Acting Administrator, Division of State Parks, State Department of Conservation and Natural Resources Dorothy B. North, Chairman, Commission on Substance Abuse Education, Prevention, Enforcement and Treatment, Department of Employment, Training and Rehabilitation Kevin Quint, President, Nevada Association of State Alcohol and Drug Abuse Programs Tony Gladney, Community Affairs Manager, MGM Grand Hotel Casino and Theme Park Denell A. Hahn, Director, Clark County Social Services Tina Nappe, Director, Job Opportunities in Nevada (JOIN) Yvonne Saunders, Private Citizen Brenda Goodwin, Private Citizen Jessie Sattwhite, President, University of Nevada, Reno, Black Alumni Association Jacqueline Sattwhite, Concerned Citizen Myla C. Florence, Administrator, Welfare Division, Department of Human Resources Joni A. Kaiser, Executive Director, Committee to Aid Abused Women Alicia Smalley, National Association of Social Workers, Nevada Chapter Edward Davis, Visiting Assistant Professor of Social Work, University of Nevada, Reno Jon L. Sasser, Lobbyist, Nevada Legal Services Senator Raggio announced the first order of business would be to close budgets on the Mental Hygiene and Mental Retardation (MH/MR) Division. Nevada Mental Health Institute - Page 1039 Bob Guernsey, Principal Deputy Fiscal Analyst, referred to the net changes in the General Fund appropriation depicted on the first page of the closing packet (Exhibit C. Original is on file in the Research Library.). He said the changes are based upon the tentative closing actions approved by the Senate Committee on Finance and Assembly Committee on Ways and Means Mental Health/Mental Retardation Joint Subcommittee. He explained the net change for Fiscal Year (FY) 1996 will add $92,414, and it will add $249,155 for FY 1997. He pointed out the Senate Committee on Finance has just three budgets left to close in the division, those being budgets for the Nevada Mental Health Institute, the Rural Clinics, and the Community Training Centers. Mr. Guernsey stated the joint subcommittee indicated concern regarding budgeting for the anticipated inpatient caseload. He noted the budget provides for 40 to 41 clients, whereas the new administrator, Dr. Carlos Brandenburg, after a review of admission policies, expects the caseload will average 52 clients for each worker during each year of the coming biennium. Mr. Guernsey said, therefore, a number of required budget adjustments are included to cover the growth. Mr. Guernsey declared another major concern is due to the turnover of the medical director, psychiatric staff and a bad review by the Health Care Financial Administration (HCFA). He explained HCFA has indicated the institute will be decertified within 90 days unless significant changes are made. The joint subcommittee directed the division to make a determination of what is needed to put the institute in order, he said. Senator Raggio requested a review of the ramifications of what may occur if decertification takes place. Mr. Guernsey responded not only will it reflect badly on the facility, but also it will reflect badly on the state. He reported it will have an inordinate effect on the collection of federal receipts, ranging from $1.2 million to $2 million per year, which will, in turn, have a dramatic effect on the operation of the facility. Mr. Guernsey stated the main issue is not so much with staffing, but more with a significant lack of direction. He noted the prior medical director probably spent less than half his time in providing direction for the facilities. He added there was some question as to whom the psychiatric staff, in joint contract with the medical school at the University of Nevada, Reno, should report, and as to their responsibilities within the institute. He added the HCFA survey team discovered dramatic deficiencies in charting, social histories and medical workups. Mr. Guernsey reported the division is actively recruiting psychiatric staff and apparently has three good candidates for the position of medical program coordinator. Mr. Guernsey turned to the third page of the closing packet (Exhibit C) and called attention to number 8 which will require action. Referring to number 9, he recalled the 1993 session of the Legislature appropriated approximately $110,000 to the State Public Works Board to create a master plan for the institute. The report proposed five options which Dr. Brandenburg intends to use to develop a plan over the next 2 years and which will be presented to the 1997 session of the Legislature. He stated the recommendation has been made to issue a letter of intent to the division to report to the Interim Finance Committee (IFC) every 6 months on the progress of the plan. According to Mr. Guernsey, agencies frequently take notice of expenditures, but not of projected collections. He reported the subcommittee recommended a letter of intent be sent to the division to return to the IFC if revenue collections fall short and the agency has insufficient savings to offset the shortfall, as stated in item 12. In reference to the HCFA survey, he said, the subcommittee recommends three additional Psychiatric Social Workers and one Clerical position be added, and that some building renovation take place to meet the concerns raised by the survey team. Senator Raggio noted one of the issues raised in the survey was the lack of proper record-keeping, which should improve with the addition of staff as recommended. He said the agency feels it can meet the objectives with the addition of staff. Don Hataway, Chief Assistant Budget Administrator, Budget Division, Department of Administration, offered concurrence. Senator Rawson told of subcommittee concern over possible sanctions. He expressed hope any such action will be forestalled by the new management and new direction and with better oversight in the future. SENATOR RAWSON MOVED TO CLOSE THE BUDGET ACCORDING TO THE RECOMMENDATIONS OF THE SUBCOMMITTEE. Senator Raggio pointed out the proposal for the addition of one Psychology Intern position. Mr. Guernsey stated most other recommended changes are technical in nature, including an adjustment in an Accountant Technician position to an Accountant II position to aid in record-keeping. He said adjustments to the revenue are proposed in which new sources are added which were not included when the budget was originally constructed. SENATOR COFFIN SECONDED THE MOTION. THE MOTION CARRIED. (SENATOR RHOADS WAS ABSENT FOR THE VOTE.) * * * * * Community Training Center - Page 1081 Mr. Guernsey reported there was considerable input provided to the subcommittee by several of the Community Training Centers (CTCs), most notably Opportunity Village, and by the Washoe Association for Retarded Citizens (WARC), as well as letters and input from concerned parents of those who receive services. He noted the proposed adjustments displayed on page 9 of the handout (Exhibit C) will affect four budgets in which payments are made to training centers listed on page 7. Mr. Guernsey stated the subcommittee adjusted payment rates based upon the level of service and the staffing required by each center. He noted rates have gone out of adjustment over the past 10 to 12 years, and the subcommittee agreed to bring those into adjustment as depicted on page 7. He said an additional General Fund cost of $100,237 will be added in FY 1996, and $102,880 will be added in FY 1997, if the proposed adjustments are approved. In addition, Mr. Guernsey said, the Budget Division removed $83,699 which was left over in the CTC budget at the close of the fiscal year. He said Nevada Revised Statutes (NRS) 435.390(3) requires that any funding remaining after all bills are paid not revert to the General Fund but instead be disbursed to the CTCs on a prorated basis. He explained the subcommittee decided to restore the $83,699 each year with the expectation it will serve 19 additional clients. The subcommittee made the recommendation to delete NRS 435.290(3) in order to treat the account the same as others in state government in which remaining funds are reverted to the General Fund. Senator Raggio stated the bill, Senate Bill (S.B.) 476, has been referred to the committee. SENATE BILL 476: Revises provisions governing allocation of money from community training center account. Mr. Guernsey said the subcommittee recommended additional funding be provided to meet the waiting list for services for individuals in Clark County. It will cost $102,100 to serve 23 additional clients in FY 1996, and $105,668 in FY 1997. Senator Rawson observed the funding rates for the CTCs was inadequate in the past, so at the end of each year the state distributed the ending-fund balance among the various participants to make them whole. In order to make the system fairer and more predictable, the subcommittee has given notice the ending-fund balances will revert in the future while the rates have been adjusted, he said. Senator Rawson declared the subcommittee proposes to eliminate the waiting list as much as possible. SENATOR RAWSON MOVED TO CLOSE THE BUDGET ACCORDING TO THE SUBCOMMITTEE RECOMMENDATIONS TO ADJUST THE PAYMENT RATE USING THE PREWORK RATE AND WITH AN ADDITION IN THE GENERAL FUND FOR FISCAL YEAR 1996 OF $100,237 FOR A TOTAL COST OF $200,476, AND WITH AN ADDITION IN FISCAL YEAR 1997 OF $102,880 IN GENERAL FUND APPROPRIATIONS FOR A TOTAL OF $205,762 FOR THE CTC BUDGET, RURAL MENTAL RETARDATION, NORTHERN NEVADA MENTAL RETARDATION SERVICES AND SOUTHERN NEVADA MENTAL RETARDATION SERVICES, PLUS OTHER ITEMS REFERENCED BY THE STAFF. SENATOR MATHEWS SECONDED THE MOTION. Senator Raggio requested clarification. Mr. Guernsey responded the adjustments starting with section C on page 7 of the closing packet will be included in the closing actions, and additional technical adjustments will be required in the four accounts. THE MOTION CARRIED. (SENATORS O'DONNELL AND RHOADS WERE ABSENT FOR THE VOTE.) * * * * * Senator Raggio noted the motion incorporates the subcommittee's recommendation on the reversion of the funds which will amend NRS 435.290(3) as contained in S.B. 476. He announced the bill will be noticed for the next formal meeting of the committee. Rural Clinics - Page 1055 Mr. Guernsey reminded the committee that the joint subcommittee recommended concurrence with the recommendation of the Mental Hygiene/Mental Retardation Division (MH/MR) to stagger the openings of some of the facilities. He explained the division of MH/MR initially requested that the opening of the clinic in Lovelock be delayed by 3 months. The joint subcommittee felt that it should not be delayed beyond October 1 if the new prison facility opens. Mr. Guernsey reported the subcommittee did approve the division request to delay the opening of the facility in Battle Mountain until February 1, 1996, and that a new Silver Springs office opening be delayed until April 1, 1996. Mr. Guernsey recalled the main concern from the earlier discussion was in regard to item number 6 on page 6 of the closing packet (Exhibit C). He explained the Executive Budget recommends that a new facility be reestablished at Fernley. The joint subcommittee recommends that another office be added at Silver Springs consisting of one and one-half positions at a cost of approximately $39,842 in FY 1996 and $105,654 in FY 1997. Senator Raggio asked what rationale is given for opening a new Silver Springs office when another is being opened in Fernley, approximately 20 miles away. Senator Mathews agreed the two offices will be so close to each other that travel time will not be extensive between Silver Springs and Fernley. She proposed the patients in Silver Springs be referred to Fernley. SENATOR MATHEWS MOVED TO CLOSE THE BUDGET ACCORDING TO THE RECOMMENDATION OF THE JOINT SUBCOMMITTEE, BUT THAT APPROVAL OF THE SILVER SPRINGS OFFICE BE WITHDRAWN. SENATOR RAWSON SECONDED THE MOTION. THE MOTION CARRIED. (SENATORS O'DONNELL AND RHOADS WERE ABSENT FOR THE VOTE.) * * * * * According to Mr. Guernsey, all the closing actions by the Senate Committee on Finance for MH/MR budgets are complete. Senator Raggio announced new information on Assembly Concurrent Resolution (A.C.R.) 24 would be heard. ASSEMBLY CONCURRENT RESOLUTION 24: Directs adjustment of sums of money from issuance of certain state general obligation bonds previously authorized for expenditure for certain purposes related to protection and preservation of natural resources. Jeanne L. Botts, Program Analyst, distributed copies of a proposed amendment to A.C.R. 24 (Exhibit D). She recalled previous testimony included a suggestion funds be transferred from the Old Las Vegas Mormon Fort. She stated upon review of the budget, the Division of State Parks has come to the conclusion adequate funding will be available to finish the fiscal year without the necessity of transferring as much construction management funding into the state parks budget account 101-4162 as originally planned. In the meantime, Ms. Botts said, a proposal has been received from the Division of Wildlife to change funding on two of their projects. She noted changes for the Division of Wildlife are delineated on the first page of Exhibit D, and the adjustments proposed to either increase or decrease park projects by the Division of State Parks are displayed on the second page. Senator Raggio indicated the deletion of item 2 will remove the funding authorized for the Old Las Vegas Mormon Fort. Ms. Botts said a section appears on the third page which provides that funds will be transferred by the Division of Wildlife out of the North Pond Dike in Mason Valley account, and the Cold Spring Reservoir funding will be increased by a like amount. Robert P. McQuivey, Chief of Habitat Bureau, Division of Wildlife, State Department of Conservation and Natural Resources, reported the preference of the division to use funds from the reserve account for the Cold Spring Reservoir, rather than use funds from the North Pond Dike project. He said the reserve account is a category of funds which includes cost savings from previous projects and the repayment from Clark County of a $3 million loan, which is being repaid at the rate of $1 million per year in unobligated funds. Mr. McQuivey explained the Interim Finance Committee has approved a list of projects in November, but since that time, upon reevaluation, the division has found the outlet control structure at Cold Spring Reservoir will need replacement rather than patching. He said the North Pond Dike project in Mason Valley, upon which funds are being expended, is ongoing. He surmised there was an error in communication regarding the preferred source of funding. Senator Raggio noted the amendment will have to be changed. Ms. Botts responded a problem will result because the Division of Wildlife has $2 million for development of wildlife habitat, but they authorized projects which amount to more than $2 million. She said so far only about $500,000 worth of bonds have been sold, although more are authorized. Mr. McQuivey agreed, in order to simplify the process, to use the North Pond Dike funds, if it can be done with the understanding the division can return to request additional funds. Steve Weaver, Chief of Planning and Development, Division of State Parks, State Department of Conservation and Natural Resources, offered the approval of his division. He declared the Division of State Parks will appreciate expeditious action. Senator Rawson asked if sources of funding for the Big Bend of the Colorado State Recreation Area are still pending. Mr. Weaver responded that is an issue. Senator Rawson reported a tentative agreement has been reached with Clark County to use funds from the sale of land by the Colorado River Commission. He said the commission needs a letter requesting the funds. Senator Raggio inquired what progress is being made in the proposed transfer between Washoe County Park and the state regarding the property on Washoe Lake. Wayne Perock, Acting Administrator, Division of State Parks, State Department of Conservation and Natural Resources, stated a report has been prepared which indicates arrangements have been made between the division and the county. He declared a budget has been formulated and the project should be ready to move forward. He noted the area of concern is initial funding for equipment in order to proceed with the project. Once the project commences, he said, revenue will begin to come in. Senator Raggio asked if the land is owned by the county or leased to the county. Mr. Perock replied Washoe County purchased the property in 1938. Ms. Botts pointed out the budget, as submitted, shows income from user fees at $78,000 in the first year of the biennium, and $88,000 in the second year, which will provide operating funds and one employee to work seasonal hours. She noted the operation should be self-sufficient from fee-revenue generated at the park. She said the only exception is the request for $89,539 in a single appropriation for equipment needs. SENATOR MATHEWS MOVED TO AMEND AND DO PASS ASSEMBLY CONCURRENT RESOLUTION 24 WITH THE PROPOSED AMENDMENT. SENATOR JACOBSEN SECONDED THE MOTION. THE MOTION CARRIED UNANIMOUSLY. * * * * * Senator Raggio turned to the two new bills on the agenda, the first being Senate Bill (S.B.)224. SENATE BILL 224: Creates legislative budget office within legislative counsel bureau. Senator Dean A. Rhoads, Northern Nevada Senatorial District, testified in behalf of S.B. 224. He recalled even when he was first elected to the Assembly in 1977 and served on the Assembly Committee on Ways and Means, the difficulty of reviewing the budget was apparent. He pointed out currently there are in excess of 400 budgets with over 1,700 pages, which must reviewed each session of the Legislature. Interim studies done in 1989, 1991 and 1993 have resulted in recommendations for methods to improve the process, he said. Dan Miles, Fiscal Analyst, gave an overview of Bulletin No. 95-17, a Study of Establishing a Legislative Budget Office (Exhibit E. Original is on file in the Research Library.). He called attention to a copy of a resolution outlining the parameters of the study, found on page 35 of the bulletin. Many of the recommendations, commencing on page 22 of the report, have already been implemented, in particular the joint subcommittee process, he said. He noted another recommendation that the Budget Division and Fiscal Analysis Division, in advance of the legislative session, agree on the base budget wherever possible has been implemented. Mr. Miles added newly elected members of the Senate Committee on Finance and Assembly Committee on Ways and Means met prior to the legislative session, as proposed by the study. At that time, the committees were provided with revenue forecasts made by the Economic Forum, he said, and some information on the base budget and maintenance components recommended by the Governor was provided. Other proposals from the study being implemented, he noted, include Executive Branch submission of bill draft requests (BDRs) related to the budget by the end of the third week of the session, and modification of the floor-session schedule to permit longer morning committee meetings. Mr. Miles stated S.B. 224, which will create a legislative budget office, is a result of the study. He pointed out the legislative budget office will use the same statutory provisions as the executive budget office, with a director, making it another division within the Legislative Counsel Bureau (LCB). He acknowledged a conflict exists in which the original fiscal note, which appears on pages 19 and 20 of the report, indicates the office will be an extension of the Fiscal Analysis Division. Assemblywoman Jan Evans, Washoe County Assembly District No. 30, commended the study committee for their good work. She agreed the fiscal note will need consideration and acknowledged additional staffing and equipment will be necessary to implement the office. Although the office will require additional expenses, she opined it may also result in additional savings. Mrs. Evans concurred with the remarks made by Senator Rhoads, and cited the lack of timeliness in the dissemination of information during past sessions which made it difficult to make "the tough decisions" necessary to close budgets. She voiced her gratitude to the staff of the Budget Division which provided assistance during the study and for their candor during present budget hearings. Mrs. Evans pointed out two bills, A.B. 209 and A.B.210, have been introduced which address other aspects of the budget process. ASSEMBLY BILL 209: Provides for fundamental review of base budgets of state agencies by the legislature. ASSEMBLY BILL 210: Makes various changes regarding preparation of governmental budgets. She explained those bills will address the timetable for submission of bill drafts from the executive office, changes in the dates when state agencies must submit budgets to the executive budget office, and when information must be provided to the Legislature. Assemblyman John W. Marvel, Assembly District No. 34, testified on behalf of S.B. 224. He concurred that input into the budget making process has been lacking in the past. He noted several other state legislatures have their own budget offices, and the study committee did not take a light approach to creation of a legislative budget office. He acknowledged there will be a fiscal impact, but he agreed it probably will result in savings if the legislative process can be reduced in length. He asserted, "The $400,000 to me is a very minor investment if we can actually meet some of our target dates." Mr. Marvel referred to the other bills cited by Mrs. Evans which may redefine some of the mission statements of state agencies, and that should indicate if their activities are justified. He suggested there may be areas that can be privatized, which will be identified as a result of pending legislation regarding the budget process. Mr. Marvel declared, "If I've ... accomplished nothing else in my tenure as a legislator, if we can create a legislative budget office, I think that my legislative career has been successful." Senator O'Donnell noted the finance committee has closed approximately 150 budgets out of 435, and of the 150, approximately 5 percent have been closed according to the Governor's recommendation. He surmised that indicates the legislative fiscal staff is producing much of the budget. He concurred it is necessary and timely to move forward with the proposal. Senator Raggio added his praise to the committee which worked on the proposal and he joined in support of S.B. 224. He agreed the creation of a legislative budget office will fill one of the most basic needs of the legislative process. He cited the growth of the state over the past 2 decades in which he has served in the Legislature, and the concurrent growth in the budget. He declared the Legislature has relied on an often delayed receipt of the Executive Budget for too many sessions. He decried the fact it takes weeks to become acquainted with the budget and the requests by agencies. He declared the perception and practical effect is that the Legislature is frequently "rubber-stamping" the Governor's budget, which may put the Legislature in a fiscally irresponsible position. Senator Raggio called the government of the State of Colorado a model in which the legislature completes its work within 120 days, admittedly in annual sessions. He explained the Colorado legislature starts receiving requests from agencies in the fall, and by mid-December it has prepared a legislative budget. He strongly endorsed the method. Senator Raggio denounced those who attempt to impose additional costs upon the Legislature for programs that appear worthy and then condemn efforts by legislators to assure expenditures are justified. He cited Article 9 of the Constitution of the State of Nevada which requires that the expenditures cannot exceed the revenues of the state in any one year, and if they do, a tax must be imposed to balance the budget. He noted the proposed budget will result in a deficit budget in the second year of the biennium with $53 million more recommended for expenditures than for revenues. If the Legislature has the opportunity to produce a budget, he opined, it probably will not include a deficit. He supported approval of the proposal as soon as possible to enable the Legislature to construct a fiscally responsible budget months before the next session begins. Mr. Marvel commented that he and Mrs. Evans commend the Senate for following the recommendation to reduce the number of morning sessions and thus enable longer committee hearings, a procedure which apparently has been most productive. He voiced hope the Assembly will see fit to follow the same procedure during the next session. Senator Raggio responded it has been a good way to marshal time. Senator Jacobsen voiced agreement, but wondered where the new division can be housed since the legislative building is full. Senator Rhoads replied the staff has looked into the matter. According to Mr. Miles, if the office is made part of the Fiscal Division and adds just three new positions, the primary cost will be for the creation of a computer system. Mrs. Evans concurred space will be a concern. She noted the study committee did not delve deeply into the additional responsibility which will be placed upon the staff. She acknowledged members of the money committees will probably be required to meet with staff and expend more time in the months prior to the legislative session. Senator Raggio reported legislators in other states, where such action occurs, have found the pre-session meetings fulfilling and worthwhile, and have indicated it shortens the legislative process. In the absence of further testimony on the matter, Senator Raggio closed the hearing on S.B. 224 and opened the hearing on S.B. 428. SENATE BILL 428: Requires establishment of program for self- sufficiency of applicants for and recipients of aid to families with dependent children. A fiscal note (Exhibit F. Original is on file in the Research Library.) on the bill was distributed. Senator Maurice E. Washington, Washoe County Senatorial District No. 2, provided the committee with a book of information (Exhibit G. Original is on file in the Research Library.) on S.B. 428 which he calls the Nevada Self-Reliance Act of 1995. He praised the efforts of the LCB staff to create the bill. Senator Washington asserted the social reforms sweeping the nation present Nevada with an opportunity to reform its welfare system. He listed the three major points of the bill. The first, he said, is a self-sufficiency plan for recipients of welfare; the second will create incentives and sanctions for compliance or noncompliance; and the third will ensure that the measure will be cost-neutral. Senator Washington outlined the provisions of S.B. 428, and called attention to supporting documentation in Exhibit G. He explained the provisions redefining poverty as applicable in the State of Nevada, also documented in Exhibit G. He offered several amendments as set forth in Exhibit H and described their impact. Citing section 10, Senator Washington indicated it will apply to those who are employable and may be able to get off the welfare rolls quickly. He said the LCB Research Division has estimated 31 percent of welfare recipients are employable, and 5 percent will be ready to go to work immediately. He indicated 53 percent will be targeted as employable with assistance, and he acknowledged 16 percent have chronic problems and will be most difficult to get off the welfare rolls. Senator Washington compared the provisions of S.B. 428 with proposals made by the Governor, as depicted on Exhibit I. Describing the provisions of section 11, Senator Washington noted the transitional plan designed for each household will not exceed 12 months. Senator Raggio asked if the Welfare Division will make the original assessment and formulate the plan. Senator Washington responded the bill provides an opportunity to contract out to other agencies that make assessments of welfare recipients, such as Job Opportunities in Nevada (JOIN), a federal program, or Nevada Business Associates in the southern part of the state. Senator Raggio declared the parameters need to be outlined. Senator Washington agreed and stated a time-line will be provided. He continued his description of the bill. Senator Washington described a judicial opinion rendered in New Jersey which stated that any welfare recipient on Aid to Families with Dependent Children (AFDC) is not entitled to extra money just because the woman gives birth to a new baby. He said the decision was based on the fact the private sector does not give out raises to those who give birth while employed. He said the result has been that the illegitimacy rate in the State of New Jersey has gone down. He opined a family cap system will help Nevada. Senator Washington noted the waiver provisions under section 17 have been derived from welfare reform in other areas of the country. Those are outlined in Exhibit J. He said section 18 deals with the inclusion of fathers in the program with the intention of assisting them to become employable and thus reduce the prison population. He called attention to an article in Exhibit G reproduced from U.S. News and World Report on Why Fathers Count. Senator Raggio asked if the bill provides that the employed parent will remain eligible for extended medical benefits during the transition period if the employer requests it and if income is not greater than 185 percent of the federal poverty level. Senator Washington affirmed the query. Senator Coffin declared he is interested in the figures from the State of Wisconsin, but stated he has found no information on how Wisconsin has accomplished its reforms. He observed the bill shows great concern for the mother, with financial considerations derived as a result of shortening the benefits. He stated: What I can't see yet ... would be on the issue on why these children are born, how they are born, and, in fact, that the birth of the child, which creates the need for the benefits, is somewhat after the fact. And if we could possibly, in this bill, address the problem of how the children come about, the education of the young women and men, and whether or not you'd be interested in any assistance in birth control for these women so that we could, perhaps, find a way to short-circuit this problem before it gets to the financial catastrophe stage. Senator Washington agreed to supply information on the Wisconsin plan. As to the second query, he said the problem was considered with the hope the bill will address the illegitimacy rate in the state. He admitted there are social and philosophical factors associated with the illegitimacy, which he offered to discuss later. Senator Washington expressed hope the parenting skills addressed in section 26 will aid in reducing the amount of child abuse in the state, much of which is associated with the lack of personal responsibility found among some welfare recipients. Several sections of the bill, he said, refer to education, training and job placement. Senator Washington pointed out a comparison of the Nevada Self- Reliance Act of 1995 and a federal bill, House Bill (H.B.) 4, currently being heard in the United States Senate can be found in Exhibit G. He noted the provisions of S.B. 428 comply with the requirements for block grants in H.B. 4. According to Senator Washington, one amendment being proposed will make S.B. 428 effective on July 1, 1997, rather than July 1, 1996, at the same time the Nevada Operations Multi Automated Data Systems (NOMADS) computer system is due to come on-line, since it will be needed to implement the plan and monitor the program. Senator Washington stated Clark County uses an innovative system called the CACTUS system (Clark County Social Services Automated Client Tracking and User Support), which has wide capabilities for processing and transferring benefits electronically. Senator Washington said the cost neutrality in the fiscal note for FY 1997 indicates the program will cost just over $22 million to implement federal waivers, but the federal government recommends a test be conducted with a control group, which will cut the cost in half to $11.1 million. He explained the state share is 50 percent of that for a cost to the state of $5.6 million. Reading across the fiscal note, he pointed out savings begin to occur after FY 1999, and by 2001 the savings should be in excess of $60 million. He said for an initial outlay of $5.6 million, the total savings over 5 years should amount to approximately $25 million. Senator Washington provided a chart (Exhibit K) indicating the entire process. Dorothy B. North, Chairman, Commission on Substance Abuse Education, Prevention, Enforcement and Treatment, Department of Employment, Training and Rehabilitation, testified in support of S.B. 428. She addressed the fiscal implications of section 22 on page 5. Ms. North declared the publicly funded treatment system will have $125,356 less funding for rank and file treatment in FY 1996 than it had in FY 1992 due to unfunded mandates and federal block grant allocations. She stated there were 1,700 people on waiting lists last year who could not access treatment for periods ranging from 6 weeks to 2 months, which she called unacceptable. Ms. North asserted treatment services must be available on demand for the welfare reform package to succeed. She urged inclusion of an adequate fiscal note to shore up treatment, not only for those referred from the welfare system, but also to any Nevadan in need of such services who does not have the resources or insurance to access treatment. Ms. North declared, "Treatment works, and incentives for seeking treatment and achieving economic self-sufficiency will help many of the families trapped in poverty find a way to improve the quality of life for themselves and for their children." Kevin Quint, President, Nevada Association of State Alcohol and Drug Abuse Programs (NASADAP), spoke from written testimony (Exhibit L) and endorsed the opinions voiced by Ms. North. He provided a mission statement from NASADAP (Exhibit M). He voiced the opinion treatment should be made a part of eligibility for welfare benefits. Tony Gladney, Community Affairs Manager, MGM Grand Hotel Casino and Theme Park, told the committee about the employment program at the MGM which saved taxpayers $5 million in 1994. He said it arose out of a commitment made by the senior management team in 1992 prior to the opening of the theme park. Mr. Gladney stated the goals of the program were to provide job skills and employment for 1,200 economically disadvantaged individuals drawn from a variety of social service organizations in southern Nevada who would have had little chance of achieving even entry-level employment. Those employed received drug testing and training and, he boasted, the company was successful in accomplishing its goal by joining the private sector into partnership with the public sector. Mr. Gladney described the components of the program, saying a contract was made with Nevada Business Services. He attributed the success of training to use of the Job Training Partnership Act (JTPA) eligibility guidelines. He said approximately 45 agencies were involved, including the Welfare Division, Nevada Business Services, and the Bureau of Vocational Rehabilitation. The agencies used resources already in place, including transportation and child care services. Mr. Gladney declared the total number of those hired in 1994 through the economic outreach program (EOP) by MGM was 1,462, a number in excess of the goal. Of those 1,462 people, he said, over 800 were receiving welfare at the time they were employed. The total from EOP still employed at the end of the year was over 1,200, and the total number of those receiving welfare benefits was reduced to 600. According to Mr. Gladney, the annual gross wages, not including promotions and wage increases, amounted to $20,642,291. From that, he said, former welfare recipients received $9,495,453 in wages. He said the annual total of tips received by the EOP group was estimated at $1,968,383, from which former welfare recipients received $905,456. The annual taxes and benefits, including medical insurance, meals received free by employees, uniforms, federal income tax and other benefits, amounted to $8,203,698, he said, from which former welfare recipients received $3,773,701. He said the annual wage compensation for the total EOP group was $30,814,372 from which former welfare recipients received $14,174,611. Mr. Gladney estimated the savings to taxpayers at nearly $5 million by calculating that $3.5 million which would have been paid to welfare recipients was saved, and the taxes those employees paid amounted to approximately $1.25 million. He pointed out the former welfare recipients earned about three times as much from their jobs, $14 million, as they would have received from welfare. Mr. Gladney declared: Everyone wins in this situation. The taxpayers win. The people who were hired win. And, of course, the companies win because they are able to hire these individuals and they're able to make them self-sufficient and put them back in the mainstream. Senator Mathews stated she participated in the medical and employment portions of the program, and she intends to continue. She concurred the program is outstanding. Denell A. Hahn, Director, Clark County Social Services, testified in support of S.B. 428. She acknowledged some of the programs instituted in the 1960s have not worked as well as anticipated, dependency on public support has increased, and great sums have been spent on the endeavor. Ms. Hahn noted both taxpayers and recipients are making greater demands for success and for innovation. She expressed gratitude that the Clark County Board of Commissioners has allowed social services there to try out new things, many of which have been successful. She explained changes have been made in long-term benefits through utilization of a work search, many clients have been employed by the county, and programs such as that described by Mr. Gladney are being used successfully to find other jobs for the unemployed. She stated many of the old records are being automated in order that more time can be spent on interaction with people. Ms. Hahn stated many elements of S.B. 428 appear to be workable for many families. She asserted the use of child care, transportation, mentoring programs, parenting programs, and other supportive services will assist AFDC parents who are told they must immunize their children and must enroll them in school. She acknowledged some may not follow instructions, at which time the professional staff will be able to impart the importance of school and family planning to those parents. Ms. Hahn suggested deleting the proposal in section 38 which allows the state to withdraw money from federal block grants. She stated human services programs have had poor success competing for funding and will need all the resources available that are possible from block grants. She noted child care and social services for families will be expensive. Senator Raggio asked if the proposal in section 38 applies only if the block grant becomes available and will not require the funding the state will otherwise provide. Ms. Hahn affirmed his first question and admitted she is "nervous about it not being required." She noted there is an opportunity in federal proposals that block grants can be diverted to other areas of human services. Senator Raggio interjected the bill only provides an authorization to the IFC to change the recipient. Ms. Hahn reiterated her fear of giving away that authority. Ms. Hahn explained the county gives AFDC clients support, such as mental health drugs, while they wait to qualify for aid from state programs. She proposed a provision be inserted as a safety net for local governments because the county has a limit in its resources, and new responsibilities should not fall upon the counties. Ms. Hahn declared some people with handicaps may need longer than 2 years to get off the AFDC programs. She requested consideration be given to those people. She said those in drug treatment programs, or those with periodic illnesses that a private sector employer cannot overcome, may require longer than 2 years to get off the AFDC programs. She suggested some of those may function well in community service jobs, which could be used for the participation requirement for such people. Ms. Hahn stated self-esteem in former welfare recipients is increased when they are able to get off the welfare rolls, when they can interact with others, and when they realize they have value and worth. Ms. Hahn said the AFDC program has been an entitlement program and is staffed with eligibility workers who have been oriented to use eligibility tests and rules. She declared S.B. 428 will institute a significant change, in which eligibility workers will be asked to assess the skills and abilities of people and develop jobs for them. Additionally, she said, there has been difficulty in processing AFDC applications on a timely basis as far as eligibility. She suggested the state Welfare Division be supplemented with competent social workers, vocational counselors, or psychologists who will be able to work with hard-core families who need lots of attention. Ms. Hahn noted the bill includes a provision for evaluation for families that participate in the program. She suggested there should be some evaluation of those who drop out of the program to find out if they are living in destitution or if they have found other resources. She opined evaluation of all former participants will provide an important test of the overall impact of the program in order to discern the negative as well as positive impacts. Tina Nappe, Director, Job Opportunities in Nevada (JOIN), stated JOIN covers the northern Nevada job-training program, the area of the bill which she declared of interest to her. She commended the efforts in the bill brought by Senator Washington. She acknowledged many elements of the bill are already successfully being used by JOIN and Nevada Business Services as well as the Welfare Division. Ms. Nappe declared her concern is that the bill is so inclusive and possibly very expensive. She wondered if all welfare recipients should be included during the early, learning stage of the proposal. She suggested it may be better to focus on select groups such as is being proposed by the Welfare Division in order to develop model programs. Ms. Nappe noted the Wisconsin program is the best she has heard described, but she pointed out the state has a huge investment in it at approximately $54 million. She acknowledged much of the cost goes into early assessments, strong case management, and follow-up when people are on the job to insure they stay there, because many former welfare recipients have personal problems they are unable to deal with because they are working. According to Ms. Nappe, JTPA funds are being utilized for many training elements, but with changes coming from the federal government, those funds may not be available. She said: While I strongly support the intents of Senator Washington's bill, and appreciate his interest in modeling on successful programs like JOIN, I would caution you to really look at this aspect of that. Ms. Hahn asserted the one thing she particularly favors in the bill is the increase in Child Support Enforcement Program (CSEP) benefits to those where both members of the household agree to be involved in job training. She conceded it is important to look at the family as a whole, and she proposed that teenagers be included. Senator Raggio pointed out the bill contains proposals which differ from the Executive Budget notably that Senator Washington's bill will impose specific conditions as a requirement of eligibility such as immunization, educational progress towards graduation, cooperation with the child support process and paternity, and a family cap allowing no increase in benefits for additional children. He noted the Governor's budget encourages employment, whereas S.B. 428 requires that employment be accepted. He asked if Ms. Hahn and Ms. Nappe were speaking in favor of or in opposition to S.B. 428. Ms. Nappe responded that she was focusing on the job training portion of the bill without regard to the rest of the measure except that the use of the word "all" will make the bill extremely expensive. She advised that a more modest approach be initiated in light of current budget constraints. Ms. Hahn voiced her approval of the measure. She declared, "This brings into focus, in a much better fashion for my purposes ... all of the elements that are in various budgets with the proposal, and this does hold the Welfare Division as the primary agency responsible for the program, and I think that adds a little more definition to the program." Senator Washington interjected that, due to the federal waiver mandates, the bill is designed to be used as a test on only part of the population. He said the bill is not meant to be all-inclusive to all welfare recipients at the present time. Yvonne Saunders, Private Citizen, reported she is an ex-eligibility worker from the Reno Welfare Division office who quit her job approximately 6 months ago to return to school for a teaching certificate because she does not believe the present welfare program is working well. She said she worked for the state Welfare Division for approximately 5 years. Ms. Saunders read a statement (Exhibit N) in which she expressed the opinion that the system is not working as designed, and asserted that many eligibility workers agree with her. She commented on the growth of the welfare rolls, told of abuses of the system she has observed, and pointed out injustices and discrepancies within the program. She asserted many of those who truly deserve assistance are not getting it due to the sheer numbers of people who are receiving help, many of whom she feels do not deserve it. She said, "The welfare system is draining the taxpayers pockets, and undermining the morals and ethics of American society." Ms. Saunders acknowledged not all welfare recipients fall into such a category, but, she asserted, a very high percentage of them do. She declared S.B. 428 fills a need by redefining the definition of household. She said welfare workers can do nothing about sanctions because there are so few who work on claims and recovery. She called the situation "deplorable" and averred something must be done. Senator Raggio commended Ms. Saunders for coming forward. He asked why other eligibility workers are not coming forward if they share her views. Ms. Saunders replied part of the reason is fear of losing their jobs. She said the Nevada Eligibility Workers Association has stated there is concern over many of the issues such as household concepts and sanctions. Ms. Saunders estimated at least 75 percent of eligibility workers share her views. She declared the workers have compassion, but they see the abuse that is allowed to happen within the system. She stated paternity needs to be determined, a common failure. She related, while checking resources, an eligibility worker learned one person had just received a $3,000 refund from the Internal Revenue Service (IRS) which she spent on a stereo system. She told of a recipient who was buying pedigreed dogs for $3,000 each. She iterated she and other workers have problems with such occurrences. Senator O'Donnell inquired if Ms. Saunders or other eligibility workers have ever suggested a divorce in a situation in which a destitute couple has come to them with an ill child where the income is a little above eligibility. Ms. Saunders denied she or any worker has ever made such a suggestion. Senator O'Donnell stated it happened to him and his wife long ago. Ms. Saunders asserted she would not even tell her own relative how to manipulate the system. Senator Raggio pointed out the Governor has proposed the addition of five new social workers with a goal of adding an additional 15 minutes that each worker will have for the initial assessment interview with clients in order to determine their employability. He asked if that may be workable. Ms. Saunders opined that will not give enough time. Brenda Goodwin, Private Citizen, said she is a former recipient of state aid, presently employed by the Nevada Department of Motor Vehicles and Public Safety. She testified in support of S.B. 428. She declared most of the provisions of the bill once applied to her. Ms. Goodwin explained when she received aid in the 1970s, in order to be eligible, the recipient was required to participate in certain Comprehensive Employment Training Act (CETA) and vocational rehabilitation programs. She said while she was receiving state aid she earned her General Education Diploma (GED) through the programs because she had been a high school dropout. She took advantage of funding to go to the Reno Business College. Through all of that, she said, she was able to provide for herself and for her children, and to become self-sufficient. She offered the belief that 80 percent of those receiving aid would be willing to receive training to enable them to provide for their families. Ms. Goodwin said, "You have to push people. I feel that if I wasn't pushed, I could have been ... among the numbers, 20 years a welfare recipient, 20 years a family, down generation to generation." She acknowledged she gets angry about those on welfare because she is a taxpayer. She opined S.B. 428 will provide the means for people to become educated and to succeed. Senator Coffin asked for Ms. Goodwin's view regarding birth control options and whether the subject had been discussed when she was young. Ms. Goodwin said that had not been discussed. Senator Coffin asked, "Is it possible that it is useful for young girls to be able to be knowledgeable about artificial birth control, and I'm not talking about abortion here, but rather artificial birth control, to help prevent the creation of the problem, which we are talking about here?" He stated S.B. 428 has come about "because of a shortage of money and a sincere concern for the children that are born of the mothers, most of them unwed." Ms. Goodwin responded abstinence is the best method of birth control, and she does not believe in abortion. She pointed out birth control information is widely disseminated in today's society, yet teen pregnancy is growing. A letter from the Associated General Contractors of America (Exhibit O) and another for Action for Nevada's Children (Exhibit P), both in support of S.B. 428, were entered into evidence. At 10:02 a.m. Senator Raggio called a recess until after the morning floor session. Senator Rawson, the vice chairman, called the meeting back to order at 1:55 p.m. and resumed taking testimony on S.B. 428. He asked those opposed to the measure to come forward. Jessie Sattwhite, President, University of Nevada, Reno, Black Alumni Association, opposed S.B. 428. He said, "I have a problem with this bill, basically because ... [it is] almost on the verge of being a bill that will slaughter the helpless, give no hope to the future, and put these criminal-minded people out on me. Being a cripple, I can't defend myself." While Mr. Sattwhite acknowledged the system provided a college education for him, he charged the measure will attack the helpless, the unwed, the unfortunate, and the disadvantaged. He said, "These people don't have the means to survive without helping them." Jacqueline Sattwhite, Concerned Citizen, said she works in a program with adults who have been identified as being at risk, called Goals Unlimited. She disagreed that there is widespread abuse of the system, or lack of faith in the system, by those who rely upon it. She voiced the opinion there is widespread frustration with the system that often requires recipients to respond to questions in a certain manner which they think will enable them to acquire benefits. Ms. Sattwhite declared, "Their morals and their values are no less than all of America." She explained she works with a program that enables approximately 30 people to perform cleanup work for the Silver Legacy. She noted many of those in the targeted, at-risk group are on probation or parole, or have been part of the welfare system. She said, "I know for a fact that they want to work, that they don't want to be on any kind of assistance." She stated many congregate as early as 6:30 a.m. to ask for jobs. Ms. Sattwhite declared many of those seeking work through Goals Unlimited are unable to find jobs because they are "nontraditional" people. She asserted non-traditional programs are needed to assist them and to help them through the system. She stated many of her people do not go through JOIN or other traditional programs because the programs do not meet their needs. She said Goals Unlimited pays the recipients to attend 25 hours of instruction in a life- skills program because they are often unable to discern the importance of learning job-skills. Ms. Sattwhite reiterated she does not believe the system is abused. She said the people in Goals Unlimited are willing to work overtime, and "they walk around town with their hardhats on because they're so proud of being workers and they want everyone to know that they're working." She asserted programs for such people must be in place before the welfare system, as it is now, is abolished. Myla C. Florence, Administrator, Welfare Division, Department of Human Resources, voiced concern with some ofthe language and fiscal impact of S.B. 428. She took the position the recommendations included in the Governor's budget should be implemented, perhaps with the inclusion of some of the issues addressed in S.B. 428. She offered to work with any subcommittee to fashion new programs. Ms. Florence spoke from written testimony (Exhibit Q) and distributed two documents to the committee, the first being a fiscal note prepared by her division (Exhibit R) and a compilation of initiatives from other states (Exhibit S). She pointed out the division had just over 1 week to prepare the fiscal note, so she recognized some of the numbers may need further refinement. She said some of the amendments in Exhibit H offered by Senator Washington will have a significant impact on the estimates and will require further work. She acknowledged the impacts can be either negative or positive. Ms. Florence admitted there are some areas in which a fiscal projection has not been established, such as lines 38 and 39 of Exhibit R. She explained passage of the bill, as it stands, will present a number of data processing programming issues. She added significant training will be necessary for the overall implementation of the program. Senator Rawson requested that Ms. Florence address any specific areas she believes are unworkable or that may be cost-prohibitive. He stated the subcommittee will work with her to iron out details. Ms. Florence called attention to the fiscal impacts during the first 2 years of the biennium indicated on Exhibit R. She disagreed that the fiscal impacts in FY 1997 will be approximately $5.3 million because the bill will require significant staffing increases as outlined in the fiscal note. Ms. Florence voiced concern whether the level of assessments to be performed by the staff can be conducted by eligibility staff or employment and training staff. She said the Board of Examiners for Social Workers believes S.B. 428 is moving into the area of psycho- social assessments. Ms. Florence stated approximately 20 percent of the AFDC population participates in the jobs program. According to S.B. 428, she declared, the other 72 percent would undergo assessment and would be required to participate, resulting in the need for additional staff. She recommended a number of exemptions for the time limitation requirement that is proposed to apply to all recipients in the bill. She proposed those caring for the disabled be included among those who should be exempt from the time limitation. Ms. Florence raised a question regarding the policy issue in regard to residency in section 13 of the bill. She expressed doubt that any waiver will be granted in which a residency requirement is imposed. She added it may be questionable making individuals ineligible who own a vehicle registered in another state, but who, by virtue of their circumstances, are unable to afford registration when they move into Nevada. Ms. Florence admitted the policy of refusing a raise in benefits in which children are born after the parent has been on the welfare rolls for 10 months is included in other state waivers. She declared there is no research available that indicates that placing a family cap on benefits has had a positive correlation to reducing out-of-wedlock births. Regarding mandating that plans be reviewed every 3 months as described in section 14, Ms. Florence asserted the requirement will have a substantial effect on staffing. She called attention to the calculation of those costs on the fourth line of the spreadsheet (Exhibit R) using the same assumptions as were used in the Welfare Division budget. Senator Rawson inquired if Ms. Florence believes the 3-month review is desirable. Ms. Florence replied, "The ongoing review of case plans, as well as increasing the time of interviews, I personally would be very supportive of. But you need to keep in mind that it does result in higher staffing requirements." She agreed, when the workers only take eligibility into consideration, they become concerned with issuing benefits rather than with improving the status of clients. Ms. Florence called section 16 "interesting" with respect to providing a time-cap payment to individuals who may only have short-term needs. She said, "We have really had to ... take a leap of faith here to arrive at some of our assumptions. I understand that this provision is modeled after Wisconsin ... but there well may be cases that could be served in the short-term with a onetime payment, with the understanding that they would be ineligible for benefits after that." She said the fiscal note calculations were based upon a 3-months' average AFDC payment. In reference to section 17, Ms. Florence stated the proposal in S.B. 428 will provide "less in-pocket monies to recipients as they are wage earners than the Governor's plan." She called the proposal to bring fathers into the family picture in section 18 very good. She said the cost for educational and job training in order for fathers to eventually provide full-time support to families is found on line 8 of Exhibit R with the requirement for a significant investment calculated at $27 million over the next 5 years. However, she noted, that will be offset by $7.1 million if the benefit increases to families can be eliminated, as depicted on line 9. Ms. Florence stated existing rules provide for the extension of medical and child care benefits to those who receive employment, but the provisions of S.B. 428 may have the effect of reducing the number of individuals who will qualify. She voiced concern over the provision because it may not provide incentive to employers to provide medical coverage. Ms. Florence said assumptions used for the dental and vision coverage were based upon a survey of employment and training staff who felt that 10 percent of clients will require extensive dental work in order to be readily employable. She surmised vision care should not be an issue since it is presently provided through Medicaid. The estimated costs are found on line 11. Ms. Florence declared no fiscal note has been prepared for alcohol and drug abuse prevention, and the information can be obtained from the Department of Employment, Training and Rehabilitation. Ms. Florence reported the superintendent of the State Department of Education has voiced objections to the provisions of sections 23, 24 and 25 of S.B. 428 regarding school attendance, immunizations and adult education. She expressed concern over the ability of her staff to monitor academic progress and opined it will be more appropriate for the State Department of Education to do so. She added reliance will have to be placed upon public health clinics to administer and keep track of immunization. Ms. Florence offered support for funding parenting skills as proposed in section 26 of the bill. She estimated costs based upon a typical registration fee of $50 with an average of 10 hours. Ms. Florence pointed out not all pending Supplemental Security Income (SSI) individuals will be eligible for services under the provision for job requirement exemptions in section 27. She noted it may be difficult to provide jobs or training for many who live in remote areas of the state where facilities and staff are limited or nonexistent. Ms. Florence said the figures on line 16 of the fiscal note (Exhibit R) apply to all the mandatory exemptions noted in S.B. 428. Calling attention to section 28, job placement services, she said she would have to rely upon the Department of Employment, Training and Rehabilitation, from which a fiscal note can be obtained. Ms. Florence voiced support for any increase in the availability of child care, but she denied child care vouchers should be used. She asserted it will create a new system for her department. She expressed doubt over the intention to refer outstanding claims to private collectors, but she acknowledged the division has many types of debts owed to it, and the collection rate averages 10 percent of overall debt. Ms. Florence asserted the complexity of the bill is of great concern. She drew attention to the comparison of the provisions of S.B. 428 with actions in other states and with the Governor's proposal as set forth in Exhibit S. She noted success-rate information from other states has been limited, since most of the waivers are either newly approved or have not been implemented yet. She stated the Department of Health and Human Services no longer requires the inclusion of cost savings as part of the waiver application of budgets. She explained the department only requires assurance that the overall program will be cost neutral. Senator Rawson inquired if there are any issues that Ms. Florence feels she cannot implement, aside from those she identified as resulting in poor policy. Ms. Florence responded, "Given either time, money or staffing, we could probably implement anything within the proposal. Some will be more difficult than others, and, again, without having more detail with regard to the expectations of the division, it's hard to fully address that." Joni A. Kaiser, Executive Director, Committee to Aid Abused Women (CAW), spoke from written testimony (Exhibit T) against S.B. 428. She commended the decision to study the measure further in subcommittee due to its complexity. Alicia Smalley, National Association of Social Workers (NASW), Nevada Chapter, expressed opposition to S.B. 428 as written. She distributed a memorandum (Exhibit U) in opposition to the bill. She called it "punitive to Nevada's women and children." She said the NASW has long supported welfare reform at both the national and state level that will help families achieve self-sufficiency. Ms. Smalley said during her experience with the Work Incentive Program (WIN) conducting psycho-social assessments on adults and children she developed self-sufficiency plans. She declared that without supportive social case management services many families will not achieve success. She indicated 95 percent of adult recipients are women, and those who apply for AFDC need the help of skilled professionals. Ms. Smalley said: The comprehensive assessments, which are proposed in this bill, which are spelled out as needs of the household, including, but not limited to needs relating to education, child training, transportation, child care, health care and treatment for substance abuse, are clearly tasks in which the social workers are trained to perform. Establishing and writing goals and objectives with time lines to enable the household to attain self- sufficiency is part of the core curriculum in social-work educational programs ... Ms. Smalley cautioned the administration about using workers without training to perform complicated assessments and plans. She noted that social workers and eligibility workers receive the same pay. In response to an earlier statement made by Senator Coffin, Ms. Smalley said WIN social workers made family planning assessments and did follow up to insure people's needs were being met as far as trying to avoid further pregnancies. Senator Raggio voiced concern as to how to make the process better. He pointed out everyone seems to believe the welfare system, as it is now, does not work. He noted the Governor's program stresses the work ethic and employability. He surmised S.B. 428 is an attempt at meaningful welfare reform, but the Governor's proposal advocates the hiring of more social workers to determine employability. Senator Raggio recalled a small number of new case workers were scheduled to be hired and placed in the regional offices to allow an additional 15 minutes with each applicant in order to determine not only eligibility, but also employability. He stated the committee has been informed that will result in large savings in the second year of the biennium. He declared he remains unconvinced that an additional 15 minutes will have much impact. He asked if the addition of 15 minutes will enable the worker to determine employability, and if it will have positive results sufficient to reduce the benefits by millions of dollars within the next 12 months. Ms. Florence responded the Governor's proposal will add six eligibility workers under the assumption they will make it possible to add 15 minutes to each interview. She said another five social workers may be added in order to place a social worker in every urban office. They will work in conjunction with social work interns, through the University of Nevada, Las Vegas, and perhaps through the University of Nevada, Reno, and will take on the more difficult cases that require intensive case management. She remarked the eligibility staff will be teamed with employment and training specialists under the Governor's proposal. Senator Raggio reported the subcommittee not only supported the proposal for additional staffing, but also added to it. He repeated his query as to whether the additional 15 minutes was proposed specifically to determine employability. Ms. Florence replied additional social workers are not being added to determine employability, that task will be done by eligibility workers. The 15 minutes, she said, has nothing to do with the social work component. Senator Mathews wondered what the caseload is for employees in Washoe County. Ms. Florence answered the average caseload statewide is just over 270 per worker, and the case standard is 258 for eligibility workers, not for case management. Senator Rawson inquired about the work load for case workers. Ms. Florence responded, "Currently we don't have any social workers within the agency. That was one of the components that was stripped away." She warned that the needs cannot be met with the addition of one additional social worker in each urban office, who can handle 45 to 50 cases at any one time. She commented that neither Clark County nor Washoe County abandoned social workers in their organizations. Senator Rawson said it is interesting to note that the social workers have come out in opposition to a plan that adds social workers and will be centered around social workers. Ms. Florence responded she had not heard that social workers oppose the plan. She said they oppose some of the components of S.B. 428 as proposed by Senator Washington. Ms. Smalley interjected that the part of the plan to which she objects is the long assessment included in the plan, but without the provision for social workers to do the assessment work. She offered to work with other staff and legislators to resolve the problem. Senator Rawson stated he interprets the bill to mean social workers should do the assessments. Edward Davis, Visiting Assistant Professor of Social Work, University of Nevada, Reno, testified in opposition to S.B. 428. He declared he would like to support a welfare reform bill that is positive and constructive, but he found flaws in the bill in terms of providing outcomes. He stated his major concern is that many problems listed in the bill cannot easily be assessed by eligibility workers. He pointed out there may be many mental health, marital, and family violence problems which eligibility workers are not qualified to assess. Mr. Davis asserted professional social workers are needed. He added the assessment is only the beginning of the process, and there should be careful case management, follow-through, advocacy, problem-solving, working with agencies, and intervention to help people carry out their plans. He said those all require social- work skills, and he suggested 100 social workers might be more appropriate to carry out Senator Washington's proposal. He stated the two schools of social work will graduate approximately 40 people with their Master of Social Work degrees as well as another 50 with Bachelor of Social Work degrees, all of whom will be qualified to perform the duties required to succeed with the proposals included in S.B. 428. Mr. Davis voiced concern with the clause in the bill that says participants must complete a skills-training program and with the clause that the welfare department should provide placement services. He declared it is likely that most of the graduates of such programs will be placed in minimum-wage jobs in the beginning, at a rate of $4.50 per hour, which only provides $185 per week, or $7,680 per year. He said that means child care and health care will have to be provided for such families. He pointed out the poverty level is approximately $13,000 per year, so it is illogical to believe a family can survive on $7,680 per year. Mr. Davis suggested an appropriate reform bill would provide supplemental services for families, such as health care and child care, until they can move up the salary scale to a level at which they can become self-sufficient. Mr. Davis called many aspects of the bill "punitive," such as the proviso against providing services for babies born 10 months after application for services is made. He stated, "People do not get pregnant in order to get $59 a month, which would be the additional amount." He labeled the assumption that it will discourage pregnancies as "naive." Mr. Davis stated it is punitive to hold participants responsible for their children's enrollment and progress in school, and he opined that will be difficult to assess. If it is assumed many of the recipients have poor parenting skills, he said, it is senseless to place them under the contingency of losing benefits if their children do not attend school regularly and show progress. Senator Raggio asked, "Whose responsibility is it for children to go to school?" Mr. Davis replied, "It is the parent's responsibility. However, I think to threaten the parents to be removed from a program such as this, if the children don't do it, is extremely ... [poor]." Senator Raggio commented, "Isn't it important to provide some incentive ... for parents to see to it that children go to school, stay in school, perform, don't drop out." He acknowledged the problem is not so simple, but that is an important problem that has not been addressed. He said, "If we continue to ignore the fact that parenting or lack of parenting is the biggest contributor to the dropout problem, I think then that you and I really differ." Mr. Davis responded, "What I'm questioning here is the punitive nature of threatening parents that they're going to be removed from the program if they do not fulfill this responsibility." Senator Raggio asked what incentives can be offered, or how such people can be reached. Mr. Davis replied, "All of our research in behavioral change shows that positive incentives are much more productive than negative incentives. " He declared ways should be found to reward people for staying on the program and to make them feel better for keeping their children in school. Senator Raggio remarked, "I don't think that you are going to solve the ... acute problem of dropouts ... without directing some attention to parents to see to it that children perform and stay in school and avoid truancy." He noted Nevada supposedly has the highest dropout rate in the nation. He voiced disagreement with an approach to reward parents whose children achieve. Mr. Davis responded it is a mistake to attribute the dropout problems to families. Senator Raggio interjected he did not say that, he stated his belief that the major cause of dropouts is the lack of parenting. Mr. Davis rebutted there are major societal problems related to those issues. Mr. Davis reiterated that the evaluations and the services provisions in the bill need to be performed by social workers. Jon L. Sasser, Lobbyist, Nevada Legal Services, declared he served on the Governor's Welfare Reform Task Force from which the proposals in the Executive Budget were derived. He pointed out S.B. 428 is a compilation of perhaps 20 major policy considerations. He suggested each issue includes fiscal and administrative considerations, and each deserves about 3 hours of debate. He concurred everyone can find portions they like and dislike. He asserted the bill needs more in-depth consideration. Mr. Sasser contrasted the bill to the Governor's suggestions. He noted the task force would have added more staff if it believed it could spend another $45 million to implement recommendations. He noted S.B. 428 provides for 150 new staff members in the first 2 years of operation, and raises the level of funding for many good programs. He said the task force focused on use of current staff with only small additions. Mr. Sasser voiced the opinion 15 minutes will not provide the time necessary to assess employability, but it may give time for those with proper training to discern what the barriers to employability may be and to give a "quality" referral to someone else to make the in-depth assessment either on the employment side or on the social- work side, depending upon the barriers. Mr. Sasser pointed out the Governor's recommendation lacks the fund-raising mechanism provided in S.B. 428. He declared much of the fund-raising included in S.B. 428 assumes many people will go off the welfare rolls due to jobs and self-sufficiency. He opined many will go off the rolls and will have no other resources to access. Mr. Sasser projected the savings will be reduced by the amendments proposed earlier in the day by Senator Washington. He declared the fiscal impact of the budget reaches out to budgets beyond the Welfare Division. He stated many other portions of state and local government will be negatively impacted by S.B. 428. As an example, he noted there are 1,700 people on a waiting list for alcohol and drug programs, whereas no expansion of those programs is included in the fiscal note. Mr. Sasser opined parents may not be able to keep their children if they are not able to provide the basic necessities for them. He said a child in foster care will cost approximately $304 per month as opposed to $59 per month if the child stays at home. He cited testimony in the Assembly on another bill that the real need per child is $599 per month. Mr. Sasser surmised at the end of 2 years many of the counties will have to assume responsibility for welfare recipients taken off the rolls. He agreed a safety net should be included in S.B. 428 to protect the counties. Turning to the subject of sanctions, Mr. Sasser said any sanction that will take away the entire income of a family is going to result in great harm to children. He acknowledged sanctions are needed sometimes, but further evaluation should be made. He suggested there should be tests to determine whether or not the sanction is needed. Mr. Sasser disagreed that the extra funding paid to recipients for extra children provides incentive to mothers to bear extra children. He declared AFDC families are having less children on average than those who are not on the program. According to Mr. Sasser, in spite of the benefits of immunizations, welfare recipients should not be singled out. He suggested drivers' licenses should be given only to those people whose children have good attendance at school or who have their children immunized. He said the test should be whether there is a connection to the welfare program. He agreed child support enforcement has a definite connection, in which an attempt is made to obtain support from the father in order to effect a savings for the state. Mr. Sasser averred that sanctions should be imposed only if they may change behavior. As an example, he said results of a program in Wisconsin show school attendance has not improved by the threat of sanctions. Mr. Sasser asked, "Is the sanction fair? Does the crime fit the punishment?" He asserted it is unfair for a family to lose the entire family income if not all children receive immunization. Mr. Sasser suggested the provisions of S.B. 428 are not administratively feasible. He said the Washoe County School District does not keep track of whether absences are excused or unexcused because there is no mechanism of keeping track of such things. He asserted that would mean the provision could not be easily administered. Mr. Sasser took issue with the subjective language in S.B. 428. He said: I think it's a full employment bill for one social worker and two lawyers. There are many subjective terms in here, and many subjective judgements that will have to be made. Is somebody from a suitable home, do they have low self-esteem, which now is one of the criteria, one of six tests to be eligible? Every 3 months, is progress being made under this plan? Is there substantial compliance with this plan? That one ... requires trained social workers who we don't have currently on staff ... and ... every decision on these sorts of subjective bases are going to be open to challenge in terms of the legal basis. Mr. Sasser opined the most important problem will be the impact on children. He declared the provisions of section 16, in which a payment may be made on a onetime basis, could be subverted to his own use by a drug abuser instead of being used for the benefit of his family. Mr. Sasser voiced his concern that the portions of the system that do work may fail in the future, and that families may break up because they will have no means of support after 2 years. He called the Governor's proposal "a modest step in the right direction," while he asserted S.B. 428 will "make political guinea pigs out of children at a high risk of family breakup." He urged the committee to reject the bill as presently written. Senator Raggio agreed to schedule another hearing on the matter, if necessary, while he requested that Senators Rawson and Mathews serve as a special subcommittee on the issue. Senator Washington concluded that the amendments will have a significant impact on the fiscal note, especially the amendments to sections 9 and 10 which will exempt certain recipients from the self-sufficiency program. He summarized the key concepts of the bill, saying: S.B. 438 provides individualized self-sufficiency plans targeting the groups of clients needing education and training, as well as those that are employable immediately. [It] provides for a series of incentives and sanctions for staying on the program, limits the term of assistance for most recipients to 2 years in a 5-year period, emphasizes employment and training requirement for clients, [and] provides the necessary support services for employment. [It] requires acceptance to jobs offered, provides increased paternity and child support activities as a condition of client participation, and allows sanctions against deadbeat spouses who are not providing for their own families. Senator Washington urged support for S.B. 428. He argued that the bill will not be punitive. Instead, he asserted, the current system has already become punitive and has become demonstrative to children based on current activities. Senator Raggio recognized the debate well may be ongoing in every legislature in the country as well as in the United States Congress. He declared many of the issues proposed are helpful and there have been important initiatives in various approaches discussed during the session. He invited anyone with new information to present it to himself or to Senator Rawson. He pointed out that even if some of the welfare budgets are closed, it will not preclude reopening some of them if the issues warrant it. Senator Raggio adjourned the committee hearing at 3:15 p.m. RESPECTFULLY SUBMITTED: Judy Jacobs, Committee Secretary APPROVED BY: Senator William J. Raggio, Chairman DATE: Senate Committee on Finance May 17, 1995 Page