Transcript The William P. Hobby Policy Conference

THE FACTS
THE FUTURE
The William P. Hobby Policy
Conference
Federal Budget and Policy
Issues
Eva DeLuna Castro, [email protected]
Budget Analyst, CPPP
May 14, 2004
THE FACTS
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The William P. Hobby Policy Conference
PRESENTATION OUTLINE:
 The “Big Picture” of federal spending in
Texas
 More specific information on major federal
sources of HHS and education spending in
Texas: funding formulas, match
requirements, beneficiaries and benefits in
Texas, changes being proposed by White
House or Congress
 Additional resources
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THE FACTS
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The William P. Hobby Policy Conference
Federal Spending in Texas: $123 billion in 2002
Non-defense federal
agencies - 15%
EITC - 2%
Agricultural
Commodity
Payments - 1%
Medicaid - 7%
Medicare
12%
UI Benefits 2%
Highway Aid 2%
Defense/Veterans
20%
Other
Food Stamps 1%
All Other
14%
Social Security and
SSI - 23%
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THE FACTS
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The William P. Hobby Policy Conference
Top 10 Federal Funding Streams in State Budget, 2002
Billion $-
$4.0
$2.0
Medicaid
$8.0
$10.0
$8.7
Highway Planning/Construction
$2.4
Title I Education Grants
$0.711
School Lunch Program
$0.699
Special Education (State Grants)
$0.608
Temp. Assistance for Needy Families
$0.583
CHIP
$0.536
Child Care and Dev. Block Grant
$0.406
WIC Nutrition Program
$0.382
Child Care Mandatory & Matching
$0.363
All other
$6.0
$2.5
NOTE: The Food Stamp program brought more than $1.5 billion in federal
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funds to Texas in 2002, but the benefits are not appropriated through the state
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Federal “Superwaiver” Proposal:
• House version would let states get 5-year
waivers to combine 2 or more of the listed
programs
Temporary Assistance for Needy Families
Food Stamps
Social Services Block Grant (SSBG)
million
Title I of Workforce Investment Act
Wagner-Peyser Act
(Employment Services)
million
Adult Education/Family Literacy
Child Care Development Block Grant
million
Housing Programs (except Section 8 and some Section 7)
million?
Annual Funding for
Texas, Fiscal 2002
$583 million
$1.5 billion
$150
$289 million
$ 54
$ 41 million
$406
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$348
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Medicaid (Title XIX)
 Open-ended entitlement with state match (for most
of 2004, match ratio is 36.83% state, 63.17%
federal). Federal Medicaid spending rose by only
18.1% in TX from 1996-2001, vs. 34.7%
nationwide. (Texas rank in federal Medicaid
growth: 46th)
 Medicaid funds health care for low-income people,
as well as some elderly & persons with disabilities.
States decide (after federal minimum requirements
are met) who’s eligible, what benefits they get, and
what providers are paid. In March 2004, 2.6 million
Texans were on Medicaid; 1.7 million were under
19.
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THE FACTS
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Texas Medicaid Beneficiaries and Expenditures,
Federal Fiscal Year 2001
2%
100%
Other
22%
80%
57%
60%
Children
Parents &
Pregnant
Women
11%
28%
40%
17%
Aged
20%
13%
13%
37%
Disabled/Blind
0%
Clients
Expenditures
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Total expenditures ($9.7 billion, all-funds) in chart exclude administration, DSH payments, survey and
certification activities, and Medicare premiums paid to federal govt. for Medicare/Medicaid dual
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What Medicaid Will Buy for Texans, 2004-05
Acute Care,
$17.0 b
Other, $0.3 b
Long-Term
Care, $6.7 b
Prescription
Drugs, $3.3 b
Long-Term
Care - Mental
Retardation,
$2.0 b
Biennial Total, All Funds:
$29.3 billion
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THE FACTS
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FEDERAL PROPOSALS:
 Analysis by Center on Budget and Policy Priorities:
The White House first proposed a Medicaid “block
grant” under the guise of fiscal relief to states in mid2003. States would receive extra federal Medicaid
funds from 2004 to 2010, in exchange for converting
their Medicaid and CHIP programs into capped block
grants.
 But the “extra” would have to be repaid from 2011 to
2013, through lower match rates. And states, not
federal government, would have to pay for any
unanticipated cost increases or improvements in
health coverage.
 Under this proposal, federal Medicaid spending
nationwide would have been $8.3 billion lower by
fiscal 2013 than under current law.
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THE FACTS
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Title I Education Grants
 Formula grant to states; no match requirement.
States then distribute money to school districts
based on the number of children from lowincome families.
 In the 2002-03 school year, 2.2 million kids (52%
of students) in Texas schools are “economically
disadvantaged.” Title I funds are meant to
“improve the teaching and learning of children
failing, or most at-risk of failing, to meet
challenging state academic standards.”
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THE FACTS
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FEDERAL PROPOSALS:
 Title I originally authorized by Elementary &
Secondary Education Act of 1965, now known as
the “No Child Left Behind” Act, signed into law
January 2002. NCLB has new requirements for
testing and other accountability (similar to Texas
TAKS). President’s 2005 proposal has $105
million more in Title I funding for Texas (a 9.5%
increase compared to 2004).
 Education advocacy groups are working to “fix”
NCLB by calling for full funding of Title I; more
support for teacher quality programs; less
emphasis on testing, and more priority placed on
improving low-performing schools (instead of
vouchers).
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THE FACTS
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School Lunch Program:
 Formula grant to states to reimburse schools (on
a per-meal basis) serving lunches to eligible
children. Lunches must meet nutritional
requirements set by U.S. Secretary of
Agriculture.
 Children from households with incomes up to
130% of poverty are eligible for free lunches in
participating schools. Eligibility for reduced-price
lunches ranges from 130% to 185% of the
poverty line. In 2004, an average 2.5 million
lunches* will be served in Texas schools every
day
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(*Total is for all lunches served, not just free or reduced-price lunches).
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FEDERAL PROPOSALS
 House: on March 30, passed the “Child Nutrition
Improvement and Integrity Act” (HR 3873) to
reauthorize the School Lunch & Breakfast
Programs, Child & Adult Care Food Program,
After-School Snacks, Summer Food Service
Program, and WIC.
 Senate: hope is that a bill will be completed soon
so that programs will be reauthorized this year
(continuing resolution already passed for 3
provisions that expired March 31)
 Key Issues: reaching more children who are
already eligible; expanding eligibility; improving
integrity in application process; reducing child
obesity
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Special Education
 Formula grant to states. No match
requirement, but as in the case of Title I,
federal law requires that money be spent
to supplement, not supplant, state efforts
to educate the children eligible for
services.
 In the 2002-03 school year, almost
491,300 Texas students (12% of K-12
enrollment) were in special education
classes.
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THE FACTS
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FEDERAL PROPOSALS: Special Education
funding is authorized by Individuals with
Disabilities Education Act (IDEA of 1975, most
recently reauthorized in 1997). Expired in
September 2002, with continued appropriations
by Congress. President’s budget would mean an
11% increase for Texas in 2005.
 House: Passed HR 1350 on April 30, 2003. Main
sticking point : does not fully fund federal part of
program (40%).
 Senate: In June 2003, S 1248 passed
committee, but full Senate has not yet acted on
the bill. Senate version also lacks full federal
funding; proposes change in disciplinary actions
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THE FACTS
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The William P. Hobby Policy Conference
Temporary Assistance for Needy
Families
 Block grant and supplemental payments to states;
bonuses awarded for performance; state
maintenance of effort required (tied to pre-TANF
levels of spending on child welfare — for Texas,
$251 million/year).
Purpose of grant is to “increase state flexibility in operating programs
designed to (1) assist needy families so that children may live in their
homes or those of relatives; (2) end dependence of needy parents on
governmental benefits; (3) reduce out-of-wedlock pregnancies, or (4)
encourage the formation and maintenance of two-parent families.”
 Texas’ major uses of TANF: Cash assistance,
foster care, job services for welfare recipients
(CHOICES), child protective services, eligibility
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THE FACTS
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TANF Federal Funds in the
Texas State Budget, 2004-05:
$1.184 billion total
Texas Education
Agency
1%
Protective &
Regulatory
Services
38%
Workforce
Commission
15%
MHMR
0%
Other
13%
Dept. of Human
Services
34%
Dept. of Health
4%
Early Childhood
Intervention
3%
Employee Benefits
5%
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THE FACTS
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The William P. Hobby Policy Conference
FEDERAL PROPOSALS
 President: Priorities include family formation
 House: HR 4 passed the House in 2003. On
March 30, 2004, approved another extension
through June 2004
 Senate: Multi-year reauthorization is stuck.
Key issue: new money for child care (Senate wants
$6 billion more over 5 years, versus House’s $1
billion. Both House & Senate would keep basic
funding at $16.5 B/year through 2008, continue
supplemental grants through 2007, and allow
annual transfers of up to 50% to child care, 10%
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THE FACTS
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CHIP (Children’s Health Insurance Program)
 Also known as SCHIP or Title XXI; passed by
Congress in 1997. National and state-level
funding is formula-determined; funds unused
after 3 years can be reallocated. Match is an
enhancement of Medicaid match rate (in fiscal
2004, ratio is 27.85% state, 72.15% federal).
CHIP is NOT an entitlement.
 Texas began enrolling children in CHIP in May
2000. Covers most Medicaid-ineligible children
under age 19, in families with incomes up to
200% of poverty. In April 2004, 377,051 children
were in CHIP, down from 508,176 in April 2003 (a
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THE FACTS
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FEDERAL PROPOSALS:
 White House would have included CHIP in
Medicaid block grant to states.
 Congress considering various changes: some
would make adults in working-poor families
eligible for coverage; others would expand
income eligibility to 300% of poverty, or to
certain legal immigrant children. States also
using Sec. 1115 demonstration projects or state
CHIP plan amendments to expand coverage for
children and adults.
 CHIP has to be reauthorized in 2007
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THE FACTS
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Child Care and Development Block
Grant
 Has three components: Discretionary and
Mandatory are 100% federal, with levels
set by Congress; Matching component
requires state maintenance of effort and
state or local match (at the same match
rate as for Medicaid)
 In Texas, CCDBG funds low-income child
care subsidies (TWC and local workforce
boards) and child care regulation (now at
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THE FACTS
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The William P. Hobby Policy Conference
FEDERAL PROPOSALS:
 President’s proposed budget for CCDBG
in fiscal 2005 has only $1.2 million in new
funding for Texas (a 0.6% increase
compared to 2004). Proposal would also
create a 9-state pilot program coordinating
Head Start, federal child care funds, and
preschool programs.
 House/Senate: reauthorization of child
care funds is part of the same legislation
that would reauthorize TANF (see earlier
slide).
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THE FACTS
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WIC
 No match for WIC; 30% state match for related
Farmers Market program. Congress sets annual
funding levels; USDA formula determines state
funding.
 WIC benefits are for low-income women who are
pregnant, breastfeeding, or postpartum, and
infants/children up to age 5 who are at risk of poor
nutrition. WIC provides nutritious food
supplements, nutrition education, and referrals to
health care. In 2004, an estimated 837,800
women and children will get WIC food
supplements in Texas; almost 4.6 million will get
nutrition education and counseling.
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THE FACTS
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The William P. Hobby Policy Conference
FEDERAL PROPOSALS
 President’s proposed budget for fiscal
2005 has almost $19 million more for WIC
in Texas (a 4.3% increase compared to
2004).
 House/Senate: WIC is part of
reauthorization of other children’s
nutrition/meals programs (see earlier slide
on School Lunch program)
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THE FACTS
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ROOM FOR IMPROVEMENT:
 Census Bureau’s State Government
Finances, 2002: Texas relied on federal
funds for one-third of its general spending.
This is the 15th highest ranking among the
states.
 But according to the Tax Foundation, in
2002 Texas got only 92 cents worth of
federal spending for every $1.00 in federal
taxes paid by Texans (down from 93 cents
in 1992). National ranking in 2002: 36th
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THE FACTS
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Need more information on federal funds in the
Texas Budget?
 Legislative Budget Board:
http://www.lbb.state.tx.us/The_LBB/Access/Federal_Funds.ht
m ; Federal Funds Watch newsletter
 HHSC:
http://www.hhsc.state.tx.us/about_hhsc/finance/FedFunds/fs_f
unds.html (Annual Federal Funds Reports)
 Office of State-Federal Relations:
http://www.osfr.state.tx.us/ ; News From Washington
newsletter
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