Associated Press Writer
The Nevada Welfare Division will be forced to spend all of its reserve funds plus additional state money to maintain a nearly $83 million-a-year program for needy families through mid-2007, lawmakers were told on Wednesday.
But one member of a legislative budget review panel questioned the wisdom of such a plan.
Caseload levels increased dramatically during a Nevada tourism industry slump caused by the Sept. 11, 2001, terrorist attacks, but federal funding for the needy-families program remains static at $47.5 million a year. That means the division has to serve more people with the same amount of money unless the state increases its share, said Nancy Ford, the division's administrator.
Ford said 22,000 cases, 4,000 more than before Sept. 11, are not adequately funded by the federal money, about $27 million a year in state matching funds and another $8 million in reserves from federal sources.
The state can get through the coming fiscal year with no additional state help, but Ford said $7.7 million more in state funds will be needed to see the Temporary Assistance for Needy Families program through the second year of the two-year budget cycle.
Sen. Bob Beers, R-Las Vegas, who did most of the questioning, said he thought Ford's plan would require spending above and beyond the federal block grant "forever more" unless caseloads are reduced by getting people employment.
Ford said that's the goal but there had been less focus on increasing the job rate after Sept. 11 because caseloads spiked to more than 35,000.
"We had to divert activities to the front-line processing of applications rather than getting people employment," she said.
As a result, the program was penalized $2.1 million for failing to meet federal worker participation rates in 2003. However, Ford said the penalty could be rescinded if the program's job rates rise, which they did in 2004.
To lower spending, Ford said she could cut caseloads or reduce services, but she would rather concentrate on increasing the number of people with jobs "so they do not have to rely on us at all."
"If the caseload could get down to 20,000 I would be able to spend in the block grant," Ford said.
Beers, though, said he wanted alternative plans and questioned how long Ford will wait to see if her strategy works.
"I'm kind of hearing that you don't have a very well-thought-out strategy for bringing your spending to within the limits of your grant," he said.
Ford said she won't know what to do next to reduce spending until her caseloads stabilize, something she hopes will happen by next session.
The program, which ranks 32nd nationally in per capita spending each month, is just one part of the division's proposed $479 million, two-year budget, which includes $146 million in general funds, $289 million in federal funds, plus other funds.
Food stamps and Medicaid are the other two main components, and they have far bigger caseloads than the needy-families program.
By fiscal 2007, the needy-families program is projected to serve 25,600, while more than 126,000 people will participate in the food-stamps program and more than 220,000 will be on Medicaid. The Welfare Division determines Medicaid eligibility, while the Division of Health Care Financing and Policy provides services.
Like the needy-families program, Medicaid and the food-stamps program also have some reforming to do. Nevada ranks 51st in per capita Medicaid spending and 50th in the average monthly number of food stamp recipients as a percentage of the population. The state's overall welfare spending per capita comes in at 49th.