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ARIZONA STATE SENATE |
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45TH LEGISLATURE FIRST REGULAR SESSION
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MINUTES OF COMMITTEE ONFAMILY SERVICES |
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DATE: |
February 7, 2001 |
TIME: 8:30 a.m. |
ROOM: SHR 3 |
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CHAIRMAN: |
Senator Hartley |
VICE CHAIRMAN: |
Senator Hellon |
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ANALYST: |
Barbara Guenther |
COMMITTEE SECRETARY: |
Carol Dager |
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INTERNS: |
Keyina Sears ASSISTANT ANALYST: Kathy Seeglitz |
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ATTENDANCE |
BILLS |
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Committee Members |
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Ab |
Ex |
Bill Number |
Disposition |
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Senator Bowers |
X |
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SB 1392 |
HELD |
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Senator Lopez |
X |
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SB 1426 |
DP |
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Senator Petersen |
X |
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SB 1436 |
DP |
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Senator Solomon |
X |
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SB 1440 |
DISCUSSION/HELD |
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Senator Hellon, Vice Chairman |
X |
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SB 1487 |
HELD |
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Senator Hartley, Chairman |
X |
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SPECIAL PRESENTATIONS
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TANF, Stefan Shepherd, Joint Legislative Budget Committee |
GOVERNOR’S APPOINTMENTS
Name Position Recommendation
Tape 1, Side A
Chairman Hartley called the meeting to order at 8:45 a.m., and attendance was taken. For additional attendees, see sign-in sheet (Attachment A).
APPROVAL OF MINUTES
Without objection, the minutes of the January 17, 2001 were approved as distributed.
PRESENTATION
TEMPORARY ASSISTANCE FOR NEEDY FAMILIES (TANF)
Stefan Shepherd, Joint Legislative Budget Committee (JLBC), stated that TANF is a block grant that was established in 1996 by the federal government. The State receives a flat block grant every year to help pay for services for needy families. He referred to a handout entitled, TANF Block Grant Appropriations/Recommendations (Attachment B), that outlines in broad terms the revenues and the recommended TANF expenditures under the JLBC recommendation from FY 2001 through FY 2003. The opening balance is the balance of unspent TANF block grant monies as of July 1 of each fiscal year. TANF is somewhat unique in that if all the TANF block grant allocation is not spent in a particular year, the money goes back to Washington, but the state is allowed to spend it in future fiscal years. In FY 2002-2003, the state is expecting fewer TANF revenues because the Native American tribes are allowed to operate their own welfare programs. If the tribes have a plan approved by the federal government, they will be allowed to take a cut of the State’s TANF block grant directly from the federal government. The State will not see those dollars, they will go directly to the tribes. In order to better reflect exactly what the State would receive starting in FY 2002-2003, JLBC backed out about $19 million worth of tribal revenues that would go directly to the tribe rather than to the State. Although the TANF block grant revenue is flat, the State has also received in past years what is known as a supplemental grant because Arizona is a fast growing state. That supplemental grant for some reason was not authorized in the original federal legislation for federal FY 2002. The grant was established for five years through federal FY 2002 and the supplemental for some reason was only authorized for federal FY 2001. That is about $24 million a year on a full year basis because it does not take effect until the second quarter of State FY 2002. That is why Arizona does not get the full effect of the decline until State FY of 2003. The State will be down to $203 million of TANF revenue in State FY 2003.
The next two lines of the table reflect bonuses that the State has earned for performance in a couple of areas. There is a $20 million bonus related to the fact that the State was one of the top five states in the nation in reducing out-of-wedlock birth rates. The second bonus has to do with the State’s success in placing welfare clients into Job Opportunity and Basic Skills Training (JOBS). These are onetime bonuses and it is not assumed that they will continue. The balance decreases from year to year leaving an ending balance of unspent TANF block grant monies at the end of State FY 2003 of about $20 million.
In response to Senator Hellon questioning about bonuses, Mr. Shepherd stated that bonuses could come and go. The table is listing worst-case scenarios. The only other worst-case scenario would be if the federal government comes in and reauthorizes to cut TANF funding.
Senator Lopez asked if there is any thought of resubmitting for the supplemental grant. Mr. Shepherd responded that it is entirely possible to push for supplemental grant funding in Federal FY 2002.
Mr. Shepherd referred to the final line of the report, indicating that the State is significantly spending more TANF dollars than they are taking in. There is a $4 million shortfall reflected in FY 2001 and after removing two bonuses of $26 million, the yearly shortfall is $30 million.
He referred to the front page of the handout that shows the State FY 2000 and 2001 appropriations. Note that the recommendations for FY 2002 and 2003 in Administration stays fairly flat. The only significant change is that the $2.7 million appropriated to the Department from the last high performance bonus goes away. That appropriation will not continue.
In response to Senator Hartley, Mr. Shepherd stated that the bonus of $2.7 million was because of the State’s success in job placement. The Legislature decided to appropriate those monies to the Arizona Department of Economic Security (DES) for bonuses to the workers that did work relative to job placement.
He further stated that the finger imaging monies were appropriated in the budget in FY 1999 to do finger imaging for the cash benefits and food stamps areas of the welfare program. This is not the finger imaging related to Medicaid and Arizona Health Care Cost Containment System (AHCCCS) eligibility.
In response to Senator Hartley’s question concerning finger imaging, Mr. Shepherd stated that there have been a variety of studies and it does have some effect in reducing welfare rolls, but the long-term effect may be less intensive. Senator Hartley stated that it does not uncover fraud the way they had anticipated and it is very expensive administratively. Mr. Shepherd stated that DES has done some analysis of what they believe may have been saved, related to finger imaging on the food stamp/cash benefit side.
Mr. Shepherd stated that JLBC has moved $700,000 that was appropriated in a separate bill last year into the DHS budget.
Mr. Shepherd noted that the operating budget change from FY 2001-2002 is a technical change because of federal regulations related to administrative spending. This is a $10 million technical item. TANF cash decreases significantly due to the tribes operating their own welfare programs. $15 million of the $19 million was related to TANF cash benefits. Another change is the $10 million technical shift. TANF spending and cash benefits were decreased by $20 million and increased the general fund spending by $20 million. That is another reason for the significant decrease. Further, the JLBC recommendation includes a decrease of about $13 million in FY 2002 and $10 million in FY 2003 because caseloads are going to be below the appropriated FY 2001.
FLSA supplement stands for Fair Labor Standards Act supplement. There is a requirement that welfare clients in community placement JOBS be paid the equivalent of minimum wage. This supplement line item ensures that happens; however, the caseloads have not been as high as originally projected.
The two changes in Aging and Community Services is an increase of about $1.3 million each year related to backfilling some of the social services block grant cuts that occurred. Two to three years ago the federal government reduced funding which funds a wide variety of social service needs across the agency. The Legislature at the time backfilled some of that cut. Basically, the $1.3 million continues the Legislature’s support of those programs. Also, the Marriage Skills Commission was part of the bill that passed last year. It appropriated $1.2 million for Marriage Skills Commission. JLBC continued funding for noncaseloads specific to TANF programs. The Governor’s recommendation eliminated programs such as the Marriage Skills Commission.
The major component of the operating budget for Children, Youth & Families for FY 2001-2002 is part of the technical shift. There is an increase in funding as part of the JLBC recommendation for new Child Protective Service (CPS) workers, which is one time only funding in FY 2002. In FY 2003 those funds will come from the general fund. There is a recommended increase in Children Services over the two years eventually matching the Governor’s recommendation. Healthy Families and Family Builders are programs that were primarily funded with general fund monies, which are now being primarily funded through TANF. States are allowed to transfer up to 10% of their TANF block grant to the Social Services Block Grant (SSBG). In the past years, the Legislature has decided to transfer that full amount of 10% and to spend it primarily on funding children services. Some of the money was spent on SSBG backfill. The JLBC recommendation continues that policy of transferring 10%. The big difference between FY 2002 and 2003 is that the federal government restricts starting in federal FY 2002 how much can actually transfer to SSBG from 10% to 4.25%. The amount for FY 2002 for TANF Deposit into the Joint Substance Abuse Treatment Fund is lower because the program is not expected to start until March 1, 2001. Since $10 million of the 2001 appropriation are nonlapsing, this is not expected to reduce services at all.
The JOBS line item under Employment and Rehabilitation Services was projected based on expected caseloads and historical expenditure projections that indicated there would be a significant decrease of about $10 million in the amount of JOBS funding. The Department has expressed particular concerns related to that recommendation. Most of the other changes are related to the JLBC recommendation, which includes continued funding for all of the noncaseloads specific TANF programs and the Governor recommends eliminating a number of programs. Concerning Day Care Subsidy and Transitional Child Care, the JLBC recommendation uses more general fund monies to match federal child care block grant monies.
Senator Hartley asked where they will get the $5 million under Children, Youth & Families for after school programs. Senator Solomon responded that they will be moving monies around and she assured Senator Hartley that the money would be there. Senator Hartley asked if 25% of the TANF money available would then be going to one single program. Senator Solomon said that it could.
Senator Hartley stated that TANF monies should be allocated in a fashion that would encompass the whole committee. She stated that she wanted to stay within the $20 million budget. Senator Solomon explained that these bills will all go through Appropriations and end up in the final budget negotiations. Senator Hartley explained that she did not feel the after-school program was worth 25% of all monies available.
Mr. Shepherd further stated that TANF monies in DHS are primarily used for teen pregnancy prevention issues. Northern Arizona University monies are used for the character education program. The Governor and JLBC recommend funding for No Wrong Door. The JLBC recommendation uses more TANF funding than the Governor recommends. Provider Increase and Salary Increase have to do with the 5% and 10% provider and salary increases in the JLBC recommendation.
Senator Hartley asked if Maximus gets 35% of the $1 million of TANF funds for the fatherhood programs. Mr. Shepherd stated it is closer to 15%. Senator Hartley stated that Maximus does not have any staff in place and questioned who provides the oversight and why have they delayed service for so long to young fathers. She also stated her concerns for the life skills training program, wondering if it is true that the Wheels to Work program is costing about $16,000 per head. Mr. Shepherd stated that he did not know how that figure was calculated. Senator Solomon responded there is an Appropriations amendment that is rolling the Wheels to Work program into another program. Ms. Shepherd stated that the Department pays a lump sum payment at the beginning when they refer a client to the program. Clients participate for 12 months and after 12 months they receive title to the car. He stated that he did not know what would happen to the clients if the monies were moved.
Senator Hartley stated that at the end of FY 1997, the State underspent TANF funds by $13.1 million. In subsequent years, that figure was $54.1 million for 1998 and $57.5 million for 1999. Senator Hartley questioned what the reported underspending is for the 2000 TANF funds. Mr. Shepherd stated that he would have to get back with her, but there was not much under spending—maybe at the most $10 million.
Senator Hartley asked how has this affected the reserve TANF funds. Mr. Shepherd explained that the State underspent the appropriation and in the first year or two did not appropriate all of the TANF block grant. That built up the amount of unspent TANF block grant monies on reserve in Washington D.C. About a year ago, the federal government started reducing TANF block grant allocations to the states because they were not spending all of their TANF block grant monies. That is why the Legislature has over appropriated the spending because the monies have been in an account in Washington. The federal government said if the states do not spend the monies, then they will take them away.
In response to Senator Hartley, Mr. Shepherd stated that about $10 million of the decrease is purely a technical change. Caseloads have dropped and they had reduction in eligibility staff and they also significantly reduced the total appropriation for TANF cash benefits.
Senator Hartley asked if TANF funds have been used in lieu of general funds in other programs. Mr. Shepherd stated that there have been instances in which the allocations have been shifted. The JLBC recommendation to shift some general fund monies for the Healthy Families and the Family Builders Program from the general fund to the TANF block grant. They have also transferred TANF monies to the Social Services Block Grant and used most of those transferred SSBG monies to fund Children Services.
Senator Hartley stated that she had been told that TANF monies were used to help fund tax cuts. Mr. Shepherd answered that the Department of Economic Security (DES) general fund budget has gone up significantly since FY 1997. In past legislative sessions, the Legislature and the Governor have made the decision to shift some of these funds. They have gone to cover other needs in DES. JLBC is recommending an increase of $36 million to the general fund just for the long-term care portion of the Developmentally Disabled (DD) budget.
Patricia Jo Angelini, Director, Arizona Coalition on Adolescent Pregnancy and Parenting, stated that the monies that they anticipate are approximately $5 million in FY 2002 and another $5 million in FY 2003, which is reflected in the JLBC recommendation. However, it is not in the Governor’s recommendation. There is some controversy about how much revenue will be available.
Senator Hartley suggested that the JOBS program is an essential component of the Welfare reform and questioned why the reductions were recommended in that program. Mr. Shepherd answered that when they developed the JLBC recommendation, they looked at how many clients were expected to participate in the program, as well as historical costs per client. JOBS traditionally had spent about $1 million per month, which they felt would be sufficient. He further stated that they project about 8,000 families will be participating in the JOBS program.
Senator Hartley questioned how many contract providers will be impacted on the JOBS line item. Mr. Shepherd replied that he did not know exactly; however, the Department might be able to answer that. Senator Solomon indicated that there are ongoing negotiations with the agency to ensure that no contracts will be cancelled.
Senator Hartley asked if the JOBS program is reduced, how will that impact the Empower and Arizona Works programs. Mr. Shepherd answered that generally when there are increases or decreases to a particular support service line item, those increases or decreases are passed on to the Arizona Works contractor at a proportional rate.
Eddie Sissons, Executive Director, Morris Institute for Justice, stated that with the JOBS reduction, the Department would be concerned about the ability to earn future incentive monies.
Tape 1, Side B
Mr. Shepherd stated that the high performance bonus monies were earned based on performance when they were spending $10 million to $12 million a year in the JOBS line item. The JLBC recommendation on Empower versus Arizona Works was based on an estimate of the number of clients that were expected in each program.
Ms. Angelini stated that they had received complaints from providers working with young fathers. Maximus receives 35% of the monies, but they have not begun providing any services. They also have not subcontracted with the current providers. They are concerned about what is happening with this money that Maximus is receiving. She questioned why there are no referrals from South Phoenix for the Life Skills Program and Young Fathers Program.
Senator Petersen stated that these questions should be answered in Appropriations. He noted that DES has been irresponsible in handling the contracts with Maximus. DES has not paid them for six months for the incentive bonus.
Ms. Angelini stated that in the East Valley, young fathers are not being served. Senator Petersen asked if she had talked to Maximus. She replied no. He urged her to speak to them. He expressed his concern that this is not the committee to handle this issue. Senator Solomon stated she agreed with Senator Petersen. It would be more appropriate to put some of these issues on a future agenda so that people are prepared.
Bruce Liggett, Acting Deputy Director, Arizona Department of Economic Security, indicated that the Maximus percentage is not 35%, but 15% to 16%. In the East Valley Maximus receives 13% to 16% of any line item. It is $292,000 for the Young Fathers Program. DES is projecting to use about one-third of the $2.7 million budgeted for Young Fathers. The Department has paid through last December for 346 young fathers to participate in the program.
He pointed out that there was no intent to eliminate the Wheels to Work Program. The budgeted amount would support the current level of transportation and Wheels to Work Program. This program uses donated vehicles that need some repair.
He further stated that caseload numbers do change. The Director has instructed that they need to fully use the available resources to help people get the service they need so they can become self-sufficient.
Senator Solomon suggested that the agency and JLBC staff work directly with the members.
CONSIDERATION OF BILLS
SB 1392 – foster care; relatives; required – HELD
SB 1426 – CPS; pay steps – DO PASS
Barbara Guenther, Senate Family Services Committee Analyst, explained that SB 1426 establishes an annual salary increase program for three categories of Child Protective Services (CPS) employees—the Child Protective Services Specialists, who are the case managers, Unit Supervisors, and the Program Specialists. The program would incorporate increases of 2.5% per year for eight years. The first five years are strictly based on length of service. Years six through eight are based on a satisfactory performance evaluation, as well as length of service. She pointed out that a fiscal note has been requested from JLBC.
David Mendoza, Legislative Director, American Federation of State, County, and Municipal Employees (AFSCME), spoke in support of the bill. Because of poor compensation, the turnover rate has continued to increase within the ranks of CPS. A committee was formed called the Protective Services Caseload Standards Advisory Committee. The Department also hired a consultant to take a look at compensation, caseload assignments, turnover and retention. A survey resulted in a recommendation that the employees wanted pay steps. This recommendation went to the Governor. Also, 72% of the employees said that office management does not seriously consider employee input. He noted that there is money for pay steps this year.
Anna Arnold, Assistant Director, DES, stated that people enter into a pay grade at a mid-range level if they enter as a CPS Specialist III. There is a special entrance rate with a short distance to the top of the scale. Therefore, there are situations where an employee who has worked at DES for years is not making much more than the special entrance rate.
Senator Hartley asked how much it costs CPS to train and get its workers out into the field. Ms. Arnold said that she would have to get that information.
Senator Bowers noted that there was a special appropriation for 26 new caseworkers which never occurred and the money was absorbed throughout the system. Ms. Arnold answered that she was not aware of that situation.
Senator Hartley stated it was discovered that some of those positions went into the support staff. Ms. Arnold stated that is correct.
Senator Hartley asked how long the vacancies are open. Ms. Arnold replied that she did not bring the vacancy rates with her, but that she will get that information to the committee.
In response to Senator Hartley, Ms. Arnold explained that the Department is very concerned about the turnover of staff and the training. The actual pay issue is included in the Governor’s overall pay package in terms of pay for State employees. She also stressed that the workload needs to be reduced.
Senator Hellon moved SB 1426 be returned with a DO PASS recommendation.
The motion CARRIED by a roll call vote of 6-0-0 (Attachment 1).
SB 1436 – child support; employer cooperation – DO PASS
Ms. Guenther explained that SB 1436 requires employers, payers, and self-employed persons to provide specified information upon request of either party to a support or maintenance proceeding, rather than upon court order for child support. Current practice is that if there is a court order, either a temporary or a final decree, then the court could order an employer to release specific information. The DES division of child support enforcement also can obtain information through an administrative procedure. This bill will allow the other party of the case to also obtain information on identifying new information, assets, income, and benefits at the time that the proceeding is initiated rather than waiting until there is a court order. This bill was a product of the Child Support Coordinating Council.
Senator Hellon moved SB 1436 be returned with a DO PASS recommendation.
The motion CARRIED by a roll call vote of 6-0-0 (Attachment 2).
Senator Hartley announced that the following were present in support of the bill: Mark Armstrong, Judge, Administrative Office of the Courts and Judy Bushong, Maricopa County Clerk of Superior Court.
SB 1440 – limitation of authority – DISCUSSION/HELD
Keyina Sears, Senate Family Services Committee Intern, explained that SB 1440 clarifies that a parent’s refusal to administer psychiatric medication to a child is not abuse or neglect by itself, nor is it sufficient reason to take the child into temporary custody.
Dr. Ann Blake Tracy, Executive Director, International Coalition for Drug Awareness, distributed a handout entitled “The Next Generation Medical Guinea Pigs—Our Prozac, Zoloft and Paxil Babies” (Attachment C). She further stated that she has testified as an expert witness in criminal cases involving antidepressants for nine years. She has been tracking cases of murder/suicide, parents killing their children, workplace violence, road rage deaths, etc. Due to the use of the antidepressant Luvox by Eric Harris in the Columbine shooting, she was called to testify at the Colorado State School Board on the dangers of these drugs. They subsequently passed a resolution warning parents and teachers about the use of these particular drugs. The street drug, Ecstasy, was only removed from the market as a medication 15 years ago. Lysergic Acid Diethylamide (LSD) was distributed by the makers of Prozac. It was labeled as a “miracle drug.” PCP was distributed by Parke-Davis Pharmaceutical Company. The public was told that it had a large margin of safety in humans. Seven years later it was pulled from the market. She pointed out that there has never been a group of drugs so similar to Angel Dust as Prozac, Zoloft, Paxil, and Luvox. 150,000 people a year are going psychotic and being hospitalized from these four medications. These drugs are now being tested on children under the State’s care. Some states are already being sued for deaths. She further stated that children are being taken from homes and put on these drugs. 20/20 announced last August that one-eighth of the population is on these new anti-depressants. She encouraged the Committee to pass this bill.
In response to Senator Hartley, Dr. Tracy stated her Ph.D. is in health sciences with the emphasis on psychology.
Gloria Gregg, Citizen, stated that her son is one of the victims and suggested that the pharmaceutical companies are destroying lives. She noted that her son’s life was ruined by taking psychotropic drugs. She distributed a handout entitled “Justin’s Story” (Attachment D). She is in support of this bill.
Tape 2, Side A
Senator Hartley announced that the following were present in support of the bill: Les Koel, CCHR; Howard Ryan, Precinct Committeeman; and Richard Haworth, Citizen.
Representative Eddie Farnsworth, spoke in support of the bill. He pointed out that his daughter has had seizures for the past four years. He stated that they had to decide whether or not to put her on medication, which had many serious side effects. It also can cause serious liver damage. They chose to leave her off medication. The doctor made it clear that if they did not put her on medication, he would turn them over to Child Protective Services (CPS). This is about parental rights.
Senator Bowers asked the name of the medication. Representative Farnsworth said the brand name is Deficot, the generic name is Divalproex Sodium.
In response to Senator Petersen, Barbara Guenther explained that CPS has a series of questions that they ask to determine whether a call is one that they need to investigate and they also have standard procedures and guidelines to determine whether a report is substantiated or whether the child needs to be removed from the home. They would need to find that there is substantial risk for the child and in order to remove there needs to be risk to the child. A parent refusing to place a child on medication is not currently grounds for removing a child from the home.
Senator Hartley stated that Representative Farnsworth’s testimony is not relative to this bill because he is talking about antiseizure medication. She stated that she is against this bill and will hold it until such time as they have the votes from the Committee.
SB 1487 – child support; procedures – HELD
There being no further business, the meeting was adjourned at 11:07 a.m.
Respectfully submitted,
Carol Dager
Committee Secretary
(Tapes and attachments on file in the Secretary of the Senate’s Office/Resource Center, Room 115.)
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Committee on Family Services
10 February 7, 2001
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