Senate Bill S5586

                                BILL NUMBER:S5586

TITLE OF BILL:
An act
to amend the social services law, in relation to exemption from
participation in work activities for applicants or recipients of
public assistance; and providing for the repeal of such provisions
upon expiration thereof

PURPOSE OF THE BILL:
The bill would amend the social Services law (SSL) to allow a parent
or other relative of a child under the age of one to be exempt from
welfare work requirements.

SUMMARY OF PROVISIONS:
Section 1 of the bill would amend SSL § 332 (d) to allow for a parent
or other relative of a child up to age two to be exempt from welfare
work requirements for a maximum period of twelve.

EXISTING LAW:
SSL § 332 (d) currently provides that a parent or other relative of a
child under one year of age shall not be required to participate in
work activities for a maximum period of twelve months, only three
months of which shall be attributable to anyone child, except as
otherwise extended up to the twelve month period by the social
services official to be.
              

PRIOR LEGISLATIVE HISTORY:
This is new legislation

STATEMENT IN SUPPORT:
New York State has a $55 million early childhood education budget gap
for SFY 2011-12. Across the state, local districts' children and
families are facing the loss of subsidized child care. New York City
announced a cut of 17,000 child care subsidies. During these
difficult economic times, subsidized early childhood education
programs play an especially vital role in helping families to
maintain or find employment. A loss of $55 million could result in a
loss of capacity to serve 6,000 children. These cuts will continue
eroding the capacity and quality of New York State's early care and
education infrastructure for years to come.

This bill would temporarily modify work requirements for welfare
recipients who are single parent heads of households (SPHH) to
significantly reduce spending on TANF child care subsidies. The
exemption would protect non-TANF child care subsidies from cuts and
allow the working poor to remain in their jobs. This is consistent
with New York's position on helping the working poor and protecting
safety-net programs.

New York Social Services Law already provides exemptions from welfare
work requirements for individuals caring for an ill or incapacitated
person or in their last month of pregnancy or they themselves are ill
or have a child under 12 months of age, only three months of which is
attributable to anyone child, unless extended.


Child care subsidies need to be preserved for children's educational
and social development and to support parents' ability to maintain
their jobs. Hundreds of low-income families across the state have
already lost and will continue to lose critically needed subsidies
that serve as a linchpin in parents' ability to secure and maintain
jobs.

BUDGET IMPLICATIONS:
It is anticipated that this bill would be a cost savings.

The savings reflected below are based on data from OTDA and OCFS.
Please note - this is 2009 data.

If New York allows an exemption up to age two:

o Gross savings if single-parent heads of households (SPHH) with
children under age two are exempted, with full exemptions:
$73,724,208

o Savings if SPHH with children under age two are
exempted, assuming 40% opting out of the exemption by PA employed
households: $44,234,524**

These are the numbers used to calculate savings above:

Number of TA recipients receiving childcare

          62,928
Families
With         Average
Child        Annual
Under        Child
One          Care Costs Gross Savings  Minus 40%**    Net Savings

3,713        7,368,00   27,357,384.00  10,942,953.60  16,414,430.40

Families     Average
With         Annual
Child        Child
Under        Care
Two          Costs     Gross Savings   Minus 40%**    Net Savings

10,006       7,368,00  73,724,208.00   29,489,683.20  44,234,524.80

**(Assumes  PA-employed individuals would not receive the exemption or
would opt out)

This is a conservative estimate for several reasons. First,  the  cost
per slot used ($614 per month) is the average for children under 5 and
infant  care is the highest of all child care slots.  For example, the
infant rate for center-based care in New York City is  $338  per  week
($1,453/mo) and $160 per week ($688/mo) in a family day care home.


Additionally,  the state of California enacted a similar provision and
estimated a $376.8 million  annual  savings  which  was  comprised  of
$215.3 million in child care savings plus $161.5 million of employment
services savings through the elimination of the connected work program
expenses  (e.g.  expense  of  the  workfare  or  soft skills program).
Administrative savings account for about  42%  of  the  total  savings
achieved   in  California.  If  we  assume  the  same  percentage  for
administrative savings in New York, we could produce an additional $12
to $33 million in savings  depending  on  which  upper  age  limit  is
adopted.

Following the California budget methodology assumption, we estimated a
full take up rate for those exempted. California legal advocates state
that  these  assumptions  have  proven  to  be  correct and almost all
eligible  recipients  were  waived.  California  achieved   this   via
implementation by opting eligibles in; those not wanting the exemption
would request an 'opt out'.

Analysis  of  potential  impact  to  the federal welfare participation
rates: In calculating the work rate, the federal Temporary  Assistance
for  Needy Families (TANF) law allows states to exempt households with
children under age 1. For children under age 2,  a  state  can  exempt
families  with  children  over  age  1  although the TANF law does not
exclude them in calculating the work participation rate. New York  has
met  the  work  participation  rate  in  recent  years  and its target
participation rate requirement through 2011 is about 35.8%.  New  York
can  avoid  affecting  its  participation rate by creating a "separate
state program" for these newly exempt families. If New York  does  not
create  a  separate  state program, and in the unlikely event that New
York was not able to meet  its  participation  rate,  New  York  could
correct   the  noncompliance  with  a  "corrective  compliance  plan."
Furthermore, the federal penalty may be reduced if the state meets the
definition of a "needy state" -- related to high unemployment or  food
stamp caseload growth.

Two  final  notes: New York State would not experience a back-end loss
in tax revenue for the PA employed  population.  According  to  OTDA's
December  monthly  report,  the average gross monthly income for SPHHs
was $842 per month after application of disregards, which  equates  to
$10,104  per year. Take the following into consideration. New York tax
payers receive a standard deduction, a personal  exemption  per  child
and  a household credit. This means that the first $11,500 of a SPHH's
income is exempt from taxes. The population of PA employed individuals
who would qualify for a work-exemption under our proposal mostly  earn
too little to have to pay New York State taxes each year.

There  is  substantial  evidence  that  high  quality  early childhood
education has great benefit to  individual  families  and  society  at
large.  A  2004 report by Legal Momentum and the MIT Workplace Center,
"Early Childhood Education for All: A  Wise  Investment,"  found  that
every  dollar invested in early childhood programs saves taxpayers $13
in future costs. A  few  benefits  of  making  high  quality  programs
available   to  all  children  include:  reduced  costs  for  remedial
education, increased school performance, and a  foundation  that  sets
young students on the path to earning higher income levels as adults.

EFFECTIVE DATE:


This  act shall take effect immediately and shall expire and be deemed
repealed on July 31, 2013.