1. www.cppp.org One Voice Pre-Legislative Forum Maximizing Federal Funds: The State Budget September 27, 2006 Eva DeLuna Castro, Senior Budget Analyst Center for Public Policy Priorities deluna.castro@cppp.org

2. www.cppp.org 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

3. www.cppp.org Texas and U.S. Poverty, 2004-05 TexasU.S. Poverty rate16.3%12.7% Total in poverty3.675 million37.0 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

4. www.cppp.org ACS 2005: Growth Continues, But Poverty Increases Even More Source: U.S. Census Bureau, 2005 American Community Survey

5. www.cppp.org ACS 2005: Child Poverty Increase is Especially Troubling Source: U.S. Census Bureau, 2005 American Community Survey

6. www.cppp.org Harris County Residents, 2005 3.6 million people total Poverty rates by ethnicity: 18% overall Hispanic: 26% African- American: 26% White/Other: 8% Source: U.S. Census Bureau, 2005 American Community Survey

7. www.cppp.org Harris County Residents by Age and Poverty, 2005 Poverty rates: 28.5% 25.5% 15.7% 8.9% 12.1% Source: U.S. Census Bureau, 2005 American Community Survey

8. www.cppp.org Harris County Adults by Education & Poverty Status, 2005 (Age 25+) Poverty rates: 27.4% 14.0% 9.2% 3.5% 3.6% Source: U.S. Census Bureau, 2005 American Community Survey

9. www.cppp.org Educational Enrollment of Harris County Residents, 2005 (Age 3+) Totals: 897,900 in public, 121,100 in private, 2.4 million not enrolled Source: U.S. Census Bureau, 2005 American Community Survey

10. www.cppp.org Texas $142 b $6,313 per capita Harris County $15.8 b $4,388 per capita Source: U.S. Census Bureau, Consolidated Federal Funds Reports Federal Spending in Harris County, 2004

11. www.cppp.org State Govt. Spending in Harris County, 2005 Source: Texas Comptroller of Public Accounts, County Expenditures

12. www.cppp.org State Govt. Spending of K-12 Federal Funds Source: Texas Comptroller of Public Accounts, County Expenditures

13. www.cppp.org State Govt. Spending, HHSC Federal Funds Source: Texas Comptroller of Public Accounts, County Expenditures

14. www.cppp.org State Govt. Spending, DADS Federal Funds Source: Texas Comptroller of Public Accounts, County Expenditures

15. www.cppp.org State Govt. Spending of Other HHS Federal Funds Source: Texas Comptroller of Public Accounts, County Expenditures

16. www.cppp.org State Govt. Spending of Federal Highway Funds Source: Texas Comptroller of Public Accounts, County Expenditures

17. www.cppp.org Higher Ed: Minimal Federal Funds in State Budget Source: Texas Comptroller of Public Accounts, County Expenditures

18. www.cppp.org Prison System Doesn’t Add Much in Federal Funds Either Source: Texas Comptroller of Public Accounts, County Expenditures

19. www.cppp.org Workforce System Almost Entirely Federally Funded Source: Texas Comptroller of Public Accounts, County Expenditures

20. www.cppp.org Other State Govt. Spending of Federal Funds, 2005 Source: Texas Comptroller of Public Accounts, County Expenditures

21. www.cppp.org 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 Source: Texas Comptroller of Public Accounts, County Expenditures

22. www.cppp.org 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

23. www.cppp.org Recent Changes, Food Stamp Enrollment in Harris County Source: Texas Health and Human Services Commission

24. www.cppp.org Harris County Residents by Age and Poverty, 2005 Poverty rates: 28.5% 25.5% 15.7% 8.9% 12.1% Source: U.S. Census Bureau, 2005 American Community Survey

25. www.cppp.org Recent Changes, TANF Enrollment in Harris County Source: Texas Health and Human Services Commission

26. www.cppp.org 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.

27. www.cppp.org Harris County Medicaid & CHIP Enrollment (August 2005-August 2006) Source: Texas Health and Human Services Commission.

28. www.cppp.org 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.

29. www.cppp.org Digging a Hole In billion $2008-092010-11Total HB 3 (business tax) 6.87.714.5 HB 4 (used cars)0.1 0.2 HB 5 (cigarettes) 1.4 1.3 2.7 TOTAL REVENUE8.39.117.4 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

30. www.cppp.org State “Own Source” Spending/Revenue “Own Source” = not counting federal funds. “Needs” does not include more than $3 billion in GR funding requested for improvements or restorations.

31. www.cppp.org 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.

32. www.cppp.org 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.

33. www.cppp.org 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.

34. www.cppp.org 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.

35. www.cppp.org 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.

36. www.cppp.org Federal Reauthorization Needed HIV 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.

37. www.cppp.org More Information Legislative 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.

38. www.cppp.org Use of This Presentation The Center for Public Policy Priorities encourages you to reproduce and distribute these slides, which were developed for use in making public presentations. If you reproduce these slides, please give appropriate credit to CPPP. The data presented here may become outdated. For the most recent information or to sign up for our free E-Mail Updates, visit www.cppp.org.www.cppp.org Center for Public Policy Priorities 900 Lydia Street Austin, TX 78702 Phone 512-320-0222 Fax 512-320-0227