FISCAL NOTE
Date Requested: February 23, 2024
Time Requested: 03:50 PM |
| Agency: |
Human Services, WV Department of |
|---|
| CBD Number: |
Version: |
Bill Number: |
Resolution Number: |
| 2927 |
Comm. Sub2 |
SB562 |
|
|---|
| CBD Subject: |
Health |
|---|
|
FUND(S):
0403 - Division of Human Services General Administration Fund, 8722 - Cons Federal Funds Div Human Resources Gen Admin Fd
Sources of Revenue:
Other Fund General and Federal
Legislation creates:
Increases Existing Expenses
Fiscal Note Summary
Effect this measure will have on costs and revenues of state government.
The purpose of this bill is to expand the employment and training requirements for individuals to receive SNAP benefits.
The Department estimates the fiscal impact related to this legislation to be $5,063,281 ($2,531,641 state) the first year and $3,073,281 ($1,536,641 state) upon full implementation.
Fiscal Note Detail
| Effect of Proposal |
Fiscal Year |
2024
Increase/Decrease
(use"-") |
2025
Increase/Decrease
(use"-") |
Fiscal Year
(Upon Full
Implementation) |
| 1. Estmated Total Cost |
0 |
5,063,281 |
3,073,281 |
| Personal Services |
0 |
2,958,281 |
2,958,281 |
| Current Expenses |
0 |
2,105,000 |
115,000 |
| Repairs and Alterations |
0 |
0 |
0 |
| Assets |
0 |
0 |
0 |
| Other |
0 |
0 |
0 |
| 2. Estimated Total Revenues |
0 |
0 |
0 |
Explanation of above estimates (including long-range effect):
An initial vendor estimate of systems costs for RAPIDS/PATH upgrades necessary to operate a mandatory E&T program totals $1.54M one time cost. A vendor estimate of year-one costs for federally-required client mass mailing totals $115k which includes development of new notices, etc. These costs would be 50% federal, 50% state. Future year mailing costs are unknown due to inability to accurately identify the impacted population.
The state received $622k in federal funding for the administration of the SNAP E&T program for FFY24. Annual funding is allocated by formula based on the state's prior-year population of federally-defined SNAP Work Registrants and federally-defined Able Bodied Adults Without Dependents (ABAWDs). As the state's ABAWD population has declined by nearly 47k since the post-pandemic return of ABAWD work requirements in June of 2023 (and continues to decline month by month), it is expected that future funding allocations for this program will be drastically reduced from the current figure.
Release of the federal funding is contingent upon USDA approval of a SNAP E&T State Plan. Technical defects in the bill that conflict with federal law make approval of a State Plan based on the requirements of this bill unlikely, as has happened in other states. See memorandum section for more information.
7 CFR 273.7(d)(4) mandates that states must reimburse participant expenses that are "reasonable and necessary" for a client's participation in a SNAP E&T program. These reimbursements are funded using 50% federal, 50% state dollars. 7 CFR 273.7(d)(4)(v) stipulates that clients whose monthly expenses for participation exceed the state cap must be exempted from participation; however, lack of state funding for reimbursement is not considered a legitimate reason for exempting a person from participation and would expose the State to a case error. The conflicts with federal law created by this bill also make it difficult to determine the size of the impacted population, so this cost remains unquantified.
A conservative estimate of staffing needs to handle the new eligibility functions created by this bill calls for a minimum of one new Family Support Supervisor to oversee the program in each county office (two new Family Support Supervisors in some counties). The Department is estimating that it would take 60 Family Support Supervisor positions. The average salary for the Supervisor is $44,201 (avg. salary) + $15,470 (35% benefits) = $59,671. Therefore, the total personal services cost is estimated to be $3,580,281 (less redirect $622,000) = $2,958,281. The estimated start-up costs of $450,000 for 60 employees ($7,500.00 x 60) would be a one-time cost. Start-up costs includes costs for computers, furniture and office supplies. In future years, these costs will be reduced.
The staffing costs are predicated on bringing case management staff in house to allow for revamping of the Work Programs functionality as part of the PATH costs and the change to mandatory program which impacts client access to benefits as well as mitigation of increase in SNAP error rates. These costs would be partially offset by shifting the administrative allocation for this program that is currently passed through to the Regional Workforce Development Boards (WDBs) for case management of participants in the State's current voluntary E&T program ($622,000).
Memorandum
The section of the bill that would create W.Va. Code §9-8-2a presents apparent conflicts with federal law by applying an expanded age range of 18-59 to the ABAWD population, which is federally-defined as 18-52 (increasing federally to 54 in October 2024). The bill also mirrors and refers to 7 CFR 273.7(b), which lays out exemptions from the federal Work Registration requirement, which are wholly different from the federal ABAWD work/education/training requirement exemptions found in 7 CFR § 273.24(c). Not only does this impede determination of the impacted population and make federal approval of a State Plan unlikely, but it also means that implementation of a program based on this bill would expose the State to a monumental increase in SNAP error rates, which carries the risk of millions of dollars in federal repayment.
"The State's administrative allocation for this program is currently passed through almost entirely to the Regional Workforce Development Boards (WDBs) for case management of participants in the State's current voluntary E&T program. This funding would likely have to be repurposed toward Department costs, placing at risk an important source of funding to WV's Workforce Development system and 10 jobs at the WDBs that are currently wholly funded by this grant.
The necessity of program restructuring to accomodate a mandatory vs a voluntary program would also likely mean limiting the program to a single Approved E&T Component, consisting of Supervised Job Search. This calls into question the future of the State's ability to reimburse third-party partners for paid employment and training leading to skilled credentials, leading to the potential loss of approximately 115 participant jobs currently served across the existing partners at Goodwill, Coalfield Development, WV Women Work, and Blenko Glass."
Other states implementing mandatory E&T programs have seen drastic increases in their SNAP error rates. Error rates above the national average for 2 consecutive years place a state at risk of federal financial sanctions requiring potential repayment of federal funding. While WV's error rates are currently compliant, the administrative complexity of implementing new eligibility criteria under a mandatory program does expose the state to the risk of repayment.
There is no valid alternate source of funding for administration of the mandatory E&T program created by this bill. While a limited amount of TANF funding may in some cases be used to support participant reimbursement costs for certain eligible individuals for up to 4 months, it would not be applicable under any circumstances to the ABAWD population contemplated by this bill, as TANF funds can only be expended on families with dependent children.
The bill does reference ABAWD Pledge Funding, which the State does not currently receive. This funding, if received, would be a small portion of a $20M national pool that is allocated by formula to states that pledge to place ABAWDs at risk of losing their benefits into an activity that satisfies ABAWD work requirements. Supervised Job Search, likely the only E&T Component the State could feasibly include in a mandatory program, is not an allowable activity for this purpose. The release of this funding is also contingent upon a federally approved State Plan for its use, and any state that fails to fulfill the pledge to place all at-risk ABAWDs in a qualifying activity may be disbarred from future receipt of this funding.
The bill stipulates that the Department will implement a mandatory program with no specified implementation date, meaning the State must submit a State Plan for implementation of a mandatory program that coincides with the state of the federal fiscal year in October 2024; however, the initial vendor estimate of required systems programming changes calls for 18-24 months to implement the necessary changes.
Person submitting Fiscal Note: Cynthia A. Persily, Ph.D.
Email Address: dhhrbudgetoffice@wv.gov