Mayor Gray Takes Balanced/Unbalanced Approach To DC Budget

I, along with many others, have been advocating for a balanced approach to balancing the District’s Fiscal Year 2012 budget. Now I see that there’s more than one way to take an unbalanced approach.

What we meant was that the budget should be balanced by a reasonable mix of spending cuts and new revenue-raisers. Mayor Gray did a relatively good job on this score.

“Relatively” because, according to the mayor’s own summary, spending cuts account for $187 million, while the revenue-raising proposals would bring in a projected $135 million.

But the spending cuts are egregiously unbalanced. As the DC Fiscal Policy Institute reports, human services programs would lose $130 million — more than two and a half times their share of the locally-funded budget.

The mayor deserves credit for backing off his opposition to any increase in income taxes. He proposes a new, slightly higher top rate for residents with adjusted incomes over $200,000 — 0.4% higher than what they’re paying now.

According to the Chief Financial Officer’s letter certifying the budget as balanced, the new bracket, plus some unspecified limit on itemized deductions, would yield $35.4 million next year — somewhat over a third of what the plan advocated by Save Our Safety net and allies would bring in.

But at least it’s a step in the right direction — maybe even an indication that the mayor attended to the feedback he asked for.

Other smart revenue-raisers include an extension of the sales tax to live theater tickets, an overdue hike in the off-street parking tax, an increase in the modest minimum business franchise tax and, I infer, the final legislation needed to prevent multi-state corporations from legally evading the local corporate tax.

But the proposed budget is nonetheless, to use the old cliche, balanced on the backs of the poor.

We’ll undoubtedly be learning more about the cuts to human services programs in days to come. So let me just pick out three of the big ones here.

Homeless Services. The proposed budget would reduce funding for homeless services by $11 million — this when the current funding shortage has led the Department of Human Services to deny shelter to homeless families who’ve got no place to stay.

IDA. Local funding for the Interim Disabilities Assistance program would be cut by 75%, leaving only $875,000 for stipends to low-income severely disabled residents who are waiting for the Social Security Administration to act on their claims for Supplemental Security Income.

Last year, SSA had a backlog of more than 705,300 disability claims hearings. Now it’s unable to speed up resolution time because the budget impasse in Congress has meant no additional funding. So it seems that no one on the IDA waiting list will get a stipend for a very long time, if ever.

TANF Benefits. Funding to provide cash assistance to families enrolled in the Temporary Assistance for Needy Families program would be cut by an additional $7.9 million.

I understand that $4.9 million of this cut represents the mayor’s reversion to his earlier plan to totally phase out benefits to families who’ve been in the program for more than five years.

The initial 20% cut that’s already been imposed leaves a family of three with $342 per month — 21% of the very low federal poverty line. Imagine what this means to the children whose future the mayor claims to be so concerned about.

Imagine what it will mean when the family gets even less and then less until there’s no cash income at all. And this almost certainly will happen to some families because many long-term TANF recipients face formidable, multiple barriers to work.

The remaining $3 million will be “saved” by imposing full family sanctions, i.e., cut-offs of all cash assistance when the participating parents don’t comply with the requirements in the job preparation/job search plan that’s been developed for them.

We’ve seen something like this before — in former Mayor Fenty’s 2009 budget-gap closing plan.

As I remarked at the time, it creates a perverse incentive to find TANF parents in noncompliance, minimize efforts to resolve problems and get sanctions in place as quickly as possible because that’s the only way sanctions can save as much as the budget assumes.

In his recent State of the District address, Mayor Gray asked us to share his vision for the District and its government. “Above all,” he said, “it is a compassionate government — one that takes as its most urgent task the welfare of the least fortunate among us.”

I don’t see that in his proposed budget. Do you?

UPDATE: I was too optimistic about prospects for disabled residents on the IDA waiting list. DCFPI analysts report that Mayor Gray’s budget would suspend the program. This means that no more eligible residents would get benefits. Instead, vacant slots would be eliminated until the program ceased to exist.

DC Council Cuts TANF Benefits, Approves Full Cut-Offs

Our lawmakers on the DC Council had decided to wrap up lawmaking for the year on December 21. They had a long agenda and, with Christmas fast approaching, probably shopping to finish up, parties to get to, etc.

So they decided to vote on a revised Budget Support Act* that they’d seen for the first time less than a day before. Decided not to worry that they wouldn’t have a second chance to vote, since Council Chairman Vincent Gray had introduced it as emergency legislation.

Gray had obviously had second thoughts about the impending cuts in cash benefit to families in the District’s Temporary Assistance for Needy Families program. Also third thoughts, since the final TANF provisions were significantly different from those I’d seen in a version of the substitute BSA circulated several days before.

For poor families dependent on TANF, there’s some tentative good news about cash benefits. Also some news that very ominous — both about cash benefits directly and about sanctions that will henceforward put families at risk of no benefits at all.

Cash Benefits

As I earlier wrote, the Council voted in early December to phase out benefits for TANF families who’d been in the program for a total of more than five years. This would have meant a 20% cut each year until 2015, when benefits would have been zeroed out.

The final version of the BSA imposes a 20% reduction on these families’ benefits after February 2011, but specifies no further reductions. In other words, it reverts to Mayor Fenty’s budget gap closing proposal.

However, the final BSA allows the mayor to adjust the level of TANF assistance payments through the rulemaking process. It thus opens the door to further benefits reductions.

We’ve got some evidence that Gray has his eye on them. The prior draft of his substitute BSA imposed an across-the-board 12% reduction. For a family of three, this would have meant a maximum of $377 a month — less than 25% of the federal poverty line.

Councilmembers got wind of this, thanks to some swift and effective advocacy. Gray apparently got enough pushback to opt for a strategic retreat. But I think it’s prudent to view further benefits reductions as dormant, not dead.

Sanctions

The final BSA apparently authorizes full family sanctions, i.e., termination of all cash assistance when a participating parent fails to comply with some program requirement.

I say “apparently” because the relevant provision doesn’t expressly authorize full family sanctions. But Chairman Gray referred to them in summarizing the BSA changes, and no one else on the Council piped up to challenge him.

As some of you may recall, Mayor Fenty’s mid-2009 budget gap closing proposal included full family sanctions. The Council rejected them — and wisely.

An Urban Institute study found that many District TANF recipients who’d been sanctioned faced serious challenges that might hinder not only their ability to comply with the work requirements, but even to understand them. Studies of TANF participants in other jurisdictions have raised similar concerns.

Yet the Council has decided to let the Department of Human Services move forward with a three-phase sanctions plan, ending in a total benefits cut-off for any failure to “participate [in] or complete an Individual Responsibility Plan,” i.e., the program of activities the participant is supposed to follow.

The final BSA directs the mayor to submit proposed sanctions policy rules to the Council by April 1. They’ll become effective 45 business days later unless the Council officials disapproves them.

But DHS has until September 30 to fully implement its TANF program reform plan. It can thus begin imposing full family sanctions before it has improved assessments, referral processes, training or other services.

Does it make any sense to punish recipients based on their failure to comply with an Individual Responsibility Plan that may be egregiously inappropriate? Because they haven’t received the services they’d need to comply?

What’s the big rush here anyway?

We know that DHS and some Councilmembers are very concerned about the high percentage of District TANF families who’ve been in the program for more than five years — close to 45%, according to recent testimony by DHS Director Clarence Carter.

How many of them could “graduate” if they’d just buckle down to their required job preparation and/or search activities is an open question. Full family sanctions supporters imply the answer is a lot of them. They just need a greater incentive than the partial sanctions already used.

During the Council’s discussion of the BSA, Chairman Gray said that we “need to encourage people to go to work,” implying that harsher sanctions will do that. But he also linked the new sanctions provision to his decision to, at least temporarily, limit the benefit reduction for long-term participants.

Councilmember Marion Barry, who supported the sanctions provision, noted that the existing appeals process will probably delay completion of the 20% reductions until the end of next year. In other words, not much by way of immediate savings from them.

But when Mayor Fenty proposed the reductions, they were supposed to contribute $4.6 million to closing the budget gap.

That could explain the rush.

As Legal Momentum recently reported, full family sanctions have contributed to large TANF caseload reductions. And states have financial incentives to impose them rather than rely on partial sanctions that preserve assistance for the children in a family.

With full family sanctions, states can avert penalties for failing to meet the federal work participation standard — something the District has struggled with. They can also free up funds for a variety of programs and services available to non-TANF families, e.g., child care, early childhood education.

So is the Council really hoping to bring a lot more families into compliance? Or is it banking on the savings DHS will realize by getting jobless families out of the TANF program?

Could it be hoping to mitigate budget constraints by having additional TANF funds for programs more politically popular than “welfare?”

* The Budget Support Act is one of two pieces of legislation needed to enact or make changes in the District’s budget. It makes whatever changes in existing legislation are necessary for the executive branch to carry out the spending directions in the Budget Request Act, i.e., the actual budget. Like most District legislation, it ordinarily must be passed by the Council twice.

DC Council Blocks Benefit Cutoffs For TANF Families

The City Council took its next-to-final action on the District’s Fiscal Year 2010 budget last Friday. It went along with a lot, though not all, of what Mayor Fenty had proposed. But it choked on his proposal to impose harsher sanctions on families in the TANF (Temporary Assistance for Needy Families) program. And a good thing too.

As I’ve written before, the Mayor’s proposed budget included plans to reduce TANF benefits by 50% when the adult recipient had been subject to lesser sanctions and still wasn’t meeting the program’s work requirements. If the adult still didn’t comply, all benefits to the family would have been cut off–even the funds to support the children.

The City Council struck these proposals from the legislation. However, this doesn’t mean that the Income Maintenance Administration, which administers the District’s TANF program, has no tools to encourage compliance.

It’s perfectly free to enforce its existing progressive sanctions rules. These allow the agency to reduce benefits so that they cover only the children in the family and for successively longer periods each time the adult fails to comply with the work requirements. If the money’s there, IMA can provide the proposed bonuses for full compliance too.

Unfortunately, the Council left intact the Mayor’s proposals to make eligibility for TANF contingent on an applicant’s completing an orientation and an assessment.

Some states have used requirements like these to discourage enrollment. That could happen here too. Recall that federal rules give states incentives to reduce their caseloads. At the very least, the requirements could delay delivery of urgently-needed help.

The City Council will take a final vote on the budget legislation in September. It would be well-advised to strike the new eligibility requirements. Let IMA first show that it can ensure all TANF applicants timely, appropriate orientation sessions and timely assessments that accurately identify “skills, prior work experience, employability, and barriers to employment.”

Then IMA should explain why eligibility should hinge on anything more than the criteria it’s been using. What does it hope to gain from creating more hoops for poor people to jump through before they’re even admitted to the program?

DC Will Cut Off Benefits To TANF Families

When I posted my summary of the Mayor’s proposals for TANF (Temporary Assistance for Needy Families), I wasn’t sure they included full family sanctions.

The language of the proposals left the door open for drastic benefits reductions, rather than total cutoffs. More importantly, the City Administrator assured DC Councilmembers–and all of us who were watching the budget hearing–that the proposals “in no way would…eliminate benefits for families.”

I’ve since learned that the Income Maintenance Administration, which administers TANF, does indeed intend to impose full family sanctions, though not before fall 2011. How many families might be affected remains to be determined.

With full family sanctions more than a year away, there’s time for the Council to take a careful look at who is being sanctioned and what actions have been taken to identify and resolve problems that may be hindering compliance.

This could–and I think should–be part of a broader examination of whether IMA has delivered on its promise to to improve “capacity building and services/supports that help move individuals beyond welfare capacity.”