One Voice Pre-Legislative Forum Maximizing Federal Funds: The State Budget September 27, 2006

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One Voice Pre-Legislative ForumOne Voice Pre-Legislative Forum

Maximizing Federal Funds: Maximizing Federal Funds: The State BudgetThe State Budget

September 27, 2006September 27, 2006

Eva DeLuna Castro, Senior Budget AnalystCenter for Public Policy Priorities

[email protected]

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Presentation Outline

• Brought to you by the federal government:

1) Information 2) Money

• More details on how federal funds in the state budget are serving Harris County; how that could change in 2007 legislative session

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Texas and U.S. Poverty, 2004-05

Texas U.S.

Poverty rate 16.3% 12.7%

Total in poverty 3.675 million 37.0 million

By ethnicity: In Texas, 23% of African-Americans; 26% of Hispanics; 7.5% of non-Hispanic Whites; and 12% of Asian-Americans live below the poverty line ($9,800/year for one person; $16,600 for a family of 3)

By age group: 25% of children in Texas live below the poverty line; 13% of Texans ages 65 and over live in poverty. US averages: 19% poverty for children; 10% for age 65 and over.

Source: U.S. Census Bureau, March Current Population Survey

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ACS 2005: Growth Continues, But Poverty Increases Even More

2.929 2.971 3.002 3.010 3.071 2.995

0.430 0.448 0.513 0.544 0.6530.5290.0

1.0

2.0

3.0

4.0

2000 2001 2002 2003 2004 2005

Mill

ion

s o

f Har

ris

Co

un

ty R

esid

ents

Poor Above poverty line

Source: U.S. Census Bureau, 2005 American Community Survey

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ACS 2005: Child Poverty Increase is Especially Troubling

8

1210

1113

12

1818 1921 22

26

21

15151513 13

0

10

20

30

2000 2001 2002 2003 2004 2005

Po

vert

y R

ate

in H

arri

s C

ou

nty

Child povertyElderly Poverty (65+)Overall Poverty


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Harris County Residents, 20053.6 million people total

Afr-Am, Below Poverty Line, 169,116 , 5%

Hispanic, Below Poverty Line, 353,302 , 10%

White/Other, Below Poverty Line, 128,412 ,

4%

African-American,

Above Poverty Line, 477,677 ,

13%

Hispanic, Above Poverty Line,

1,016,175 , 28%

White/Other Above Poverty

Line, 1,489,710 , 40%

Poverty rates by ethnicity:

18% overall

Hispanic: 26%

African-American: 26%

White/Other: 8%


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Harris County Residents by Age and Poverty, 2005

185,416311,689 32,75828,935

92,032

1,677,855

238,392294,565

542,237

230,513

0

500,000

1,000,000

1,500,000

2,000,000

Under 5 5 to 17 18 to 54 55 to 64 65 and over

Above poverty line

In poverty

Poverty rates: 28.5% 25.5% 15.7% 8.9% 12.1%


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51,68575,311144,413

0

200,000

400,000

600,000

Less than HS HS Graduate Some College/2 Yr Deg

Bachelor's Grad./ Prof.

Above poverty

Below poverty line

Harris County Adults by Education & Poverty Status, 2005 (Age 25+)

Poverty rates: 27.4% 14.0% 9.2% 3.5% 3.6%


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Educational Enrollment of Harris County Residents, 2005 (Age 3+)

Totals: 897,900 in public, 121,100 in private, 2.4 million not enrolled

46,705 53,149

221,455 210,724 208,452

133,541

23,8730

50,000

100,000

150,000

200,000

250,000

Presc

hool

Kinder

garte

n

Grade

s 1

to 4

Grade

s 5

to 8

Grade

s 9

to 1

2

Under

graduat

e

Grad.

/Pro

f. Sch

ool

Private

Public


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39

32

7

25

8

13

7

8

3

2

12

10

24

10

0% 20% 40% 60% 80% 100%

Percent of federal spending

Medicare/ Military & Direct payments Medicaid Hwys Other Nonmilitary Social Sec Veterans to people/firms Grants Empl/Goods

Texas$142 b

$6,313 per capita

HarrisCounty$15.8 b

$4,388 per capita

Source: U.S. Census Bureau, Consolidated Federal Funds Reports

Federal Spending in Harris County, 2004

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$0 $2 $4 $6 $8 $10

State only

K-12 HHSC Aging/Disability

Other HHS Highways/DPS Higher Ed

Prisons Workforce Other

K-12: $2.0 billion (state aid to local school districts; Teacher Retirement System)HHSC: $753 million Aging/Disability: $157 million FPS/DSHS/DARS: $86 millionHighways & Dept. of Public Safety: $617 million Higher Education: $808 million

Prisons (TDCJ): $559 million Workforce Commission: $55 million All Other: $1.2 b

$6.2 billion

State Govt. Spending in Harris County, 2005

Source: Texas Comptroller of Public Accounts, County Expenditures

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$0 $2 $4 $6 $8 $10

State only

With Federal




Federal funds added for No Child Left Behind, Special Education, School Lunch/Breakfast, Voc. Ed., and more:

$478 million

State Govt. Spending of K-12 Federal Funds


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$0 $2 $4 $6 $8 $10

State only

With Federal




Federal funds added for Medicaid, CHIP, TANF, Food Stamps, and more:

$1.2 billion

State Govt. Spending, HHSC Federal Funds


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$0 $2 $4 $6 $8 $10

State only

With Federal




Federal funds added for nursing home & community long-term care and more:

$235 million

State Govt. Spending, DADS Federal Funds


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$0 $2 $4 $6 $8 $10

State only

With Federal




Federal funds added for child protection, foster care, public health, mental health, ECI, and more:

$110 million

State Govt. Spending of Other HHS Federal Funds


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$0 $2 $4 $6 $8 $10

State only

With Federal




Federal funds added for highways, transit and more:

$628 million

State Govt. Spending of Federal Highway Funds


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$0 $2 $4 $6 $8 $10

State only

With Federal




Higher Ed: Minimal Federal Funds in State Budget


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$0 $2 $4 $6 $8 $10

State only

With Federal




Prison System Doesn’t Add Much in Federal Funds Either


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$0 $2 $4 $6 $8 $10

State only

With Federal




Federal funds added for workforce, child care, & more:

$403 million

Workforce System Almost Entirely Federally Funded


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$0 $2 $4 $6 $8 $10

State only

With Federal




Federal funds added for child support enforcement,

housing/comm dev, envir. protection, & more:

$188 million$6.2 billion

$9.5 billion

Other State Govt. Spending of Federal Funds, 2005


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Recap: State and Federal Funding of State Govt. Services in Harris County, 2005

State Funds

Federal estimate

K-12, Teacher Retirement $2.0 billion $478 million

HHSC (Medicaid, CHIP, TANF, Food Stamps) $753 million $1.2 billion

Aging & Disability $157 million $235 million

Other HHS (FPS, DARS, State Health Svcs) $86 million $110 million

Highways/State troopers $617 million $628 million

Higher Education $808 million $16 million

Prisons (TDCJ) $559 million $5 million

Workforce Commission $55 million $403 million

All Other $1.3 billion $188 million

TOTAL $6.2 billion $3.3 billion


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Boosting Harris County’s Share of State Spending

In 2005, Harris County accounted for 14% of state spending, but it is home to 16% of the state’s residents

How to improve that statistic:

Work with Harris County delegation to see that state formulas to distribute federal funds (county allocations, rates, regional distributions) don’t put local service providers at a disadvantage

Make sure that eligible residents are being served by Medicaid, Food Stamps, other major programs

Understand what budget cuts (10% reduction proposals for 2008-09) will cost in lost federal funds and the services they provide

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68,522 64,153

118,000 114,647

105,197 102,465

19,556 20,615

0

120,000

240,000

360,000

Sept. 2005 Aug. 2006

65 and over

18 to 64

5 to 17

Under 5

Total: 311,275 Total: 301,880

Recent Changes, Food Stamp Enrollment in Harris County

Source: Texas Health and Human Services Commission

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Harris County Residents by Age and Poverty, 2005

185,416311,689 32,75828,935

92,032

1,677,855

238,392294,565

542,237

230,513

0

500,000

1,000,000

1,500,000

2,000,000

Under 5 5 to 17 18 to 54 55 to 64 65 and over

Above poverty line

In poverty

Poverty rates: 28.5% 25.5% 15.7% 8.9% 12.1%


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21,864

15,696

5,376

3,601

0

10,000

20,000

30,000

Sept. 2005 Jul. 2006

Adults

Children

Recent Changes, TANF Enrollment in Harris County

Source: Texas Health and Human Services Commission

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Texas Child Medicaid and CHIP Enrollment (Jan. 2002-August 2006)

Sources: Enrollment from Texas Health and Human Services Commission; Uninsured from Census Bureau March Current Population Survey.

2.03

2.16

2.06

2.15

1.311.42

1.341.45

1.0

1.2

1.4

1.6

1.8

2.0

2.2

Jan-02

May-02

Sep-02

Jan-03

May-03

Sep-03

Jan-04

May-04

Sep-04

Jan-05

May-05

Sep-05

Jan-06

May-06

Mill

ion

s o

f c

hild

ren

On Medicaid or CHIP

Uninsured

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Harris County Medicaid & CHIP Enrollment (August 2005-August 2006)

Source: Texas Health and Human Services Commission.

Aug-05 Sep-05 Oct-05 Nov-05 Dec-05 Jan-06 Feb-06 Mar-06 Apr-06 May-06 Jun-06 Jul-06 Aug-06

CHIP and Child Medicaid

Adult Medicaid

Almost 382,000 children covered in Nov-Dec 2005

About 118,600 in June 2006; by August, back up to 119,500

About 129,000 in January 2006

Below 356,000 in June 2006; back up to 361,200 by August

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Governor’s Budget Instructions for 2008-09

10% Cut in General Revenue and GR-Dedicated funds: except for Medicaid and foster care CASELOAD (but not COST) increases, most budget proposals for state services must reflect a 10% reduction in state funding, even if this means that state won’t meet minimum match or maintenance of effort (MOE) requirements

Why is this being done? (especially after 5%-cut-instructions in 2005, and 12.5%-cut in 2003)

a) It’s a “useful planning exercise”b) It’ll create confusion about exceptional items needed to keep things from

getting worse (restoration), exceptional items that are “current services” (need more money to do the same thing, because it costs more), and exceptional items that would be an actual improvement or expansion

c) If 10% cuts can actually be implemented, some General Revenue will become available to pay for supplemental spending needs for the current year (fiscal 2007) and/or for newly enacted school property tax cuts

Source: Health and Human Services Commission, LAR 2008-09.

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Digging a Hole

In billion $ 2008-09 2010-11 Total

HB 3 (business tax) 6.8 7.7 14.5

HB 4 (used cars) 0.1 0.1 0.2

HB 5 (cigarettes) 1.4 1.3 2.7

TOTAL REVENUE 8.3 9.1 17.4

Cost of HB 1 -18.8 -20.2 -39.0

Gap between HB 1 and

HB 3,4,5

-$10.5 b -$11.1 b -$21.6 b

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State “Own Source” Spending/Revenue

K-12: $47.7 K-12: $32.5

Higher Ed: $19.4

Higher Ed: $17.7

HHS: $22.8

HHS: $19.2

Prisons: $8.7

Prisons: $8.3

Eco. Dev.: $9.2

Eco. Dev.: $9.2

Other: $8.1

Other: $7.0

$-

$20

$40

$60

$80

$100

$120

2006-07 Revenue for 2008-09 Needs, 2008-09

$94 billion

$113 billion $116 billion

“Own Source” = not counting federal funds. “Needs” does not include more than $3 billion in GR funding requested for improvements or restorations.

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HHSC Budget Request for 2008-09

10% Instructions: would require $72 million cut in General Revenue spending, plus the loss of $106 million in federal funds and layoffs of 550 state employees

Base increase: $711 million more in General Revenue, mostly for caseload growth in Medicaid, would draw down another $611 million in federal funds

Exceptional items:•$1.8 billion in GR to deal with Medicaid and CHIP cost increases—what state pays for medical services/drugs—would draw down $2.8 billion in federal funds; $237 million GR and $370 million federal would restore rates to 2003 levels

•$255 million in GR for HHS waiting lists, mostly for community care, would draw down $282 million in federal funds

•Restoring CHIP perinatal coverage would save $20 million in GR and draw down $157 million more in federal dollars, vs. covering these infants in Medicaid

Source: Health and Human Services Commission, LAR 2008-09.

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Aging & Disabilities Budget for 2008-09

10% Instructions: would require $112 million cut in General Revenue spending, plus the loss of $130 million in federal funds and layoffs of 298 state employees. Client impacts: Community Based Alternatives Waiver (CBA): 2,261 fewer served; Home and Community Based Services (HCS): 1,119 fewer served; Community Living Assistance (CLASS): 316 fewer served; Deaf Blind Multiple Disabilities (-14); Medically Dependent Children (-213); Consolidated Waiver Program (-18); Texas Home Living Waiver (-198); Non-Medicaid Services (-131); Mental Retardation Community Services (-799); In Home and Family Support (-391); MR In-Home Services (-275)

Base increase: $71 million more in General Revenue, mostly for caseload growth in Medicaid, would draw down another $148 million in federal funds

Exceptional items:$84 million in GR would draw down $129 million in federal funds to maintain caseloads for waiver programs; $8 million in GR and $12 million federal would fund Promoting Independence to get 240 ICF-MR clients and 120 children leaving foster care into the HCS Waiver program

Source: Dept. of Aging and Disabilities Services, LAR 2008-09.

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Family & Protective Services Budget for 2008-09

10% Instructions: $40 million cut in General Revenue spending, all of which would be made to prevention services. Client impacts: STAR would serve 3,262 fewer youth every month; Community Youth Development (CYD) clientele would be cut by 1,447; Texas Families would reach 1,842 fewer families; and other at-risk prevention services would reach 1,497 fewer children.

Base increase: $674 million more in General Revenue, mostly to replace “Rainy Day Fund” dollars used in 2006-07 for CPS reform and foster care

Exceptional items:•$95 million in GR to continue CPS/APS reform and adjust for method of finance changes (draws down $28 million in federal funds; 1,475 staff would be funded)

•$51 million in GR to keep CPS caseloads from getting worse (draws down $12 million federal; funds 550 caseworkers and other staff)

•$13 million GR to expand community-based prevention programs

Source: Dept. of Family and Protective Services, LAR 2008-09.

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State Health Services Budget for 2008-09

10% Instructions: would require $236 million cut in GR-related spending, plus the loss of $59 million in federal funds and layoffs of 693 state employees.

Major cuts: $45 million GR-Dedicated for WIC Nutrition/Farmers Markets; $41 m GR + $38 m federal for adult mental health services (7,728 clients); $8.5 million GR + $8 m federal for children’s MH services (842 clients); $7.6 m GR + $7 m federal for NorthSTAR Behavioral Health waiver; $4.6 m GR + $5 m federal for substance abuse. GR cuts to Maternal & Child Health could endanger the whole federal grant ($35 million annually).

Exceptional items: Other than restoring the 10% GR cut, DSHS exceptional items would not expand the use of federal funds, but would improve staffing for various public health programs. 97 new positions would be funded for state mental hospitals (to continue the capacity increase approved for 2006-07); 123 staff would provide preparedness/prevention/emergency response services to the 188 counties that lack a public health authority.

Source: Dept. of State Health Services, LAR 2008-09.

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Assistive & Rehabilitative Svcs. Budget for 2008-09

10% Instructions: would require $13 million cut in General Revenue spending, plus the loss of $45 million in federal funds and layoffs of 168 state employees. Rehab/employment programs for blind/visually impaired and for deaf would be cut; general vocational rehab program would serve 13,875 fewer clients.

Base increase: $9 million more in General Revenue (before 10% cut) would draw down another $36 million in federal funds

Exceptional items:$8 million in GR would draw down $33 million in federal funds, newly available because of 3.5% annual increase in Vocational Rehabilitation Grant, and prevent the creation of a waiting list. $3.70 in federal funds for every $1 in GR

Legislature could also approve staffing increase of 122 employees in fiscal 2008, plus another 40 employees in 2009, for SSI and SSDI determination (100% federally funded)

Source: Dept. of Assistive & Rehabilitative Services, LAR 2008-09.

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Federal Reauthorization NeededHIV Care Formula Grant: authorization expired at end of fiscal 2005. Congress could change formulas to favor Southern states. $73 million in fiscal 2006.

Special Programs for the Aging (Nutrition & Supportive Services): $55 million a year for DADS

Refugee and Entrant Assistance: no match required. Funds cash & medical assistance, social services, some admin costs. $16 million in fiscal 2006.

Family Planning Services: $14 million annually to Dept. of State Health Svcs.

Family Caregiver Support: $8 million/yr for Texas for support svcs for family caregivers and for grandparents/other older adults who care for relatives

Preventive Health Services: Sexually Transmitted Disease Control Grants: $7 million a year for Dept. of State Health Services

Source: LBB, Top 100 Federal Funding Sources, April 2006.

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More InformationLegislative Budget Board, Top 100 Federal Funding Sources and Federal Funds Watch (newsletter): http://www.lbb.state.tx.us/Federal_Funds/Federal_Funds.htm

Texas Office of State-Federal Relations, News from Washington and more:http://www.osfr.state.tx.us/

Source: LBB, Top 100 Federal Funding Sources, April 2006.

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One Voice Pre-Legislative Forum Maximizing Federal Funds: The State Budget September 27, 2006

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