Note: In September, the Attorney General’s office issued a letter addressing whether the Oklahoma Commission for Human Services had acted improperly in approving changes to the state’s child care subsidy program at a June meeting without going through the official rulemaking process.  The letter was prompted by concerns raised by DHS Commissioner Steven Dow. I spoke with Commissioner Dow (who is my former employer and a former Oklahoma Policy Institute Board member) on September 30th; this is an edited transcript of our conversation.

David Blatt:   Could you describe the concerns that gave rise to the Attorney General’s letter?

Steven Dow:  Well, the concerns were not related to the wisdom of the policy but rather to the question of whether or not procedurally the DHS Commission was acting properly in revising the child care eligibility and co-payment schedule. It was my understanding that according to Oklahoma law, in order to change the eligibility standards and the co-pay schedule, we were required to follow the Administrative Procedures Act .  So that question was posed to the Attorney General’s office, not in the form of an actual binding AG’s opinion but to get their ‘advice’.

David:  What did the AG determine?

Steven:  The AG determined that the proper way to do it was through the Administrative Procedures Act and we needed to follow rulemaking.  That’s also the precedent that the Commission has always followed at every instance that it has changed the child care co-payment  in the past.  At the same time, the AG does not believe the child care co-payment is necessarily a fee under the Administrative Procedures Act.  The reason that’s a relevant question is because if it involves raising a fee on people, then it cannot be done even through the emergency rulemaking provisions.  It would have to wait until the legislature is back in session.

David:  Were you pleased with the ruling?

Steven:  I was very pleased with the ruling as regards the need to follow the rulemaking process.  I had a difference of opinion with the counsel from DHS and was pleased that ultimately the process has to be done in conjunction with what I believed Oklahoma law says and requires.

I think that at this point, one of the reasons it is appropriate to go through proper rulemaking is that rulemaking allows for the public to really have input.  One of my concerns with how the Commission and the Department have made some very important decisions in the past is that they have not really adequately solicited opinion from the public and key stakeholders before making a decision.  In this particular case, I think it is particularly important to gather the perspective of child care providers and working families so we can try to understand better what the impact is on them before a decision is made.  At the July meeting of the Commission [when implementation of the changes was deferred to November], I would guess probably 75 people showed up to speak to the Commission prior to it taking a vote on this item.The chairman at that time only allowed one person from the entire group to speak and he limited her to a maximum of two minutes.  So that was the totality of the public input that the Commission had prior to making a decision.  I think now if there is a recommendation that we still make the increase, I think that the process here is one that will likely result in really having meaningful input to the Commission. Given the fact that we now have two new Commissioners on board, I am confident that there will be a little bit more deliberation on this matter by the Commission than there was when it was voted on previously.

At the same time, I still feel the question of whether child care co-payments are a fee, which would require legislative approval, needs to be resolved, and as such, I’m not sure that even following the rulemaking process would suffice to make a co-payment increase valid.

David:  What happens next?

Steven: We’re not sure about that.  [DHS Director] Howard Hendrick indicated at the last Commission meeting  that staff was going to formulate a series of possible recommendations or options.  From a legal standpoint, I think there is no way that a change can go into effect on November 1^st as the Department previously said it would because I don’t think that what the Commission did at either its June meeting or its July meeting actually had the authority to change it. My sense is that the existing co-payment and eligibility criteria will remain, and if the Department wants to increase the co-pay and change the eligibility criteria as was being proposed, then presumably we will go through proper rulemaking.

David:  As you said, your challenge was to the process not to the substance of the decision.  As a Commissioner, what would you like to see DHS do regarding child care co-payments and eligibility?

Steven:  At  this point I do not believe it is appropriate for us to  increase the co-pay and ask people who are already struggling very hard an to pay more for the services that they are already receiving. This is  particularly the case given the fact that I think that we have a very large  budgeted TANF (Temporary Assistance for Needy Families)  surplus.  The Department has historically not spent its TANF block grant every year and at this point, even in the Department’s own budget, it was projecting a $15 million TANF surplus to have on hand at the time.  I do not believe that given the large size of the surplus we need to ask struggling parents to pay more, particularly given the draconian  increases that amounted to about a 30 percent increase for people.

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Dr. Haskins is a senior fellow in the Economic Studies Program and co-director of the Center on Children and Families at the Brookings Institution and senior consultant at the Annie E. Casey Foundation in Baltimore, MD. He is widely acknowledged as among the nation’s foremost experts on social welfare policy, having served as Senior Adviser to President George W. Bush for Welfare Policy and as a top Congressional staffperson. Dr. Haskins has published books and articles on a number of education-related topics, including intellectual development, day-care policy, federal expenditures on social programs and federal budget and tax policy, including Creating an Opportunity Society, a book that he co-authored with Isabel Sawhill.

His Oklahoma City talk will address indicators of poverty and policy recommendations founded on four values-based premises about the appropriate role of government.  The lecture is sponsored by the Oklahoma Marriage Initiative and OKDHS Family Support Services Division.

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This chart (which is based on DHS monthly statistical bulletins available here) shows monthly participation for both programs going back to January 2008: Both programs reached all-time participation highs in March. The 575,898 food stamp recipients that month represented an increase of 28 percent compared to 12 months before and an astounding 40 percent increase compared to March 2008. The growth in Medicaid beneficiaries was slightly less dramatic – the 690,055 Oklahomans covered by SoonerCare in March was a 15 percent increase from June 2008. The two programs now serve between one in five and one in seven Oklahomans, including an especially high percentage of children.

We would expect that as the economic recovery gains steam, these enrollment numbers will begin to level off, as more people regain employment that provides them enough income to cover their basic needs and offers private health insurance. However, we shouldn’t anticipate any swift or sudden drop in participation. Even in healthier economic times, a substantial portion of Oklahoma’s population relies on the public safety net for adequate food and medical care. And even with public programs and a vigorous network of non-profit agencies and faith-based groups, some families still fall short or fall through the cracks. But during these hard times in particular, the support provided  by programs like SoonerCare and food stamps is making the difference in helping hundreds of thousands of economically vulnerable Oklahoman households just make it through from one month to the next.

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The talk, which will take place from 12 – 1 pm at the Oklahoma History Center, is part of the Policy & Practice lecture series hosted by the Oklahoma Department of Human Services Office of Planning, Research and Statistics and University of Oklahoma Center for Public Management. Other speakers in the Spring 2010 series include Harvard economics professor David Cutler addressing health care reform; NPR correspondent John Hockenberry on eliminating stereotypes; and Charles Wilson of the Center for Children and Families in San Diego on the impact of childhood trauma.

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The importance of SNAP to Oklahomans is at least two-fold. As shown by the latest numbers released this week by the USDA, food insecurity remains prevalent in Oklahoma, with an average of 14.0 percent of people in the state over the period of 2006-08 indicating that they were unable at times over the year to afford adequate food.  For hard-pressed families, SNAP benefits provide an essential support to family budgets, allowing for the purchase of weekly groceries where otherwise children, seniors, and working-age adults might go hungry or without adequate nutrition. The program now serves one out of every seven Oklahomans and one out of four children. In August, the average monthly SNAP benefit was $127 per person and $296 per household.  This is a substantial increase from last September, when the average monthly benefit was $97 per person and $237 per household. The increase reflects both a 13.4 percent in SNAP benefits that was part of the stimulus package approved by Congress this spring, and declining household incomes, which has left families eligible for higher benefits amounts.

Secondly, the Supplemental Nutrition Assistance Program is of great importance to the economy of the state and local communities. In FY ’09, the USDA value of SNAP benefits in Oklahoma was $592 million, according to the annual report of the Department of Human Services, which is equal to about one-half of one percent of the state’s total GDP (PDF).  SNAP expenditures averaged $166 per person for the entire state population, and exceeded $300 per person in some low-income counties, such as Adair, Choctaw, McCurtain and Seminole. Because SNAP benefits are spent in local grocery stores and markets, they have a powerful economic mutliplier effect – according to the analysis of Mark Zandi of Moody’s Economy.com, every $1.00 increase in federal food stamp benefit produces $1.73 in increased GDP, an amount exceeding any other form of federal spending enacted as part of the stimulus package. Finally,  SNAP benefits are 100 percent federally funded, so the program is not jeopardized by state revenue shortfalls or budget cuts during the economic downturn.

We hope that DHS’ monthly string of new caseload records will soon end as an economic recovery begins to take hold. Until then, there is little doubt that SNAP is serving a key role as a safety net program mitigating the severity of the downturn on Oklahoma families and communities.

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Oklahoma’s unemployment rate continued its rapid ascent in April, climbing to a seasonally-adjusted rate of 6.2 percent. This is its highest level since July 2003…The number of Oklahomans receiving benefits from the Supplemental Nutrition Assistance Program (formerly Food Stamps) rose for the twelfth consecutive month in March, reaching an all-time high of 450,057 persons. Similarly, enrollment in the SoonerCare health insurance program increased by 1.2 percent in March and was up by 4.5 percent compared to one year prior.

Contrary to what you’d expect, though, the bad news is not reflected in use of the most basic piece of the safety net. Participation in Temporary Assistance for Needy Families (TANF), a federal block grant that helps fund job training, work supports, and, in some instances, short-term cash payments for low-income single parents, is virtually unchanged. There were only 230 (1.2 percent) more people receiving TANF cash assistance in March than a year ago. How can this be when the economy is shedding jobs and every other measure shows tens of thousands of people in need?

We have remarked before on  participation in the cash assistance portion of TANF and noted that we help a considerably smaller segment of the poor population than most other states. We want to know why, in the face of obvious need, we aren’t helping more of our fellow Oklahomans.

The most recent numbers from the Department of Human Services (DHS) showed TANF caseloads increasing in April. Whether or not this is the beginning of a trend, it is still striking that the long-term trend is downward.

Right now we mostly have data and questions. The Oklahoma TANF cash assistance caseload is falling much faster and more consistently than the national caseload. The figure below shows that Oklahoma’s 2007 TANF participation was 76 percent under the 1997 level, compared to a national drop of 62 percent. We departed downward from the national trend twice, once in 2000-02 and again starting in 2006. Monthly data not shown here indicate the Oklahoma caseload continued to fall well into the current recession while national cases leveled off.

Department of Human Services (DHS) annual reports and data from organizations making national comparisons turn up some other interesting facts. Each one raises important questions.

• Applications for TANF in Oklahoma have fallen every year since 2004. Is there less need for help thanks to robust economic growth or is the relatively low benefit level we offer not worth applying for?
• Most poor Oklahomans do not receive TANF cash assistance. In 2007, only 2.7 percent of people below the federal poverty level received TANF cash assistance. Do the majority of poor people not need or qualify for TANF or are we leaving needy Oklahomans out?
• TANF coverage varies greatly across the state. Of people below the poverty line, just 0.2 percent in Grant County received TANF benefits, while 7.1 percent participated in Oklahoma County. Do the needs vary that widely or does the program operate differently in different offices?
• Oklahoma’s monthly benefit for a single-parent family of 3 has fallen from $306 in 1996 to $213 in 2008, adjusted for inflation. Is this enough to make a meaningful difference in a poor family’s life or prospects?
• Oklahoma spends just 13 percent of federal and state TANF money on cash assistance, compared to a national average of 30 percent. Can we show that our spending for child care, transportation, administration, and other social programs is equally or more effective at fighting poverty than cash assistance?

We’ll keep watching the monthly participation reports to determine if the long slide in caseload has finally been arrested. We’ll also be working to collect better information. We won’t be alone in trying to make sense of the numbers and the policy choices behind them. The Georgetown University Law School’s Peter Edelman is focusing on Oklahoma as part of an article about TANF and its future. The DHS research staff is studying the numbers and looking for answers as well. We hope that you’ll comment if you have any insights or opinions and that you’ll stay tuned for further updates.

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for June, tracking economic and fiscal trends in Oklahoma and the nation. While the bulletin focuses on monthly and quarterly data on jobs, inflation, work support programs, and the like, each month we present annual data on some indicator of Oklahoma’s general prosperity and well-being. This month we look at the trend in the annual number of confirmed cases of child abuse and neglect in the state. The news is decidedly encouraging.

Last year’s total of 11,714 confirmed cases of abuse and neglect is the lowest this decade. The rate of child abuse and neglect cases – 13.0 per 1,000 children in the population -  is the lowest since FY ’94 and is down 35 percent from the peak rate of 20.0 confirmed cases of abuse and neglect per 1,000 children in FY ’98.

While the statewide rate is important, it is worth noting wide discrepancies across counties in the rate of confirmed cases of child abuse and neglect. According to the 2007-2008 Oklahoma Kids Count Factbook put out by the Oklahoma Institute for Child Advocacy, rates for the most recent three year period (FY ’04 – FY ’06) ranged from a high of 42.5 cases per 1,000 children in Coal County to a low of 5.8 per 1,000 in Kingfisher County.

There is not a clear single factor responsible for the decline in child abuse and neglect; rather, those involved in the field point to a combination of policies, practices, and economic circumstances:

• On the policy side, the state has invested heavily over the past decade in front-end prevention programs, such as the Children First Program and Healthy Start initiative, aimed at providing at-risk parents the resources and skills to avoid engaging in abusive behaviors. A newer pilot program, Safe Care, specifically targets families identified at the highest risk for abuse.
• Within DHS, Child Protective Services has been in the process of implementing a new practice model that focuses on conducting assessments, rather than investigations, of families that have been reported to them, allowing for more timely and effective interventions in at-risk situations before actual abuse occurs.
• At the same time, the state’s extended stretch of strong economic growth and low unemployment may also have contributed to the drop in abuse through FY ’08 by providing a greater measure of economic security for children and their families. DHS also points to its ongoing success in increasing child support payments to single parents and linking low-income parents to work supports such as food stamps and child care as reducing the financial and psychological stress on families.

The explanation does not seem to be any decline in the effort to report and investigate suspected abuse: as can be seen from DHS’ annual statistical report on child abuse and neglect, the number of reported cases of abuse and neglect that were investigated has remained steady at just over 60,000 in recent years.

The Legislature has taken a strong interest of late in the child welfare system, passing HB 1734 this past session, which was based on a comprehensive and largely critical audit of the system. DHS was appropriated $1.15 million this year to begin implementing some of the key recommendations from the audit, including establishing a statewide telephone hotline and creating a Medical Passport program.

Hopefully these reforms will complement and reinforce the existing efforts that seem to be making real and long-awaited progress in tackling one of Oklahoma’s gravest problems. However, with the downturn in the economy and parents losing jobs and income, the financial strain on families may once again lead to a spike in abuse. This is all the more reason not to get too comfortable with these numbers, but to be on the lookout for those in your community who may need some extra support in these challenging times. Those who are interested in becoming involved in child abuse prevention efforts should contact the Oklahoma State Department of Health at (405) 271-7611 or through their website. A variety of opportunities exist ranging from the simple to more involved commitments.

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The FY ’10 budget agreement allocates $549.7 million for FY ’10, of which $71.4 million is federal stimulus money associated with enhanced federal matching rates on the agency’s Medicaid-eligible expenditures. At its April Commission meeting, Director Howard Hendrick presented the emerging FY ’10 budget picture for the agency. He asserted that DHS required $665.8 million in state funds for FY ’10, which amounts to an increase of $106.6 million compared to FY ’09 appropriations. Based on the figures presented to the Commission, the $9.4 million funding cut means DHS could be facing a shortfall of up to $115 million in FY ’10.

At Thursday morning’s May Commission meeting, however, the tone and outlook were different. Hendrick now reckons the shortfall at closer to $50 million and believes some of this could be made up from other stimulus funds for child care, nutrition, and other programs. Still, he believes spending will be about 98 percent of current levels. When the agency is absorbing increased employee health care costs and facing greater–in some cases, record–demand for safety net services, it is hard to believe Oklahomans will not suffer service reductions as a result of this budget. Hendrick admits to having more questions than answers and indicated the Commission’s budget committee will be meeting throughout June to devise a budget strategy.

If anything, things could be worse for DHS after FY ’10. They will still be absorbing higher employee costs and could face continuing high demands for services. One-time funds account for between 15 and 20 percent of next year’s budget and the agency has less cash to carryover from FY’09 than many prior years. Hendrick rightly identifies the greatest challenge for this–and most other state agencies–as identifying a level where ongoing revenue can support ongoing expenditures and consistent service levels. This year’s budget does nothing to step in that direction and heads the opposite way in some respects. The picture for DHS and other agencies will become clearer–but probably not better–as FY’10 unfolds.

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Now the Oklahoma Legislature is considering similar legislation as a conference committee substitute for SB 390.The language being proposed reads:

The Department of Human Services shall establish a program of drug testing for those persons applying for or receiving assistance pursuant to the TANF program. Those persons identified as in need of substance abuse services shall be conditionally eligible to receive assistance pursuant to this subsection provided that the applicant participate in the recommended substance abuse services.

The bill as it originally passed the Senate and House called for a program of drug screening, rather than drug testing, for TANF applicants.

For at least the past eight years, DHS has contracted with the Department of Mental Health and Substance Abuse Services to conduct screenings of all TANF applicants through the Substance Abuse Subtle Screening Inventory (SASSI) . Those who screen for potential problems are then submitted to a more extensive evaluation, after which applicants may be referred for a drug test. As under SB 390, those who test positive can receive assistance only so long as they participate in recommended substance abuse services.  According to DHS, the existing program has been successful in identifying and assisting families with substance abuse issues. Evaluations of the SASSI instrument have found it to have an accuracy rate of over 90 percent in assessing the presence or absence of substance dependence and substance abuse. Unlike drug tests, the screening instrument can identify alcohol-related issues as well as narcotics.

At a time when DHS is already coping with budget shortfalls and considering cuts in services, testing everyone, rather than focusing on those who show signs of a problem, would be a costly and inefficient use of public dollars.  Resources committed to testing would be unavailable for providing services to those actually found to be in need of help.

There is also strong reason to believe that requiring all TANF recipients to submit to drug tests may well be unconstitutional. Michigan is the only state to have mandated drug tests of TANF applicants. In 2003, the 6th Circuit Court of Appeals upheld a district court ruling that found Michigan’s drug testing law unconstitutional on the ground that it violated the 4th Amendment. The ACLU and Michigan ultimately came to an out of court settlement that suspended the drug testing program.

Most importantly, perhaps, if we are serious about identifying and helping single parents with drug addictions, the current approach of using a proven screening tool as part of the initial application is much more likely to meet our goals. The “test first, ask questions later” approach is likely to deter people from seeking assistance in the first place for fear of testing positive. This would only serve to keep people in need of substance abuse services from being identified, and would increase the financial hardship on the children of potential applicants, who could lose their only source of family income.

Oklahoma’s legislators should reject this unnecessary, expensive, and counterproductive proposal; and if they don’t,  Governor Henry shouldn’t have to think too long before applying his veto.

Update: House conferees on SB 390 refused to sign on to the drug testing language, and the bill has been returned to conference committee.

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