Note: The Independen« INDEPENDENCE sas PAPER Issue Paper #9-89 August 1996 WHAT COUNTIES AND COMPANIES CAN DO ABOUT WELFARE DEPENDENCY By William W. Graham INDEPENDENCE INSTITUTE 14142 DENVER WEST PARKWAY, SUITE 185 GOLDEN, COLORADO 80401 (303) 279-6536 FAX (303) 279-4176 ished for e tional purposes only, and the author Nothing writen here i e views of the Independ: attempt to influence aAugust 15, 1989 WHAT COUNTIES AND COMPANIES CAN DO ABOUT WELFARE DEPENDENCY By William W. Graham Introduction by the Editors The human cost and financial burden of geometrically increasing welfare rolls are unacceptable for Colorado. Nore welfare clients must be helped to move toward self-sufficiency, faster, to relieve the waste of their own lives and the drain on their fellow citizens productivity. Most evidence suggests that struc- tures and incentives, not benefit levels, are the key. Policy options are not confined to federal action. Indeed, such action may currently be making the problem worse: a January 1989 study by the Congressional Budget Office suggests that last year's "reform" law will yield a net increase of 30,000 fami- lies on welfare by 1993, instead of the promised decrease of 50,000. But effective reforms are within reach of elected and appointed offi- cials at the state and even the county level. One crucial objective must be to forge a stronger link between eligibility for public assistance and self-help through employment with more private participation than most PICs are currently achieving. Independence Institute asked Willian Graham, an experienced state and local policy analyst, to summarize what is being done and what could be done at county seats and in the boardrooms, without waiting for Washington. Here is his report. In Brief Welfare caseloads in several metro Denver counties are grow ing at a rate that could double them in four years. Work is heralded as the answer, but... TPA employment programs in one large county appear to be placing fewer than 3% of wel- fare clients, perhaps not even 1% permanent iy. By contrast, in the only Colo- rado county with a tough work- fare requirement, caseloads are declining slightly. But client mobility and inattention to matching the person and the job cast doubt on that program's lasting value. Self-sufficiency rhetoric is being heard from state and fed- eral policymakers, but its real effect in breaking the welfare cycle remains to be seen. Counties, with local business involvement, should begin mov- ing on their own to unify the uncoordinated agency triad of social services, job services, and employment/training divi- sions. While not the whole solution, this should improve the job placement and retention rate for those welfare clients who are most suited for a quick return to self-sufficiency.Sharp Growth Rate of Welfare Caseloads AFDC caseloads continue to grow in Colorado unrelated to population growth and not directly related to economic conditions. Total statewide assistance pay- ments are now in excess of $10 million monthly, with a caseload of 33,000 and climbing. Just two years earlier the caseload was 27,000. In the tri-county metropolitan area of Adams, Arapahoe, and Jefferson Counties the following table illustrates the growth. Cases_-- Average Monthly Cumulative Average Monthly Count; Fess Hrer Fras “increase. FY 88 Assistance Adams 2755 2948 3305 20% 1,939,000 Arapahoe 1299 1588 1748 35% 520,000 Jefferson 127 1474 1693 40% 518,000 ‘Although the data are insufficient to establish trends, if growth were to continue at the current level the caseloads in the three counties would double every four years, not a happy prospect from any perspective. Funding for the assistance payments is 50% federal, 30% state, and 20% county funds. Note that the costs shown above do not include other benefits received such as Medicaid, Food Stamps, and Low Income Energy Assistance Program for which recipients are also eligible. It should be understood that becoming an AFDC recipient is an entitlement provided an applicant meets the eligibility requirements. For this reason the program is not subject to straightforward financial management as are some other social services programs. Under present law the costs will increase as more people become eligible and choose this path rather than the available alternatives. Since all comers must be served, no ceiling can be placed on total expenditures. However, changes are already in the works to improve upon this failed system ~~ a system that is letting down not only the taxpayer, but also its intended beneficiaries. We'll look at three areas of change: JIPA training programs, the Weld County work requirement, and reforms in state and federal welfare policies. Weak Record of JTPA in Placing Welfare Clients The Job Training Partnership Act of 1982 marshals federal, state and local sources to help prepare economical ly disadvantaged and long-term unenplayed people to become productive labor force members. The act provides for the for- mation of Private Industry Councils (PICs).