Fiscal Note - SB 0166 - Creates the Community Partnership Program For Delivering Benefits From the Division of Family Services
L.R. NO. 0638-01
BILL NO. SB 166
SUBJECT: Community Partnership Program
TYPE: Original
DATE: January 27, 1997
FISCAL SUMMARY
ESTIMATED NET EFFECT ON STATE FUNDS
FUND AFFECTED FY 1998 FY 1999 FY 2000
General Revenue* ($49,517) (Unknown) (Unknown)
Community
Partnership
Program Fund (Unknown) (Unknown) (Unknown)
Partial Estimated
Net Effect on All
State Funds ($49,517) (Unknown) (Unknown)
*Costs expected to exceed $100,000 annually.
ESTIMATED NET EFFECT ON FEDERAL FUNDS
FUND AFFECTED FY 1998 FY 1999 FY 2000
Federal (Unknown) (Unknown) (Unknown)
Partial Estimated
Net Effect on All
Federal Funds (Unknown) (Unknown) (Unknown)
ESTIMATED NET EFFECT ON LOCAL FUNDS
FUND AFFECTED FY 1998 FY 1999 FY 2000
Local Government $0 $0 $0
FISCAL ANALYSIS
ASSUMPTION
The Office of the Governor, Office of the Lieutenant Governor, Truman State
University, Harris-Stowe College, the University of Missouri, and MO Western
State College do not expect to be fiscally impacted.
The Office of Administration, Division of Budget and Planning indicate this
legislation has no fiscal impact on their agency. However, they also note
the proposed tax credit would potentially affect total state revenue.
The Secretary of State (SOS) estimates costs for additional publishing duties
related to the Division of Family Services (DFS) being able to promulgate
rules, forms and other controls as necessary. DFS currently has 30
regulations on the topic of income maintenance payments, comprising 26 pages
in the Code of State Regulations. SOS assumes DFS will require at least an
equivalent number of regulations for the administration of the new program.
SOS also assumes each regulation will require four pages in the Missouri
Register. Therefore, SOS estimates the DFS regulations will require the
printing of 26 additional pages in the Code of State Regulations and 120
additional pages in the Missouri Register. The estimate by SOS anticipates
rulemaking activity is historically similar in length and number to DFS's
prior rulemaking. The actual fiscal impact would be dependent upon the
actual rulemaking authority, and may be substantially more or less. For
purposes of this fiscal note, the SOS estimates costs at $3,598 in FY97.
Financial impact in subsequent fiscal years would depend entirely on the
number, length, and frequency of the department's rulemaking actions. The
SOS does not anticipate the need for additional staff as a result of this
proposal; however, the enactment of more than one similar proposal resulting
in a minimal fiscal impact to the SOS could require an increase in the SOS's
appropriation for such purposes.
Oversight assumes SOS could increase fees to cover additional costs, per
Section 536.033 RSMo, and therefore, has not included these costs in the
fiscal impact for the proposal.
The Coordinating Board for Higher Education (CBH) assumes that any public
higher education institution, especially community colleges, could be
fiscally impacted if they choose to distribute public assistance as a way to
attract clients. However, since participation is not mandated, the fiscal
impact would be unknown. Oversight has shown the fiscal impact as unknown
for FY98 and FY99. FY97 would be zero assuming an implementation date of
January 1, 1998.
The Department of Revenue (DOR) indicates an unknown fiscal impact. DOR
expects to incur costs related to system modifications, form/schedule
revisions, verification, processing functions and taxpayer inquires as well
as a small administrative impact to administer the tax credit. However,
given various questions related to the credit such as how the credit would be
determined or what taxes it would be applicable to, DOR cannot make a
determination of the fiscal impact. Oversight assumes that the first year
tax credits could potentially be claimed would be FY99. FY98 has been shown
as zero.
The Department of Elementary & Secondary Education (DES) does not expect to
be fiscally impacted. Furthermore, DES assumes that schools could choose to
participate in the program, and the costs incurred would be strictly
voluntary and cannot be estimated. Oversight assumes costs would be incurred
in FY98 assuming an implementation date of January 1, 1998.
The Department of Social Services (DOS), Division of Family Services (DFS)
assumes that it would be fiscally impacted by this proposal and it would be
necessary to hire a Program Development Specialist (PDS) to help develop a
format for implementation. The PDS would monitor the implementation
progress, help coordinate interactions between service centers and clients,
respond to media attention, monitor hotline results, and interrelate with
interested agencies as appropriate. The PDS would also be responsible for
contract issues. Costs associated with this FTE would be $42,322, $42,569,
and $43,651 for FY98, FY99, and FY00, respectively. DFS does not know how
these costs will be funded. They indicated it will probably be a split of
general revenue and federal funding. However, because administrative costs
are capped at 15%, anything exceeding the 15% limit will be funded solely
through general revenue. For fiscal note purposes, Oversight assumes the
FTE will be funded 100% from general revenue.
DFS indicates it cannot estimate costs associated with the Community
Partnership Program because the number of agencies and clients who would be
interested in such a program cannot be ascertained. The proposal would
provide that monies be appropriated to the Community Partnership Program Fund
to provide benefits to qualified individuals that are at least equal to the
benefits the individual would otherwise receive plus an amount at least equal
to 10% of the total amount transferred or savings resulting from the
implementation of the program. The proposal also instructs that any surplus
of funds should be invested by the state treasurer and money earned be
credited to the program fund.
Administrative costs of managing public assistance disbursements within DFS,
along with costs associated to field operations and the performance of field
staff, could equate to savings as they would not be incurred by allowing
another entity to handle benefit responsibilities as proposed.
Based on FY96 expenditures and appropriations, DFS estimates these
administrative costs at approximately 4% of the benefits issued. However,
DFS notes the 4% maintenance/operating costs for handling benefits compared
to the 10% contribution to another organization to conduct a similar service
does not appear to be a savings for DFS; and the overall impact is unknown.
For purposes of this fiscal note, Oversight has shown unknown income to the
Community Partnership Program Fund from appropriations, the additional 10%
and the fee which could be accessed against the participants. In addition,
the provision of services has been shown as an unknown cost. It was assumed
that the fund would not net to zero, but costs would more than likely exceed
the income level.
The Division of Budget & Finance (DBF) assumes that the proposal would create
additional audit responsibilities because the DBF would be responsible for
performance and financial audits of the department's agreements with the
community partnership organizations. DBF assumes that it would need one
Auditor I to complete annual reviews on each of 30 contracts. It would take
approximately 70 hours per audit, including travel, report preparation and
review time. Oversight assumes that since DFS was unable to estimate the
number of potential contracts that the cost to DBF would be unknown as well.
Depending on the number of contracts which would result from this proposal,
DBF would require 1 FTE for every 30 contracts at an annual cost of
approximately $36,000. Costs would be 100% GR.
The Division of Legal Services (DLS) assumed this proposal would require 1.5
FTE, including one attorney and .5 clerical staff. DLS states that under
this proposal, community partnerships would be authorized to be established
as conduits for dispensing and administering public assistance benefits to
qualified recipients. Contracts would be entered into between the Community
Partnership Organizations (CPOs) and DFS. CPOs would then contract with
qualified individuals who elect to participate in the program. The contracts
between CPOs and participants would be required to provide a grievance
procedure to address disputes which might arise. The additional attorney
would be involved in assisting DFS in drafting, reviewing, and monitoring the
contracts with the CPOs as well as assisting in revolving disputes under the
grievance procedures. The part-time clerical would provide administrative
support to the attorney in typing contracts, letters, and legal opinions.
The costs associated with these FTE would be $46,902, $52,536, and $53,903
in FY98, FY99, and FY00, respectively, and these costs would be split between
general revenue and federal funds. DLS also assumes there are many unknown
factors that could have long-range implications and the impact of these are
currently unknown.
Oversight assumes DLS would need one attorney at a cost of $46,413, $51,932,
and $53,286 in FY98, FY99, and FY00, respectively. These costs would be
split 60% GR to 40%. federal.
FISCAL IMPACT - State Government FY 1998 FY 1999 FY 2000
(6 Mo.)
GENERAL REVENUE
Costs-Department of Revenue (DOR)
Tax Credits $0 (Unknown) (Unknown)
Costs-Department of Social Services
Division of Family Services (DFS)
Personal Service (1 FTE) ($14,735) ($30,220) ($30,976)
Fringe Benefits ($4,204) ($8,622) ($8,837)
Expense and Equipment ($10,756) ($3,727) ($3,838)
Total Costs-DFS ($29,695) ($42,569) ($43,651)
Division of Legal Services (DLS)
Personal Service (.6 FTE) ($9,365) ($19,206) ($19,687)
Fringe Benefits ($2,672) ($5,479) ($5,617)
Expense and Equipment ($7,785) ($6,474) ($6,669)
Total Costs-DLS ($19,822) ($31,159) ($31,973)
Division of Budget & Finance (DBF)
Personnel/Expense & Equipment $0 (Unknown) (Unknown)
PARTIAL ESTIMATED NET EFFECT
ON GENERAL REVENUE FUND ($49,517) (Unknown) (Unknown)
COMMUNITY PARTNERSHIP PROGRAM FUND
Income
Monies Appropriated to the
Fund Plus 10% of Transfer
or Savings $0 Unknown Unknown
Income
Fee Charged Participants $0 Unknown Unknown
Costs
Provision of Services $0 (Unknown) (Unknown)
ESTIMATED NET EFFECT ON
COMMUNITY PARTNERSHIP
PROGRAM FUND (Unknown) (Unknown) (Unknown)
FEDERAL
Costs-Department of Social Services
Division of Family Services (DLS)
Personal Service (.4 FTE) ($6,244) ($12,804) ($13,124)
Fringe Benefits ($1,781) ($3,653) ($3,744)
Expense and Equipment ($5,191) ($4,316) ($4,445)
Total Costs-DLS ($13,216) ($20,773) ($21,313)
ESTIMATED NET EFFECT ON
FEDERAL FUNDS ($13,216) ($20,773) ($21,313)
FISCAL IMPACT - Local Government FY 1998 FY 1999 FY 2000
(10 Mo.)
$0 $0 $0
FISCAL IMPACT - Long Range
The Department of Social Services (DOS), Division of Legal Services (DLS)
indicates an unknown fiscal impact given the number of unknown factors
involved with the Community Partnership Program.
FISCAL IMPACT - Small Business
This proposal may affect small businesses as these businesses may be involved
in providing some of the services specified.
DESCRIPTION
This legislation would enact the "Community Partnership Program" in order to
promote diverse approaches to the problems of poverty and to encourage
maximum local participation and volunteerism. Qualified individuals who
elect to participate in the program would be required to enter into a
contractual agreement with the community partnership organization, who would
be contracted with DFS to distribute public assistance and provide services,
such as education, transportation, and child care, to the qualified
individuals.
The responsibilities of DFS would be as outlined, including the development
of standardized contractual forms and the establishment of a hotline for
qualified individuals to register complaints.
In establishing and maintaining a community partnership program, community
organizations may charge a fee for the provision of services equal to the
amount of the organization's administrative costs; however, this fee may not
exceed 10% of the benefits. Supplemental benefits may also be provided. The
organizations may require qualified individuals to meet additional standards
as a condition of receipt of benefits.
Failure by the qualified individual to meet the contract requirements would
result in the forfeiture of any increase in benefits and any other
supplemental support. If a contract is terminated, the qualified individual
would be deemed a non-participant for 30 days or until another contract is
entered into, whichever period of time is less. If deemed to be a
non-participant due to the termination of the contract, the individual would
still receive benefits as otherwise provided by law.
DFS would require the community organizations to meet the conditions outlined
in the proposal. Community organizations may actively seek private
donations. Any Missouri citizen may claim a tax credit if provided for by an
appropriation; however, the amount may not be less than the savings realized
by DFS as a result of this program.
This legislation would establish the Community Partnership Program Fund.
Monies would be appropriated to the fund to provide benefits that are at
least equal to the benefits otherwise received plus at least 10% of the total
amount transferred or the amount of savings resulting from the implementation
of the program. The fund may also receive gifts, grants, contributions,
appropriations, and funds or public assistance from any other source.
Unexpended balances would be invested with the interest, dividends, and
monies earned deposited back into the fund.
This legislation would establish the Community Partnership Advisory Council
to make recommendations to DFS on ways to improve and expand the program.
The Council would meet at least twice yearly to review activities and make
recommendations to the Governor and general assembly.
This proposal would become effective on January 1, 1998.
This legislation is not federally mandated, would not duplicate any other
program and may require additional capital improvements or rental space.
SOURCES OF INFORMATION
Department of Social Services
Secretary of State
Coordinating Board for Higher Education
Department of Elementary & Secondary Education
Department of Revenue
Office of Administration
Division of Budget & Planning
Office of the Governor
Office of the Lieutenant Governor
University of Missouri
MO Western State University
Truman State University
Harris-Stowe College
NOT RESPONDING: Southwest Missouri State University, Central Missouri State
University, Northwest Missouri State University, State Fair Community
College, Missouri Southern, Southeast Missouri State University, Lincoln
University
This Fiscal Note is not an official copy and should not be quoted or cited.