Colorado Legislative Council Staff

STATE and LOCAL

REVISED FISCAL NOTE

(replaces Fiscal Note dated January 12, 1998)

TABOR Refund Impact

State General Fund Expenditure Impact

Cash Funds Revenue and Expenditure Impact

Cash Funds Exempt Revenue Impact

Federal Funds Expenditure Impact

Local Revenue and Expenditure Impact

Drafting Number:

Prime Sponsor(s):

LLS 98-370

Rep. Dean

 

Date:

Bill Status:

Fiscal Analyst:

March 31, 1998

House Appropriations

Janis Baron (866-3523)

 

TITLE:            CONCERNING THE CREATION OF INCENTIVES TO PREVENT RECEIPT BY INMATES OF ILLEGAL PAYMENTS UNDER PUBLIC PROGRAMS.


Summary of Legislation


STATE FISCAL IMPACT SUMMARY

FY 1998/99

FY 1999/2000

State Revenues

   Cash Funds

   Cash Funds Exempt



 


*

*

State Expenditures

   General Fund

   Federal Funds

   Cash Funds — Workers’ Compensation Cash Fund


$8,125

8,125

5,123


$ 4,800

4,800

0

FTE Position Change

None

None

Local Government Impact — Potential increase in revenue and expenditures to county sheriffs.

 

*    Potential increase in cash funds and cash funds exempt revenue to the Department of Corrections as a result of rewards.


            The bill, as amended, does not change its fiscal impact. The bill includes the following provisions:

 

               requires the Departments of Corrections (DOC), Human Services (DHS), Labor and Employment (DOLE), and county sheriffs to develop a system for reporting identifying information about persons confined in local jails and state correctional facilities to identify persons who should be disqualified from receiving workers’ compensation or public assistance payments while incarcerated;

               requires the system to be implemented on or before July 1, 1999, within existing appropriations;

               no later than July 1, 1999, requires the DOC and each sheriff in the state to periodically transmit identifying information about each adult person confined in a correctional facility or jail to DHS and DOLE;

               requires that a portion of the moneys saved by identifying such disqualified persons be paid as a reward to either the DOC or the sheriff, whichever reported the information;

               allows the executive director of DHS to apply for federal waivers necessary to maximize the amount of the incentive payments to DOC and to sheriffs;

               as amended, stipulates that DHS shall not pay a reward to DOC or a sheriff for providing identifying information in connection with a participant in the Colorado Works Program unless the federal government permits any amount paid as a reward to qualify as an expenditure for the purposes of meeting the state’s maintenance of effort;

               as amended, stipulates that DHS shall not pay a reward if the state costs of implementing the bill’s provisions exceed the overall savings of state moneys;

               requires a disqualified individual receiving workers’ compensation to repay to the employer or the insurance carrier, any amount received while not qualified plus a penalty of 50 percent; and

               includes a “no appropriation” clause.


            The bill is effective at 12:01 a.m. on the day following the ninety-day period after adjournment sine die of the General Assembly, or on the date of the official declaration of the vote of the people as proclaimed by the Governor, if a referendum petition is filed pursuant to Article V, Section 1 (3) of the State Constitution.



State Revenues


            The bill could impact cash funds and cash funds exempt revenue to DOC since it requires DHS and any workers’ compensation insurance carrier or self-insured employer to pay a portion of the moneys saved by identifying disqualified persons to either the sheriff or the DOC, whichever reports the information, as a reward. However, the ability of the DHS to pay these reward moneys is conditional upon the approval of federal waivers to use these moneys for this purpose. As amended, the bill makes exceptions to reward payments for participants in the Colorado Works Program contingent upon federal approval that reward payments qualify as expenditures under the state’s maintenance of effort. Additionally, DHS shall not pay a reward if the state costs of implementing the bill’s provisions exceed the overall savings of state moneys. Any reward moneys received by DOC from DHS would be cash funds exempt since these funds are originally appropriated in the Long Appropriations Bill, while reward moneys received from any private workers’ compensation insurance carrier or self-insured employer would be cash funds. These moneys are not estimated at this time because it is unknown how many individuals will have their benefits reduced or discontinued.



TABOR Refund Impact


            Section 20 of Article X of the Colorado Constitution, limits the maximum annual percentage increase in state fiscal year spending. Once total state revenue from all sources that are not specifically excluded from fiscal year spending exceeds these limits for the fiscal year, the state constitution requires that the excess shall be refunded in the next fiscal year unless voters approve a revenue change as an offset. Based on the current Legislative Council economic forecast, it is projected that the state will be in a TABOR refund position during each of the next five fiscal years. Any increase in state revenue from changes in fees, fines, licenses, or other revenue sources will affect the amount of the state revenue to be refunded.



State Expenditures


            Although the bill contains a “no appropriation” clause, costs will be incurred in the Department of Human Services and the Department of Labor and Employment. The fiscal note assumes funding will be required in FY 1998-99 to implement the system and have it fully operational July 1, 1999, as required in the bill.


            Department of Human Services — DHS will require a one-time appropriation of $16,250 in FY 1998-99 to develop a computer program to match inmate social security numbers against the Client Oriented Information Network (COIN) data base, Food Stamp System, and the Low Income Energy Assistance Program System. If a match is located, information will be forwarded to the appropriate agency in the department, which will then contact the appropriate county sheriffs’ office or DOC. These programming changes will require an estimated 250 hours of contract computer programming services at $65 per hour (250 hrs. x $65 = $16,250). Total cost includes $8,125 General Fund and $8,125 federal funds. The fiscal note assumes that the following public assistance programs may be affected:

 

               Food Stamps

               Temporary Aid to Needy Families (TANF)

               Low Income Energy Assistance Program (LEAP)

               Aid to the Needy Disabled, Supplemental Security Income, Colorado Supplement (AND/SSI/CS)

               Aid to the Needy Disabled State-Only Program (AND-SO)

               Aid to the Blind

               Old Age Pension (OAP)


            FY 1999-00 — Additionally, DHS will require $9,600 in FY 1999-00 and subsequent years to perform a monthly search for any matches between inmate identification data and the public assistance programs noted above. These ongoing contract costs are estimated at 20 hours per month at a rate of $40 per hour (20 hrs. per month x 12 months x $40 = $9,600). The total cost includes $4,800 General Fund and $4,800 federal funds.


            TANF — The ability of DHS to pay reward moneys is conditional upon the approval of federal waivers to use these moneys for this purpose. There are no waiver provisions in the TANF program. As amended, the bill stipulates that DHS shall not pay a reward to DOC or a sheriff for providing identifying information in connection with a participant in the Colorado Works Program unless the federal government permits any amount paid as a reward to qualify as an expenditure for the purposes of meeting the state’s maintenance of effort. Cash or other assistance provided to individuals are part of a county’s block grant under SB 97-120 — Concerning Welfare Reform, and consist of federal, state and county funds. Although the overall level of funding is determined annually by appropriation, the aggregate state and county share must be at least 80 percent of a base year to prevent a loss of federal funds and the federal requirement to increase state funding to make up for that loss. Once funding is made available to counties in their block grant, any potential benefits that are not paid to incarcerated individuals will remain in the county block for use in other areas in the Colorado Works Program. Therefore, any reductions/savings in program expenses resulting from HB 98-1133 must be from state and county funding appropriated for TANF in excess of the 80 percent minimum maintenance of effort.


            It is unknown how many individuals will have their benefits reduced or discontinued, thus estimates of program reductions are not identified at this time. Table 1 on page 4 identifies the anticipated monthly reward per case for TANF, AND/SSI/CS, AND-SO, and AB in FY 1999-00. Food Stamps benefits are 100 percent federally funded so any reduction in this program will not impact state or county expenditures.

 DHS Benefits Program

FY 1999-00

 

DHS Benefits Program

FY 1999-00

TANF

Adult Share of Cash Payment

x 12% State Share of Payment

= State Share of Payment

x 25% Incentive Reward

= Monthly Reward per Case


$149.00

12%

$17.88

25%

$4.47

 

AND/SSI/CS

Average Monthly Cash Payment

x 80% State Share of Payment

= State Share of Payment

x 25% Incentive Reward

= Monthly Reward per Case


$65.10

80%

$52.08

25%

$13.02

AND-SO

Average Monthly Cash Payment

x 80% State Share of Payment

= State Share of Payment

x 25% Incentive Reward

= Monthly Reward per Case


$156.07

80%

$124.86

25%

$31.22

 

AB

Average Monthly Cash Payment

x 80% State Share of Payment

= State Share of Payment

x 25% Incentive Reward

= Monthly Reward per Case


$52.32

80%

$41.90

25%

$10.48


            Department of Labor and Employment — DOLE will require a one-time appropriation of $5,123 cash funds from the Workers’ Compensation Cash Fund for FY 1998-99. The Division of Workers’ Compensation will design a computer program to run a match of social security numbers against its claimant data base. If there is a match on any social security number, the program will pull identifying claimant information (name, date of birth, insurance carrier or employer information) and transmit the information to a temporary data file. The program will then generate a form letter to the insurance carrier or employer and provide them with the claimant/incarceration information. Copies will be forwarded to the appropriate correctional facility as well as the claimant’s files. The division will make no follow-up on payments of the reward (it is assumed that will be the responsibility of the insurance carrier or employer). DOLE will require 85 hours of computer programming at a cost of $60.27 per hour (85 hrs. x $60.27 = $5,123) to perform these tasks.



Local Government Impact


            The bill will result in increased expenditures by county sheriffs since it requires county sheriffs to develop and implement by July 1, 1999, a system to report identifying information about persons confined in local jails to DHS and DOLE. Given varying resource levels between the state’s 63 county sheriffs’ offices, the cost for each of the sheriffs’ offices has not been estimated at this time.

            The ability of DHS to pay reward moneys is conditional upon the approval of federal waivers to use these moneys for this purpose. If such waivers are approved, reward moneys could offset a part or all of the costs incurred by the county sheriffs.



Spending Authority


            The fiscal note indicates that the Department of Human Services should receive an appropriation of $16,250 in FY 1998-99. Of this amount, $8,125 should be General Fund and $8,125 should be federal funds. The Department of Labor and Employment should receive a cash funds appropriation of $5,123 cash funds from the Workers’ Compensation Cash Fund.



Departments Contacted


            Corrections

            Human Services

            Labor and Employment


FACTS AND ASSUMPTIONS



Facts

 

1.         The El Paso County Sheriffs Office and the El Paso County Department of Social Services indicates that $146,082 in social security benefits, $114,330 in unemployment insurance benefits, and $9,811 in public assistance benefits were postponed to inmates in the county jail in 1996.


Assumptions

 

1.         Since the bill allows DHS, DOLE, DOC, and county sheriffs until on or before July 1, 1999 to implement the system, it is assumed the system will not be operational until July 1, 1999.

2.         Data would be transmitted from the county sheriffs and the DOC in electronic text file format.

3.         Inmate identifying information will be transmitted on a monthly basis from the county sheriffs and DOC to DHS and DOLE.

4.         Any possible savings from identification and disqualification of inmates receiving social security benefits is not reflected in this fiscal note since these payments originate with the federal government and are not reflected in the state’s budget.