Colorado Legislative Council Staff

STATE

FISCAL IMPACT

TITLE:            CONCERNING THE AUTHORIZATION FOR A COLORADO AT-RISK YOUTH PROGRAM.

*It is anticipated that the 56.1 FTE will be funded by federal sources.

Summary of Legislation

            This bill, subject to the receipt of federal moneys, authorizes the Department of Military Affairs (MA) to operate a residential program for "at-risk youth." MA would provide alternative education through the use of independent contractors or national guard civilian employees, facilities, and equipment through the national guard. "At-risk youth" would be persons 16 to 18 years of age who have been suspended or expelled, habitually truant, or habitually disruptive in school.

            This bill directs that only federal funds may be used to pay the salaries for employees in the program. It stipulates that the program cannot operate in any year unless MA receives a federal Department of Defense grant for at least sixty percent of all program costs. For the remainder of the program costs, this bill requires the Adjutant General to apply for available federal, state, or local moneys for the implementation and operation of this program. It also establishes the "At-risk Youth Challenge Corps Fund" for the receipt of grants, gifts, or donations for the purpose of implementing the program.

Program Background

            The Challenge Program was created by Congress five years ago as a four-year pilot program for "at risk" youth (defined to be 16 to 18 years old who have dropped out or have been expelled from school). The program authorizes the use of National Guard facilities and personnel to provide military-based training for the purpose of education, life skills training, job training, and counseling to enable youth to succeed in an employment or educational environment after graduation. The Challenge Program is in operation in 20 states. Five of those states, including Colorado, began implementation in FY 1998-99.

            The Challenge Program consists of two 22-week sessions a year, each followed by a one-year mentoring program. The first two weeks of the session are called "Pre Challenge" which is followed by a 20-week resident program. Program instruction has eight components: 1) education, 2) job skills, 3) life coping skills, 4) physical fitness, 5) community service, 6) responsible citizenship, 7) health, nutrition and sex education, and 8) leadership/"followership." The education component consists of preparation for the general education development (GED) test. Prospective volunteers must be expelled, at risk of expulsion or suspension, 16 to 18 years of age, and free from current illegal drug use. Prospective students can not be on parole, probation, awaiting sentencing for adult status offenses, or have a prior felony conviction. The four-year pilot program was implemented in 15 states with over 14,000 students. An impact study tracking students for one year after participation found the following:

            •   80% of the students that were accepted to the resident phase graduated;

            •   80% of students were placed (in a school or job setting) after graduation;

            •   83% achieved their GED; and

            •   less than 1% of graduates were incarcerated during the study period.

            In order to secure the necessary federal funds to begin implementation in FY 1998-99, the state needed to appropriate 25 percent of total year 1 funding, or $700,000, to MA (see Table 1 on page 3 for state-federal cost sharing schedule). With H.B. 98-1234, the General Assembly appropriated an additional $500,000 cash funds exempt from the public school fund to the Department of Education (CDE) for the expelled student services program. In June 1998, MA received a $700,000 grant from CDE (including the $500,000 CFE and an additional $200,000 GF from the expelled student services program) to administer the first year of the program.

            As a condition of continued federal funding, state funding must increase by five percent each year until the state covers 40 percent of the annual program cost. State funds (including other sources) are not expected to pay more than 40 percent of the program cost. Table 1 on page 3 illustrates the expected funding from federal, state, or other sources through FY 2002-03.

Table 1: Expected Funding Sources and Federal/State/Other Share of Total

*Actual funding

State Revenues

            The bill allows MA to receive gifts, grants, and donations to the "At-risk Youth Challenge Corps Fund" to cover non-federal funding sources. In FY 1998-99, CDE provided a $700,000 grant from its expelled student services program. For FY 1999-00, MA must find $840,000 in order to secure federal funds and continue the program. This program cannot receive federal funds unless revenue in the form of gifts, grants, or donations from private and public sector sources is furnished before August 1, 1999.

            MA described the options it is pursuing for gifts, grants, and donations. CDE may continue to provide discretionary funds from this program to support the at-risk youth program. Other state agencies associated with the Judicial Branch may also provide grants to the Fund. Federal agencies such as the U.S. Department of Education may provide grants and/or funds. MA is pursuing grant applications to local non-profit foundations. MA is also pursuing the option for a half-year of funding to operate the program for six months. However, as of the date of this fiscal note, MA has not been able to secure funding from any source.

State Expenditures

            According to the current FY 1998-99 budget, there are 56.1 contractual or temporary FTE employed by this program at a cost of $1.45 million. In the current FY 1998-99, MA is following the expected funding source share from Table I above and uses state (cash exempt) funds for 25 percent of the personal cost and federal funds for the remaining 75 percent of the personal cost.

            For future operations, this bill directs that only federal funds may be used to pay the salaries for employees in the program. MA estimates that FTE requirements will remain near or at 56.1 FTE and $1.45 million for the next two fiscal years. According to Table 1 on page 3, federal funds should cover personal costs, assuming MA is able to secure the necessary gifts, grants, and donations to cover the remaining 30 to 40 percent of the program cost.

State Appropriations

            This fiscal note implies that for FY 1999-00, the Department of Military Affairs will not require any General Fund appropriation. $1,960,000 in federal funds will be provided to MA on the condition that MA can raise $840,000 from gifts, grants, and donations by August 1, 1999.

Departments Contacted

                        Military Affairs