 |
Home | Search | Browse | About IPO | Staff | Links |
|
Home | Search | Browse | About IPO | Staff | Links |
|
By DIANE ROSS The flow of THE DRAMA now playing in Washington — the shifting of the roles of the federal and state governments may affect the delivery of the so-called "human services" more than any other government service. In Illinois there are nine executive branch agencies under the jurisdiction of Gov. James R. Thompson that are charged with the delivery of the major human services: The Illinois Departments of Aging (DOA), Children and Family Services (DCFS), Commerce and Community Affairs (DCCA), Corrections (DOC), Mental Health and Developmental Disabilities (DMHDD), Public Aid (DPA), Public Health (DPH), Rehabilitation Services (DORS) and Veterans Affairs (DVA), The broad umbrella of human services also covers the Illinois State Board of Education (ISBE) and the Illinois Board of Higher Education (IBHE). Of the nine human services there are the "big four" in terms of the large amounts of federal aid they annually "generate" for Illinois; they are DPA, DMHDD, DORS and DCFS. Together they will be responsible for more than half of the $3 billion Illinois expects to receive in federal aid in state fiscal 1983. It is DPA that will be the giant, generating $1.5 billion. But then public aid is, by far, the biggest and most expensive human service to deliver, since it involves Medical Assistance (MA with Medicaid the largest part), Income Assistance (IA) and Social Services (SS with Title XX being the key fundine term). (In contrast, the state's 14/May 1982/Illinois Issues two other most expensive programs will account for about $925 million in federal aid — elementary education will bring in about $500 million, and transportation about $425 million.) To date, the most significant change in the delivery of the human services to be brought about by the Reagan administration, at least in the area of federal funding, is the consolidation of some 63 categorical grants into nine block grants. Seven of the blocks took effect last October. They are grants for Alcohol and Drug Abuse and Mental Health Services, Community Development, Community Services, Low-Income Energy Assistance, Maternal and Child Health Services, Preventive Health and Health Services and Social Services. Of those, the block grant for alcohol, drugs and mental health is the responsibility of DMHDD; the social services block falls under the jurisdiction of DPA; and the energy assistance block, while administered by DCCA, affects DPA. The remaining two blocks, which will take effect this October, are for education and local public health. (It is not the shift to block grants, however, but the proposals to "swap" state and federal funding roles for major public aid programs that would have the most far-reaching effect on the delivery of human services. So far, those proposals have been all talk.) Federal aid for human services generally falls into two categories: grants and reimbursement. When the money is based on a formula, which gives a state a certain percentage of the national appropriation, the effect is a ceiling on the grant or reimbursement for a state. The process by which the agencies generate the federal aid is complicated, but compelling. With grants, the agencies make application; however, part of the federal aid the state receives depends on how well the agencies line up the necessary state and/or local aid for the so-called "match." When such grant money arrives, the agencies deposit it in what their bookkeepers call a state "federal trust fund" account, from which only the generating agency may draw. This could be called "direct federal aid," since only the agency which generates it can spend it. With reimbursement, however, the process is far different, since almost all of the federal aid the state receives depends on how well the agencies administer the federal law under which the reimbursement is authorized. When such reimbursement money arrives, the agency deposits it in the state treasury (in Illinois, the general revenue funds) from which, theoretically, all agencies may draw. This could be called "indirect federal aid," since the agency which generates does not necessarily spend it. When formulas set ceilings on federal aid, agencies are generally forced to take what they get (many formulas are based on state population). But politics always plays a part. A state can always lobby for a bigger piece of the federal pie, provided its caseloads support the argument — or the governor and the president belong to the same party. It will be interesting to see how much leverage Thompson has with Reagan under the new federal block grants for human services. Negotiations between the last two Republicans, former Gov. Richard B. Ogilvie and former President Richard M. Nixon, produced more federal aid for human services in Illinois than ever before. (For a behind-the-scenes-look at how Illinois stuck its thumb in the federal pie 10 years ago and pulled out the public aid plum, see Martha Derthrick's series in Illinois Issues, "Public aid funding: How Illinois pried open the federal coffers," April 1977, p. 20; "Public aid funding: HEW memorandum turned federal policy upside down," May 1977, p. 18; and "Public aid funding: Shaping federal policy," June 1977, p. 23.) Another complicated aspect of federal funding is the calendar. The federal fiscal year runs from October to October while most state fiscal years run from July to July. That means a congressional appropriation for federal fiscal 1983 (FFY 1983) will arrive in Illinois during the last three quarters of state fiscal 1983 (SFY 1983) and the first quarter of SFY 1984. But the computations involved in figuring the federal aid for any given state fiscal year are nothing compared to the frustration of second guessing congressional appropriations. The General Assembly is passing appropriations without knowing what Congress has appropriated for the current federal fiscal year. That shouldn't bother the General Assembly. Local government and school boards in Illinois have been planning budgets for years before knowing what the General Assembly has passed. Public Aid's federal aid THE "NEXUS" of federal aid to the state's human services is the Illinois Department of Public Aid (DPA). DPA will bring in $1,401 billion in state fiscal 1983 — almost all of the $1,667 billion the state's big four agencies will generate next year. Why? Fully 84 percent of federal aid to the big four comes indirectly, as reimbursement that doesn't show up on the agencies' books. And reimbursement is what DPA brings in best. Of the $1,401 billion DPA will bring in, $1,327 billion will come in as reimbursement. Both of its major services are eligible: Income Assistance (IA) and Medical Assistance (MA, also known as Medicaid). Even DPA's minor service, Social Services (SS, also referred to as Title XX), is eligible. Medicaid alone, by far the largest of the three programs, generates more than $800 million a year. In contrast, all the reimbursement generated by DMHDD, DORS and DCFS together will run about $76 million. These other three agencies offer some of the same services DPA does, generally Medicaid and Title XX programs, but their caseloads, even in combination, are far smaller than DPA's. Medicaid for DMHDD, DORS and DCFS together generates less than $15 million a year. All reimbursement to the. state's big four human service agencies appears on DPA's federal aid ledger, however. Most of it is awarded by the U.S. Department of Health and Human Services (USHHS) under the various titles of the U.S. Social Security Act. USHHS gives DPA the sole responsibility in Illinois for filing the claims and collecting the reimbursement. All agencies whose services are eligible file claims with DPA which forwards them to USHHS. When the reimbursement arrives, DPA deposits it in the state's general revenue funds account. That's why it doesn't show up on the generating agencies' books. Direct federal aid, the grant money that does show up separately for each agency, is another, much briefer story; it accounts for only 16 percent of all federal aid to the big four. DPA, DMHDD, DORS AND DCFS together May1982/ Illinois Issues/15 will generate about $263 million in grants in SFY 1983. And again, it is DPA that will bring in the most money: $73 million. DORS will draw $60 million, DMHDD $31 million and DCFS $26 million. Those amounts will show up separately for each agency, and these grant monies are deposited in agency federal trust fund accounts, from which only the generating agency may spend. To explain DPA's indirect federal aid — its $1,327 billion in reimbursement — you need an alphabet soup metaphor (also see table). Fully 96 percent of DPA's indirect federal aid comes as three big chunks of reimbursement: Medicaid, Aid to Families with Dependent Children (AFDC, under IA) and Title XX. The remaining 5 percent is reimbursement for administering the Food Stamp program (under IA); awarding IA and MA benefits to refugees, including orphans (under IA via DCFS); administering the enforcement of child support laws (AFDC under IA) and awarding substitute care benefits to clients whose children need foster care or adoption (under IA via DCFS). In SFY 1983, DPA expects its indirect federal aid to rise $29 million, or 2.2 percent, reaching $1,327 billion. Here's the rundown on the three big chunks. MA (Medicaid) Reimbursement at 50 This federal Medicaid money is the meat of the soup. DPA expects the maximum, $824 million, in SFY 1983, about the same amount as in SFY 1982. Of that, fully $810 million will represent claims filed by DPA, the remaining $14 million, claims by DMHDD, DORS, DCFS and other agencies. Effective last October, Congress lowered the Medicaid reimbursement rate to 48.5 percent for claims exceeding the $824 million ceiling, but, to date, that is the only action the feds have taken on Medicaid. DPA says that shouldn't mean a cut in Illinois reimbursement since the agency doesn't expect Illinois claims to exceed the ceiling in the near future. Each of the Illinois big four purchases the medical care for its clients from providers in the private sector. Most of this federal Medicaid money, then, will be spent as grants to reimburse hospitals, doctors, clinics, etc. DPA will spend only $35 million of its $810 million to administer its MA program. AFDC Reimbursement at 50 percent of costs; no ceiling; USHHS awards under Title IV-A of the US Social Security Act. DPA alone generates, under its IA program. 
If Medicaid is the meat, AFDC is the potatoes. DPA expects a 10.5 percent increase in SFY 1983, from $391 million to $432 million, because of a corresponding increase in the AFDC caseload. Income Assistance amounts to cash benefits for DPA clients who are eligible for General Assistance (GA), Aid to Families with Dependent Children (AFDC) or Aid to the Aged, Blind or Disabled (AABD). Unlike MA, IA is a service that DPA itself can deliver. That means most of this federal AFDC money will be spent, literally, on checks mailed to clients. Only $46 million of DPA's AFDC reimbursement will be spent to administer the program. SS (Title XX) Formerly a series of categorical grants, but as of last October lumped into the new federal Social Services block grant; formula reimbursement gives Illinois 5 percent of the national SS appropriation, setting the Illinois ceiling at $120 million a year; USHHS awards under Title XX of the U.S. Social Security Act. DPA, DMHDD, DORS and DCFS each generate to some extent; DPA offers under its SS program. Regardless of the switch from categoricals to block, the Title XX programs remain the single most complex source of federal funding for the human services. The Title XX money constitutes the funding for all the major federal programs that fall under the deceptively simple classification of social services — programs far too numerous to delineate. For example, one of the largest and most widely known is day care. But in Illinois, DPA alone offers half a dozen different kinds based on half a dozen different caseloads. And Title XX money may fund parts of any or all of them. The metaphor changes here. It's now a problem of explaining roles. Weaving all these Title XX threads together produces an incredibly intricate pattern in the fabric of federal aid to the states. Running through the cloth, however, are a couple of strands whose bright color clearly sets them apart. They represent federal funding designed — and functioning — as an incentive for local agencies to take the initiative in delivering social services. One kind of federal funding is called "local initiative," also known as the "donated funds initiative" (available to all the big-four agencies). The other is "local effort day care" funding (available only to DCFS). These two are all the more colorful considering the neutral shade of Title XX. State agencies generally do not deliver social services; they buy them at the local level, usually from the private sector. So state agencies spend most of this Title XX money as grants to reimburse the local private providers, which illustrates the government subsidization of the private sector. While the federal Title XX money is the third largest part of all federal aid to Illinois' big-four human service agencies, it is only 7.2 percent of the total. As with Medicaid, USHHS names DPA as the lead agency. 16/May 1982/Illinois Issues DPA expects to get the maximum $120 million in SFY 1983, for Title XX funds, the same as the current fiscal year. To date, Federal action on Title XX has been to lump the categoricals into the block. But DPA full expects Congress to cut the national appropriation by 20 percent effective this October. That would appear to cut 25 percent off the top of Illinois Title XX money (5 percent of the national), meaning a loss of about $30 million, mostly in SFY 1983. But Illinois' claims have exceeded the ceiling for so long, and by so much — running $180 million beyond in SFY 1982 — that DPA hopes Congress won't cut Illinois, at least in SFY 1983. The Title XX money is not a large source of federal funding for DPA; it runs about $26 million a year, including about $10 million for administration. That leaves about $62 million in reimbursement for DMHDD, DORS and DCFS together. It's hard to break down the reimbursement for those three agencies, since $88 million of the total $120 million in Title XX money is indirect aid, deposited in the state's general revenue account. That leaves only $32 million in direct aid, grants that appear on agency accounts. Those are the bright local threads woven into the Title XX fabric. About $88 million of the $120 million bolt represents reimbursement for the social services that state agencies purchase. The remaining $32 million, representing matching grants for the social services that local agencies deliver, is a broad stripe in the Title XX fabric. This is direct federal aid that shows up in agency federal trust fund accounts. About half of this matching grant money goes into the Local Initiative Fund, from which DPA draws on behalf of the big four; the money reimburses local private providers. The other half goes into the Local Effort Day Care Fund, from which only DCFS draws for five day care centers in Chicago, Evanston, Rockford, Mt. Vernon and Carbondale. To receive either kind of this funding, a local donor agency (often private) contributes the 25 percent share. DPA documents it as the "state" share. (This amounts to a so-called "hard match," that is, cash in advance.) When DPA receives the 75 percent federal share, however, all 100 percent of the grant goes to the local provider agency (often public) — the one delivering the service. To use a day care example, the Chicago Model Cities Day Care Center gets the grant, but the United Way or some other backer makes the contribution. In sum, it works like this: Local Initiative (or donated funds initiative) Matching grant; Ms cover 75 percent of costs if "state" covers 25 percent; no ceiling; I SIIIIS awards under Title XX of the U.S. Social Security Act. DPA expects the 75 percent federal share for local initiative to drop a bit in SFY 1983, to about $16 million. Congress eliminated a number of kinds of social services that had been eligible, effective last October, cutting the national appropriation. That means the "state" share can also drop, but that leaves some services unfunded. Again, it's hard to tell how significant this federal Local Initiative money is, since DPA cannot link the grants exactly to the agencies. Local Effort Day Care Matching grant; feds cover 75 percent if the "stale" covers 25 percent; no ceiling; USHHS awards under Title XX of the U.S. Social Security Act. DCFS expects to get (from DPA) $15.6 million in local effort day care in SFY 1983, about the same amount as in SFY 1982. This is, in fact, the largest sum on DCFS' federal aid ledger, about five times that of the next largest, a formula grant for child abuse and adoption. The metaphorical alphabet soup of DPA's federal reimbursement has more in it than the big chunks of meat and potatoes. That last 5 percent amounts to another $111 million, not much, but this human services porridge wouldn't hold together without it. Food Stamps Administrative Costs Only Reimbursement at 50 percent of costs; no ceiling; U.S. Department of Agriculture awards under the 1964 U.S. Food Stamp Act. This money covers only DPA's administration of the program, which serves its GA, AFDC and AABD clients under its IA program. This federal administration money is like salt; not only do the feds cover the cost of the stamps, they even cover half the cost of figuring out who gets them. The money backing the stamps, of course, never appears until grocers redeem them, but the dollars behind the administration of the program are real enough in the public aid budget — or they were. This Food Stamp administration money is the fourth largest sum on DPA's indirect federal aid ledger for the current state fiscal year. But DPA is braced for a 57.5 percent cut in SFY 1983, looking for reimbursement to drop from $37.6 to $16 million. Indo-Chinese and Reimbursement at 100 percent of IA and MA costs for these GA clients, 80-85 percent for AFDC and AABD clients; no ceiling; This is a relatively recent addition to the recipe, added only after states like Illinois insisted. Originally the feds reimbursed 100 percent of the cost of IA and MA benefits for these refugee clients. Effective last October Congress began to phase out this money as the influx of Indo-Chinese and Cubans abated. Within a few years most will be settled; those that still need public aid will have been absorbed into the regular caseload. By 1985 the feds will reimburse only 50 percent, what they normally pick up for IA and MA clients. In SFY 1983, however, DPA hopes for a slight increase in reimbursement for cash benefits for Indo-Chinese, from $23.6 to $24 million. The agency expects to lose 15.5 percent in reimbursement for the Cubans, however, from $7.1 to $6 million. The changes are tied to the caseloads. Reimbursement for care benefits isn't that high. Still, DPA expects a 25 percent cut in SFY 1983, losing $1 million from" the $4 million expected during the current fiscal year. Reimbursement for cash benefits, which does not show up on DPA books, goes as checks to clients. Reimbursement for care benefits, which appears under DPA's Special Purposes Trust Fund, flows back through DPA to local providers. Remember, though, that some of these refugees are orphans, and they are covered under a separate, but similar program. This federal money, a comparatively small sum, appears on the DCFS ledger. Technically, DPA purchases the care from DCFS, which in turn, buys it from the Catholic Social Services of Peoria, which provides 98 percent of the care. DPA deposits the reimbursement directly into DCFS' own Children and Family Services Refugee Assistance account. The federal orphan refugee money goes on to Catholic Social Services. In sum, it operates like this: DCFS Foster Care and Adoption Services for Indo-Chinese Orphans Reimbursement at 100 percent of costs; no ceiling; USHHS awards under the 1975 U.S. Refugee Assistance Act. DPA offers under IA-AFDC, via DCFS under Substitute Care and Adoption Services. DPA looks for a relatively hefty, 41 percent, hike in the federal orphaned refugee money in SFY 1983, from $2.7 to $3.8 million, because of a substantial rise in the caseload. May 1982/Illinois Issues/17 The two remaining kinds of DPA reimbursement also cover services related to children, and there'll be more federal money in both next year. One is Enforcement of Child Support Laws; the other is Foster and Adoptive Care for AFDC clients. Under the first, county state's attorneys track down spouses delinquent in paying child support. The intent is to lower AFDC costs. Enforcement of Child Support Laws (Administrative Costs Only) Reimbursement at 75 percent of costs; states must supply 25 percent; no ceiling; ISI1HS awards under Title IV-D of the U.S. Social Security Act. DPA offers under IA-AFDC. While this federal administration money looks like indirect reimbursement, it works like a direct grant. DPA, acting as administrator, "hires" the state's attorneys to do the work. Overall, DPA looks for a 3.6 percent increase in SFY 1983, from $12.7 to $13.2 million. About half will be in reimbursement for DPA for administration, which will not appear separately on the agency books. The other half will be grants for the state's attorneys, which flow through DPA's Special Purpose Trust Fund account. DCFS Foster Care and Adoptive Care for DPA's AFDC clients Reimbursement at SO percent of costs; no ceiling; USHHS awards under Title IV-E of the U.S. Social Security Act. DPA offers under IA-AFDC, via DCFS under Substitute Care and Adoption Services. DPA expects a 5.9 percent increase in federal AFDC substitute care money in SFY 1983, (from $6.8 to $7.2 million) because of a substantial rise in the number of AFDC children who need foster care or adoption. Like substitute care for orphaned refugees, DPA purchases this care from DCFS, which, in turn, buys it from a local provider. DPA reimburses DCFS which in turn reimburses the local providers. These federal reimbursements flow through the general revenue funds, not a separate account. So much for the alphabet soup of DPA's indirect federal aid. What about the direct money? It may represent only 3.1 percent of all DPA revenue, but it is nearly $100 million, and a little more is expected. In SFY 1983, DPA expects direct federal aid to rise $4.8 million or 5.4 percent, reaching $93 million. Much of this direct money has already been mentioned: refugees, orphans, child support, foster care. There are two others. One is a grant to help AFDC clients pay their utility bills; the other is reimbursement for administering a program designed to give AFDC clients an incentive to work (WIN). Energy Assistance Formerly a categorical grant; effective last October lumped into the new federal Low-Income Energy Assistance Block Grant; formula grant currently gives Illinois 5.68 percent of the national appropriation, setting the current Illinois ceiling at $108 million; USHHS awards under the 1981 U.S. Windfall Profits Tax Act. DPA offers under IA; DCCA gets the grant, reallocates to DPA. In SFY 1982, DCCA expects to get the maximum, $108 million for energy assistance. Of that, $40 million automatically goes to help DPA's AFDC clients pay their utility bills. The remaining $68 million is available to other low-income Illinois residents who apply through DCCA. In SFY 1983, although DCCA again expects to get the maximum, that ceiling has dropped to $102 million — and not all of it will be available for energy assistance because it must also cover weatherization programs. Under the block grant, the formula boosts Illinois' percentage of the total from 5.68 to 5.80, but the total was cut, effective last October. When Congress cut the national appropriation, the ceiling for Illinois dropped from $108 to $102 million. In addition, DCCA is authorized to set aside 15 percent of the block grant for weatherization programs, and that means only $93 million will be available for energy assistance in SFY 1983: $45 million (a 12.5 percent increase) will go to DPA's AFDC clients, leaving only $48 million (a 29 percent decrease) for all other low-income residents applying through DCCA. DPA's energy assistance is used for cash benefits to clients, while DCCA's share also includes administrative costs. Work Incentive (WIN) Program (Administrative Costs Only) Reimbursement at 90 percent of costs up to a ceiling; USHHS awards under Title IV-C of the U.S. Social Security Act. (This money covers only DPA's administration of the WIN program.) When Congress cut the national appropriation for WIN benefits, it also cut the money for administering the program, affecting DPA. Illinois and other states plagued by high unemployment are lobbying to restore funding for WIN — both the program and administration — since iobs take clients off the welfare rolls and cut the cost of benefits — including the 50 percent the feds pick up. Illinois estimates WIN finds jobs for about 13,000 AFDC clients a year. That's only 2 percent of the AFDC caseload, but it represents a savings of 3.4 percent — $29 million — in bentfits each year. As nearly as DPA can tell, there will be an 18.8 percent cut in the money for administration of the WIN program ill SFY 1983, resulting in a drop fronl $3.2 to $2.6 million. Illinois claims for administrative I reimbursement had run about $4 million a year, never exceeding the ceiling. Now that Congress has cut the national I appropriation, the ceiling has dropped, j but the states aren't quite sure ho« low. For SFY 1982, DPA first believed I the ceiling would stand at $4.9 million, I but the agency now believes it will sag I to $3.2 million, which means a loss of I $800,000 in the current fiscal year. Foe I SFY 1983, DPA believes the ceiling will fall all the way to $2.6 million, which would mean a loss of $1.4 million in the next fiscal year. So federal aid to public aid in Illinois is going up — not down — in SFY I 1983. Surprised? Well, that could always change; Congress has yet to finalize FFY 1983 appropriations, which I will affect the last three quarters of! SFY 1983 and the first quarter of SFY 1984. As nearly as the DPA can esti- I mate, federal aid will rise $23 million, I or 1.6 percent, in the next fiscal year; , $19 million more in reimbursement, mostly AFDC, and $4 million more in I grants, mostly AFDC energy assist-1 ance. But there are still two significant minus signs on DPA's federal aid ledger. Congress has cut the national appro-priation for the AFDC Food Stamps and AFDC WIN programs. DPA won't lose money there, since the feds fund both; but Illinois AFDC clients I will lose plenty in benefits. Congress has also cut the money to administer I those programs. And that's where I DPA will lose $23.4 million in SFYl 1983. These are the kind of federal cuts Thompson is worried about. And they're just the beginning. Thompson and the governors of other high-unemployment states finally persuaded Reagan to restore the funds he ordered cut 1 in the federal Jobs Services ProgM (administered in Illinois by the Department of Labor), but they're still working on WIN — and Food Stamps. Ttel fate of federal aid to public aid; and the rest of the human services in llli-1 nois, may well depend on the power ol Thompson's persuasion.□ 18/May 1982/Illinois Issues |