Interview with Steven Dow: Rules are rules

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.