SB 0598 - Fiscal Note

Fiscal Note - SB 0598 - Allows suspension of public assistance if a child does not attend school

COMMITTEE ON LEGISLATIVE RESEARCH

OVERSIGHT DIVISION

FISCAL NOTE

L.R. NO. 2630-01

BILL NO. SB 598

SUBJECT: Suspension of Assistance For Failure of Children to Attend School

TYPE: Original

DATE: January 18, 1998

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FISCAL SUMMARY

ESTIMATED NET EFFECT ON STATE FUNDS
FUND AFFECTED	FY 1999	FY 2000	FY 2001
General Revenue*	(Unknown)	(Unknown)	(Unknown)
Estimated Partial Net Effect on All State Funds	(Unknown)	(Unknown)	(Unknown)

* Unknown costs due to unknown effect on the Foundation Formula from possible increased school attendance.

ESTIMATED NET EFFECT ON FEDERAL FUNDS
FUND AFFECTED	FY 1999	FY 2000	FY 2001
Federal	$206,157	$276,381	$272,577
Total Estimated Net Effect on All Federal Funds	$206,157	$276,381	$272,577

ESTIMATED NET EFFECT ON LOCAL FUNDS
FUND AFFECTED	FY 1999	FY 2000	FY 2001
Local Government	$0	$0	$0

Numbers within parentheses: ( ) indicate costs or losses

This fiscal note contains 6 pages.

FISCAL ANALYSIS

ASSUMPTION

Officials from the Attorney General's Office, Secretary of State's Office, Department of Social Services (DOS), Division of Family Services (DFS), Childrens Services Section and Office of Administration, Administrative Hearing Commission, do not expect to be fiscally impacted by the proposal.

Officials from the Springfield Public Schools (SPS) indicated there could be long-term benefits as a result of the proposal. These benefits included improved academic performance, decreased dropout rate and increased Local Education Agency (LEA) revenue through Average Daily Attendance (ADA) increases. The SPS did not indicate a specific amount of savings or revenue resulting from implementation of the proposal. The SPS indicated no apparent immediate cost related to the proposal. Oversight assumes the SPS will not incur significant costs or revenue related to the proposal as it cannot be determined how many absent students are from families receiving Temporary Assistance to Needy Families (TANF). However, Oversight for the purposes of this fiscal note, will show an unknown amount of revenue for the local funds (school districts).

Officials from the Department of Elementary and Secondary Education (DESE) assumed the proposal would not fiscally impact the DESE. The DESE indicated local school districts may see an increase in attendance which could increase the district's revenue through the Foundation Formula. Oversight cannot determine the amount of revenue a school district may realize as a result of increased student attendance as it cannot be determined how many absent students will return to the classroom and how this will impact the local school districts. As a result, Oversight will show an unknown amount of revenue and costs for the local funds (school districts) and an unknown amount of costs for the general revenue fund to fully fund the Foundation Formula.

Officials from the DOS, Division of Family Services (DFS), Income Maintenance Section indicate the proposal would impact their section. The DFS indicated there are 56,509 school age children residing in TANF households in the state. In addition, each school district has its own policy for determining truancy and not all school districts report the truancies to the DESE. The DFS anticipates more hearings in the Administrative Hearing Unit, a need for more staff due to increased demand on staff's time and increased costs for certified mailings if this proposal were enacted. The DFS stated the fiscal impact can not be projected due to inadequate parameters for enacting the proposal as periodic checks is not defined, unacceptable attendance is not defined and the types of any consequences that could be imposed is not defined. However, they did provide the following assumptions and costs based on their projections and estimates:

1) unacceptable attendance is 3 days a week or 5 days a month,

2) the DFS performs 3 matches (between TANF rolls and school attendance) a school year,

3) each school district reports attendance to the DESE,

4) sanctions imposed against households are performed as stated in the proposal ( a typical

sanction is $58 per 3 person household),

5) 8,429 children will be considered truant during a typical year. Ten % of 56,209 TANF children on the first match (5,620 children), one-third of those children (1,872) are included on the second match and one-half of those children (936 children) are truant on the third match report,

6) twenty percent of the households subject to penalty will want a hearing which equates to 1,685 additional hearings (1,124 for the first, 374 for the second, and 187 for the third match).

The DFS did not indicate a potential savings due to the sanctions of benefits from households with children who do not attend school. Oversight has calculated a potential savings based on the sanction and other information the DFS provided. Based on the information provided, the DFS could save approximately $705,976 per year on benefits that will not be provided due to sanctions. The savings for FY 99 were prorated over 10 months and the savings for FY 00 and FY 01 were not adjusted. The savings were split 40% general revenue fund and 60 % federal fund to reflect past funding sources.

The DFS estimates that based on the assumptions above, they will require .5 FTE for a program development specialist to receive truancy matches from DESE, ensuring matches are distributed to the appropriate county offices, collect case-action reports and answer questions from the caseworkers, coordinate with the Administrative Hearings Unit, and develop information collecting/reporting systems and write policy for the enacted proposal. Oversight assumes existing resources could used to perform this work.

The DFS estimates that based on the assumptions above, they will require 6 FTE for caseworkers to respond to the increased workload if this proposal is enacted. The DFS assumes one and a quarter hours per case will be needed for the 8,429 mailings anticipated for the school year. This equates to 10,536 caseworker hours (8,429 X 1.25) . The DFS also assumes the proposal will increase the number of hearings. The DFS assumes the average hearing will take one and one-half hours of caseworker time. This will require 2,528 caseworker hours for the additional hearings. Assuming that each caseworker can work 2,112 hours per year, the DFS will require 6 FTE for caseworkers (10, 536 hours for mailing plus 2,528 hours for hearings equals 13,064 hours divided by 2,112 hours per caseworker per year equals 6 FTE). The caseworker costs would be $284,526, $205,970 and $211,239 for FY 99, FY 00, and FY 01, respectively. Costs for FY 99 were prorated over 10 months. Costs were split 40 % state and 60% federal based on prior year funding sources.

The DFS indicated certified mailings cost $1.67 each and with 8,429 required mailings, costs would total $14,076 each year. The cost for FY 99 was prorated for 10 months and costs for FY 00 and FY 01 were increased from the base year costs. Costs were split 40 % state and 60% federal based on prior year funding sources.

The DFS did not include additional costs for the Administrative Hearings Unit, which is a unit of the DOS, Division of Legal Services (DLS). Oversight, for the purposes of this fiscal note, will assume the DLS can enact this proposal with existing resources.

FISCAL IMPACT - State Government	FY 1999	FY 2000	FY 2001
	(10 Mo.)
GENERAL REVENUE
Savings-Department of Social Services,
Division of Family Services
Sanctioned Benefits	$235,325	$282,390	$282,390
Costs-Department of Elementary &
Secondary Education (DES)
Fully-Funded Foundation Formula	(Unknown)	(Unknown)	(Unknown)
Costs-Department of Social Services
Division of Family Services
Personal Service (2 FTE)	($37,760)	($46,445)	($47,606)
Fringe Benefits	($10,584)	($13,019)	($13,344)
Expense and Equipment	($18,822)	($7,999)	($8,239)
Total Costs-DFS	($144,733)	($67,463)	($69,189)
Costs-Department of Social Services
Division of Family Services
Mailings	($4,692)	($5,800)	($5,974)
ESTIMATED PARTIAL NET EFFECT
GENERAL REVENUE FUND	(Unknown)	(Unknown)	(Unknown)
FISCAL IMPACT - State Government	FY 1999	FY 2000	FY 2001
(continued)	(10 Mo.)
FEDERAL FUNDS
Savings-Department of Social Services,
Division of Family Services
Sanctioned Benefits	$352,988	$423,586	$423,586
Costs-Department of Social Services
Division of Family Services
Personal Service (4 FTE)	($77,764)	($95,688)	($98,080)
Fringe Benefits	($21,797)	($26,821)	($27,492)
Expense and Equipment	($40,232)	($15,998)	($16,478)
Total Costs-DFS	($139,793)	($138,507)	($142,050)
Costs-Department of Social Services
Division of Family Services
Mailings	($7,038)	($8,698)	($8,959)
ESTIMATED NET EFFECT ON
FEDERAL FUNDS	$206,157	$276,381	$272,577
FISCAL IMPACT - Local Government	FY 1999	FY 2000	FY 2001
	(10 Mo.)
LOCAL SCHOOL DISTRICT FUNDS
Income-School Districts
Fully-Funded Foundation Formula	Unknown	Unknown	Unknown
Costs-School Districts
Instructional & Support Services	(Unknown)	(Unknown)	(Unknown)
ESTIMATED NET EFFECT ON
LOCAL SCHOOL DISTRICT FUNDS	$0	$0	$0

FISCAL IMPACT - Small Business

No direct fiscal impact to small businesses would be expected as a result of this proposal.

DESCRIPTION

This proposal would require the Director of the Division of Family Services to periodically check the attendance records of any child of school age whose family receives Temporary Assistance to Needy Families (TANF). If the child does not attend school, the Director shall formally notify the parents. TANF aid shall be suspended, for progressively longer periods as specified in the proposal, if the child is not attending school upon subsequent attendance checks. The Director may establish, by the rulemaking procedures of Chapter 536, RSMo, an appeals process for review of any such suspension of TANF benefits.

This legislation is not federally mandated, would not duplicate any other program and would not require additional capital improvements or rental space.

SOURCES OF INFORMATION

Department of Social Services

Department of Elementary and Secondary Education

Office of Administration

Division of Budget and Planning

Attorney General's Office

Secretary of State's Office

Springfield Public Schools

NOT RESPONDING: Kansas City Public Schools and St. Louis Public Schools

Jeanne Jarrett, CPA

Director

January 18, 1998