Colorado Legislative Council Staff

STATE & LOCAL

FISCAL IMPACT

TITLE:            CONCERNING ADULT ASSISTANCE PROGRAMS THAT ARE NOT FEDERALLY FUNDED.

Summary of Legislation

            The bill requires that an applicant for Old Age Pension (OAP) benefits must be a resident of the state for at least one year immediately preceding application for OAP. Additionally, the bill provides that the requirement will ensure that applicants meet eligibility critera and that agencies administering OAP funds have sufficient time to process applications. Persons moving to Colorado from other states shall be exempt from the residency requirement if those persons were receiving a similar state-funded general assistance benefit in the other state. Any savings resulting from the requirements of the bill are to be applied to the Aid to the Needy Disabled (AND) in an effort to reduce the inequities between the OAP and AND programs. The requirements of the bill affect those persons applying for OAP after September 1, 1999.

State Expenditures

            Department of Human Services. Although not explicitly stated in the bill, the fiscal note assumes that OAP savings will be applied to the AND State-Only Program (AND-SO) because the AND/SSI Colorado Supplement Program currently brings people to 75 percent of the federal poverty level. Both savings and costs will be incurred under the bill. Table 1 on page 4 of this fiscal note provides calculation detail.

            •   FY 1999-00 Savings in OAP benefit payments are estimated at $101,147. These savings represent 12 new persons monthly (55 case processing months) who will be ineligible for OAP benefits under the bill. These OAP cash fund savings will be applied to AND benefit payments as a General Fund expenditure.

            •   FY 1999-00 Costs to the AND-SO are estimated at $126,434. The OAP savings of $101,147 applied to AND-SO represent the 80 percent state share only for benefit payments. The 20 percent county share is $25,287. The bill is silent on the 20 percent county share required for assistance payments, i.e., AND-SO. The fiscal note assumes that the savings realized in OAP cash benefits offset state costs only, not the total cost which includes county funds. Thus, $101,147 in state moneys available for AND benefit payments requires $25,287 in county funds. The $126,434 available in FY 1999-00 reflects an increase of $5 per month per AND client (average monthly payment of $239 is effective January 1, 1999).

            •   FY 2000-01. Savings in OAP benefit payments are estimated at $149,941. Costs to the AND-SO are estimated at $187,426, and represents the 80 percent state share of $149,941 and the 20 percent county share of $37,485. The $187,426 rereflects an increase of $8 per month per AND client. Projected savings assume an 0.65 percent cost of living increase in the OAP monthly benefit.

            Department of Health Care Policy and Financing. The bill will result in $103,720 net savings in FY 1999-00, and $122,579 in FY 2000-01.

            •   FY 1999-00 Savings and Costs. OAP State Medical Program savings are estimated at $183,091. An estimated 66 clients annually will be ineligible to receive services through the OAP State Medical Program under the bill. Costs in the Colorado Indigent Care Program (CICP) are estimated at $79,371 because clients ineligible for OAP medical services will receive medical services through CICP.

            •   FY 2000-01. Savings in the OAP State Medical Program are estimated at $216,381, and costs in CICP are estimated at $93,802.

Local Government Impact

            The counties 20 percent share for AND benefits payments is $25,287 in FY 1999-00 and $37,485 in FY 2000-01.

State Appropriations

            The fiscal note indicates the Department of Human Services should receive a net appropriation for $25,287 cash funds exempt local funds for FY 1999-00. The appropriation clause should reflect the following:

            •   Old Age Pension Program — $101,147 OAP cash funds reduction;

            •   AND State-Only Grant Program — $101,147 General Fund; and

            •   AND State-Only Grant Program — $25,287 cash funds exempt.

            The Department of Health Care Policy and Financing should receive an appropriation which reduces spending by $103,720 in FY 1999-00. The appropriation clause should reflect the following:

            •   OAP State Medical Program —$183,091 General Fund reduction; and

            •   CICP —$79,371 total appropriation comprised of $10,724 General Fund, $30,069 cash funds exempt, and $38,578 federal funds.

Departments Contacted

            Human Services

            Health Care Policy and Financing

Omissions and Technical or Mechanical Defects

            Department of Human Services. Because the bill is silent on when savings realized will be expended, the fiscal note assumes that savings must be spent in the same year they are earned. This assumption necessitates a projection of savings (which may be higher or lower), rather than applying savings earned in one year to the following year’s expenditures.

Table 1: Itemization of Costs Under SB 99-7

NOTE: The caseload data used in this fiscal note is from a report prepared by the Graduate School of Public Affairs, University of Colorado at Denver in collaboration with its Centers and the Norwest Public Policy Research Program — “Old Age Pension Recipients” (February 1, 1997).