SB 0324 - Fiscal Note

Fiscal Note - SB 0324 - Creates the Shared Care Program for elderly dependents

COMMITTEE ON LEGISLATIVE RESEARCH

OVERSIGHT DIVISION

FISCAL NOTE

L.R. NO.: 1463-01

BILL NO.: SB 324

SUBJECT: Establishes the Shared Care Program in the Division of Aging

TYPE: Original

DATE: January 29, 1999

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FISCAL SUMMARY

ESTIMATED NET EFFECT ON STATE FUNDS
FUND AFFECTED	FY 2000	FY 2001	FY 2002
General Revenue	($179,743)	($198,718) to ($21,265,218)	($204,490) to ($21,270,990)
Total Estimated Net Effect on All State Funds	($179,743)	($198,718) to ($21,265,218)	($204,490) to ($21,270,990)

ESTIMATED NET EFFECT ON FEDERAL FUNDS
FUND AFFECTED	FY 2000	FY 2001	FY 2002
None
Total Estimated Net Effect on All Federal Funds	$0	$0	$0

ESTIMATED NET EFFECT ON LOCAL FUNDS
FUND AFFECTED	FY 2000	FY 2001	FY 2002
Local Government	$0	$0	$0

Numbers within parentheses: ( ) indicate costs or losses

This fiscal note contains 6 pages.

FISCAL ANALYSIS

ASSUMPTION

Officials from the Department of Social Services - Division of Aging (DA) provided the following methodology:

1) There is an assumption that the computation of the cost to General Revenue for tax reimbursement will be computed by the Office of Administration - Division of Budget and Planning. (See below)

2) The cost of "recognition by the Governor" will be calculated and reported by the Governor's Office. (Oversight assumes this cost will be absorbed with existing resources.)

3) The responsibility and cost of issuing the tax reimbursement checks will be calculated and reported by the Department of Revenue. (See below)

The primary sources for information used in the fiscal impact were from the US Bureau of the Census, Missouri Office of Administration as prepared by the State Demographer in 1996, and National Health Interview Survey, 1991-92.

Registry Size

The registry size as well as the number of potential shared care members are based on operational definitions and estimates available to the DA.

1998 Census Estimates: 960,300 persons are aged 60 or over (as of 1998)

( 51,000) persons residing in institutions (as of 1998)

909,300 persons aged 60 and over and living in the community

( 34,800) person aged 60 or over authorized by DA for Medicaid or SSBG home care (as of 1998)

874,500 persons potentially eligible for Shared Care Program

Shared Care Members

Calculations are based on the assumption that elderly persona and care givers will request information regarding services on behalf of seniors experiencing difficulty with three or more activities of daily living (ADL) as a guide to who may not live alone. Of the 874,500 elderly persons living in the community, approximately 6.6 percent 9age 65 or over) have difficulty with three or more ADLs. Therefore, the DA estimates that 57,717 persons will request information on shared care.

ASSUMPTION (continued)

Based on an estimate that 100 percent of elderly persons and care givers will request information about shared care, the registry may include a potential of 57,717 shared care members of which approximately 27 percent or 15,584 live alone and the remaining 42,133 persons live with another person who assists with their care and would potentially qualify to register as a care giver. These 42,133 persons are the potential universe of share care members as certified by a physician or the DA.

DA Duties

Current DA staff in the Older Americans Act unit will respond to the requirements associated with community education, awareness, involvement and the maintenance of the resource director and bibliography required by this proposal. This unit will link with the existing area agency on aging (AAA) structure and network in this process. This function interfaces with the mandate for information and referral of the AAAs.

Management staff at the Central Registry Unit (CRU) will oversee the development, implementation, and ongoing responsibilities for registry and information distribution. One additional Social Services Worker II at the CRU will receive calls, determine eligibility for shared care and add members to the registry. This FTE will require the normal expenses and equipment. Oversight assumes the one new FTE could locate in existing space and has removed the related rent expenses from the fiscal impact provided by the DA.

Brochures

Based on a conservative estimate that approximately 10 percent of potential elderly persons will request information, the DA would print approximately 90,000 brochures. It is estimated that 50 percent would be mailed and 50 percent would be distributed locally or picked up. Printing costs are estimated at $31,500 (35 cents each) and mailing costs would total $13,725 (45,000 at $.305).

Additional Printing and Mailing Expenses

Other expenses identified by the DA include printing costs for the directory and bibliography are expected to total $30,000 (60,000 pieces @ 50 cents each) and mailing costs for these items will total $46,200 (60,000 pieces @ $.77 each). Printing costs for physician's statements and registration forms are expected to total $4,500 (45,000 pieces at 10 cents each) and mailing costs for these items will total $13,725 (45,000 pieces at $.305 each). Printing costs for approval letters are expected to total $1,200 (40,000 pieces at 3 cents each) and mailing costs for these items will total $12,200 (40,000 pieces at $.305 each).

ASSUMPTION (continued)

The DA stated Fiscal Year 2000 costs are based on the 6 month period January 1 through June 30, 2000. Fiscal Year 2001 and 2002 costs include a 3 percent inflation adjustment for expense and equipment costs and a 2.5 percent adjustment for personal services.

Officials from the Office of Administration - Division of Budget and Planning stated the fiscal impact to the state would be the number of eligible people multiplied by the $500 tax credit. These officials deferred to the Department of Social Services - Division of Aging to supply the number of eligible people for the tax credit. The DA assumes 42,133 people would be eligible for this tax credit. This totals $21,066,500 as a potential cost to the General Revenue Fund for the $500 tax credit.

Oversight assumes the first year this tax credit could be claimed is Fiscal Year 2001 and will present a range of $0 to $21,066,500 for this year and the next as it cannot be determined how many people will avail themselves of the tax credit.

Officials from the Department of Economic Development assume that this proposal will not fiscally affect their agency.

Officials from the Department of Revenue did not respond to our request for fiscal impact. Oversight assumes any fiscal impact relating to this proposal could be absorbed with existing resources.

FISCAL IMPACT - State Government	FY 2000	FY 2001	FY 2002
	(6 Mo.)
GENERAL REVENUE FUND
Costs - Department of Social Services -
Division of Aging
Personal Service (1 FTE)	($14,219)	($29,149)	($29,878)
Fringe Benefits	($4,250)	($8,713)	($8,931)
Expense and Equipment for FTE	($8,224)	($3,214)	($3,310)
Forms Printing Expenses	($67,200)	($69,216)	($71,292)
Mailing Expenses	($85,850)	($88,426)	($91,079)
Total Costs - Division of Aging	($179,743)	($198,718)	($204,490)
FISCAL IMPACT - State Government	FY 2000	FY 2001	FY 2002
(continued)	(6 Mo.)
Costs - Department of Revenue		$0 to	$0 to
$500 Tax Credits	$0	($21,066,500)	($21,066,500)
ESTIMATED NET EFFECT ON		($198,718) to	($204,490) to
GENERAL REVENUE FUND	($179,743)	($21,265,218)	($21,270,990)
FISCAL IMPACT - Local Government	FY 2000	FY 2001	FY 2002
	(10 Mo.)
	$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 establishes a new program within the Division of Aging in the Department of Social Services entitled "Shared Care." The primary purpose of the program is to provide services and support for those caring for a certified elderly dependent person by increasing awareness of the available private and governmental services, and by providing a tax credit to qualifying persons. The program also seeks to promote community involvement by encouraging the establishment of local support groups, the dissemination of information, and the provision of

education and training at no cost to families caring for a certified elderly dependent person.

Funds for the Shared Care program are appropriated to and administered by the Department

of Social Services.

Families providing long-term care for a certified elderly dependent person may register with the Division of Aging as a Shared Care member. "Registered care givers" are defined as those living in the same residence with and providing uncompensated care for an elderly dependent person.

The director of the Division of Aging is required to maintain a registry of Shared Care members and providers. The director is also, in conjunction with the Department of Revenue, to develop

a physician certification form to be given to registered care givers on request and a Division of Aging certification form to be given to registered care givers on request when a Division of

Aging assessment has been completed.

DESCRIPTION (continued)

Both forms contain identifying information about registered care givers for tax purposes and information about the Shared Care tax credit program. The director is required to make a list of public and private resources and services related to caring for the elderly available to Shared Care members, and to encourage the development of local support systems for those caring for elderly dependent members.

Registered care givers living with an elderly dependent person at least 6 months per year, and who file the physician certification form or the Division of Aging certification form with their Missouri income tax return may be eligible for reimbursement to help offset the costs of caring for a certified elderly dependent person. This tax credit is available only if the certified elderly dependent person is not receiving services through Medicaid or through the Social Services Block Grant, and is limited to $500 per certified elderly dependent person per year. In no case may reimbursement exceed an eligible Shared Care member's tax liability for the year reimbursement is claimed. Eligible Shared Care members must claim reimbursement at the time the state income tax return is filed. Reimbursement may be claimed for calendar year 2000 and thereafter. The proposal provides that anyone who falsifies any document related to Shared Care tax credits is subject to the same penalties as those provided for falsifying income tax documents.

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

Office of Administration

Department of Economic Development

NOT RESPONDING: Department of Revenue

Jeanne Jarrett, CPA

Director

January 29, 1999