Can cities and counties build a better system?
Debra Sanders was one of those people who the so-called reformers pointed to when they railed about the deplorable state of the nation’s welfare system. A lifer. An unmarried mother of two, 12 years on the dole. Working sporadically at a series of dead-end jobs in restaurants and warehouses. A poster child for irresponsibility.
Sanders was well aware that she was going nowhere fast. Still, when North Carolina instituted the program that would turn her life around, she was not at all thrilled. “I went because they said they’d take away my check if I didn’t,” she says. “I had an attitude.”
That program, Work First, was Charlotte/Mecklenburg County’s response to what local officials knew was impending welfare re-form. Modeled on California’s GAIN (Greater Avenues for Independence) program, Work First was the brainchild of North Carolina Gov. Jim Hunt, who held that no reform was possible until real jobs were made available to the state’s welfare recipients.
Charlotte and Mecklenburg County embraced the concept with fervor. Then local officials took it one step further, involving the entire Charlotte business community and contracting with the Chamber of Commerce to market the program.
North Carolina was already a “waiver state,” one of those with programs in place that meet or exceed the requirements of the federal welfare reform legislation signed by President Clinton in August 1996. Waiver states are ex-empt from those requirements until the waivers expire. Work First puts a two-year time limit on benefits and re-quires welfare recipients to sign personal responsibility contracts agreeing to comply with certain rules.
Still, time limits and personal responsibility contracts are difficult to enforce against people with no job skills, no opportunities, no transportation and no child care. Richard “Jake” Jacobsen, director of social services for Mecklenburg County, knew that he would have to mobilize the entire business community to make Work First work.
That’s where the Chamber of Commerce came in. Jacobsen approached David Belton, vice president of education and work force development for the Chamber, and pitched him a unique idea: The Chamber of Commerce would market the Work First program to the city’s businesses. Belton bit, and for $86,000, the Charlotte Chamber of Commerce became the first such entity in the country to acknowledge its stake in welfare reform.
With the chamber’s help, Jacobsen began setting up job fairs for welfare recipients.
Meanwhile, Sanders had received a blunt letter from the Mecklenburg County Department of Social Services indicating that she would be required to participate in Work First or risk losing her benefits.
Sanders went to the first meeting and signed reams of paperwork (it may be reform, but it’s still the government). A week later, both her kids were in day care, and she was beginning the four-week course that opened the door to her future. “I had always gotten jobs through connections,” Sanders says. “I had never really had an interview. They gave me interview tips. I’m sort of the quiet type, so I knew I had to give it all I had to give.”
Apparently, that was enough. Host Marriott of Charlotte was present at one of the job fairs. Sanders impressed the manager and was hired at the Tie Rack store in the hotel on a part-time basis. “I was honest and loyal and at work on time,” Sanders says. “I smiled and greeted everyone.”
In November, she went full-time, and now she is on her own, making her own money. Sanders is now considered one of Work First’s shining lights and is featured in much of the Chamber material about the program.
Some 12 years after she first began receiving welfare checks, Sanders was sitting next to Gov. Hunt at lunch. “I talked to him,” she says. “He was nice. I was nervous.”
Welfare reform has been one of the most hotly debated topics of the last five years. For local governments, the debate was frightening, although it did serve to prepare them for the worst case scenario. It also gave Charlotte/Mecklenburg and a number of other cities and counties a chance to formulate policies that would either pre-empt the federal law or lessen its impact.
Basically, the federal law, the Personal Responsibility and Work Opportunity Act of 1996, affects states, and, thus, local governments, through two provisions. It replaced Aid to Families with Dependent Children (AFDC) with Temporary Assistance to Needy Families (TANF) and put severe restrictions on assistance to legal immigrants.
Under TANF, each state receives an annual block grant, which is fixed for six years on the basis of previous AFDC spending. Consequently, the more a state spent prior to enactment of the new law, the more it will receive in TANF block grant funding.
States are penalized if their caseloads do not drop. Community service is required of non-working adults, unless states decide not to enforce this provision. The law requires states to have 25 percent of all single-parent families that receive assistance enrolled in a work participation program in 1997, a requirement that increases five percentage points each year until topping out at 50 percent in 2002. Participation rates for two-parent families are 75 percent in 1997 and 1998, increasing permanently to 90 percent in 1999.
“Workfare,” consequently, has become a critical component of every state’s welfare reform efforts. In some cities, like Charlotte, it provides a lifeline; in others, like New York, it is yet another bone of contention.
Under New York’s welfare reform law, unemployed recipients are required to perform 30 hours of community service a week, mostly cleaning city parks. Those involved say the work is menial and that they are treated poorly. There is even serious talk about unionizing welfare recipients, talk that has been encouraged by the AFL-CIO.
To help get its welfare recipients to work, Essex County, N.J., is consolidating traditional welfare services and job training programs into a “Division of Work,” and computerizing clerical, reporting and data intake functions to cut down on mistakes and fraud.
The county, which accounts for nearly one-third of all the state’s welfare recipients and handles the eighth-accmay30.pslargest welfare delivery system in the country, is working with local community groups that provide everything from child care to housing in order to create a system that gets people to work and keeps them there.
The government would be responsible for meaningful job training and encouraging job creation in the private sector. “Big government has shown itself incapable of standing alone in its fight against poverty,” says Essex County Executive James Treffinger. “The present system has failed both the taxpayers who support it and those individuals and families it was intended to help.”
Working or not, however, adults will be kicked off the TANF rolls after five years, although states may exempt up to 20 percent of their caseload from this provision for reasons of hardship.
The news is worse for most legal immigrants, although states, cities and counties are battling to change or at least modify the federal law, which they see as intransigent and destructive. The federal law bars most legal immigrants, both current residents and future entrants, from receiving Supplemental Security Income and Food Stamps. Additionally, future immigrants will be barred from other federal means-tested programs for five years, and a sponsor’s income will be considered available to the immigrant for eligibility purposes under most of those programs.
States can deny services to legal immigrants under TANF, Medicaid and the Social Services Block Grant. An additional requirement would force states to provide quarterly reports of illegal immigrants, a provision of questionable value and enforceability, according to some observers.
The National Governor’s Association has asked Congress to reconsider the legal immigrant provisions and appropriate additional funds for states (like Florida, California and New York) with large immigrant populations.
Finally, the law requires states to have their welfare reform programs in place by July 1.
The federal law drew sharp criticism from a number of organizations representing local governments.
“Overall, welfare reform is a budget-buster for cities,” Jos‚ Dimas, legislative counsel for the National League of Cities, says flatly.
Indeed, an NLC report, signed by Greg Lashutka and John DeStefano, mayors, respectively, of Columbus, Ohio, and New Haven, Conn., states flatly, “The welfare reform law eliminates any automatic right to federal assistance for the nation’s poorest families and children.” The report goes on to list potential fallout: reduced sales, business and property tax revenues; impacts on both public health and crime; possible municipal credit rating downgradings; and an explosion in the number of homeless families.
A stable economy nationwide has kept most of those problems at bay thus far. In fact, welfare rolls across the country have fallen by 18 percent since 1994, leading to a potential increase in federal welfare dollars available to local governments. This is because the amount of money available is based on past experience; the money remains the same, but there are fewer recipients for it. In fact, a House Ways and Means subcommittee study pointed out that the typical state will receive 56 percent more money per family than it did in 1994. Still, Lashutka and DeStefano appear justified in their concern, which is shared by local government officials everywhere.
“Our [welfare] rolls are down 30 percent over the last five years,” says Jerry Collamor, spokesman for the County Commissioners Association of Ohio. “It’s a good situation, but it couldn’t have happened at a worse time in some ways. Ohio’s in the best economic shape it’s been in in years. It’s gotta go down again. The feds have fixed the amount of money they’re putting in. What happens when the rolls go up, and the economy goes sour?”
Welfare reform, Collamor observes wryly, is “a great opportunity, much like losing your job is a great career opportunity.”
Getting people to work is the essence of welfare reform. There are, however, three big roadblocks on the way: transportation, child care and affordable housing. It is on these three fronts that cities and counties are focusing much of their attention – and enjoying much of their success.
Public Transportation With the exception of systems in a few cities like New York and Chicago, public transportation in the United States is sorely lacking. Add to this the fact that many jobs have moved out of the inner city, away from those who need them most, into suburbs, where transit woes are even more serious. The result is people living where the jobs aren’t and jobs located where the people cannot go.
In Charlotte, for instance, the Host Marriott that hired Debra Sanders is at the airport. Sanders lives in the city, and like many of her neighbors, does not have access to reliable transportation.
Hotel managers realized that, if they were going to make a commitment to welfare reform in Charlotte, they would have to make a commitment to transportation. So the Host Marriott Express, a bus that runs from the inner city to the airport several times a day, was born.
Marriott employees do not pay for the service; a nominal fee is charged to employees of other airport businesses, many of which pay half the fee and deduct the rest from employee paychecks.
Chicago also is promoting this kind of reverse commuting with passenger vans known as Shuttle Bugs that run from suburban commuter rail stations to nearby companies. Sponsored by the Transportation Management Association of Lake-Cook, the Shuttle Bugs are funded through a public/private partnership that makes extensive use of money made available through ISTEA’s Congestion Mitigation and Air Quality Improvement programs.
In Michigan, the state Family Independence Agency has joined forces with the Department of Transportation and the Michigan Jobs Commission to overhaul public transit in Alpena, Menominee, Midland and Ot-tawa counties and in the Tireman and Romulus communities in Wayne County.
The state’s Suburban Mobility Authority for Regional Transportation is focusing on getting people from major transit hubs to jobs and offers one month of free service to the newly employed.
The program is part of Project Zero, one of Michigan Gov. John Engler’s welfare reform initiatives. Project Zero is a pilot program designed to reduce to zero the number of households with no earned income on public assistance. Michigan, a waiver state like North Carolina, has been tinkering with welfare reform since 1992. Its policies, recognized in the federal legislation, now serve as models for other states.
In some areas, silly regulations compound the problems of lack of public transportation. California, possibly the most car-happy state in the country, puts a $1,500 limit on the value of a car owned by a welfare recipient. Above that, and it’s considered cash available to the family.
“It’s unrealistic,” says Yolanda Rinaldo, director of the Santa Clara Social Services Agency in Santa Clara County. “In California you need a car in order to get to work. Our public transportation is awful. We need to take a hard look at these kinds of things and make them more realistic.”
Child Care According to the Washington, D.C.-based Urban Institute, in 1995, 75 percent of families receiving AFDC were headed by a single adult. Two-parent households accounted for only about 1 percent of AFDC recipient families in Alabama, Delaware, Georgia, Mississippi, Oklahoma and South Dakota.
Child care, therefore, is a critical component in any reform attempts.
It might also be the most ignored aspect of both state and federal reform efforts. “Child care is underfunded,” says Dimas of the NLC. “Cities will have to handle that.”
“Welfare recipients just don’t have access to quality child care,” says Rinaldo. “That affects their jobs. Many of our clients are in and out of jobs. The first crisis – their car breaks down, their child gets sick – they have to make choices. The choice tends to be the family versus the job.”
Because of that, Santa Clara County took a family-oriented approach to welfare reform. Task forces comprised of more than 500 residents of the fairly affluent Silicon Valley community determined that there were two goals any meaningful welfare reform had to meet: Families must be given the means to become self-sufficient, and the ongoing health and protection of children have to be ensured.
It sounds easy; in truth, providing for the “ongoing health and protection of children” is one of the toughest things a city or county can face. Often, it’s a matter of money.
Two Kentucky cities have managed to leverage their assets to create child care programs. Cave City, a town of 1,953, had no day care at all until 1992, when the city decided to build a facility. It was not a reaction to welfare reform; it was merely a response to a need.
“People in town were working, and there was no place for the children to go,” says Mayor Bob Hunt. “We just felt it was a good use of money.”
Using funds from a Community Development Block Grant and donated land, Cave City managed to build a center. Now privately run, it is leased by the city for $1 a year. And in Paintsville, Ky., the population of 4,354 has access to affordable, city-sponsored day care in a recreation center.
Housing Wisconsin’s welfare reform law took effect in June 1996. By September, 6,200 Milwaukee County families, one-fifth of the county’s total welfare population, had been “sanctioned,” meaning kicked off the rolls. Many were homeless within months.
The county’s homeless shelters are working overtime; still, they must turn away large numbers of those seeking assistance.
In nearby Dane County, County Executive Rick Phelps pointed to a 32 percent increase in the number of families being turned away from shelters in his community. “We are seeing the real need to coordinate welfare reform with housing needs,” says Phelps, who also serves as president of the National Council of Elected County Executives and is a National Association of Counties board member. “We are urging the federal government to begin monitoring the actions of states in implementing welfare reform, particularly regarding changes in homeless populations.”
JoAnn Boscia, president of the Lakewood (Ohio) City Council and a member of the National League of Cities’ Campaign for Housing and Community Development Funding, says the problem is critical for nearby Cleveland.
Central, the Cleveland neighborhood most affected by welfare reform, Boscia says, will need an estimated $14,000 a month more in federal housing subsidies than it now receives. But that is not the way the prevailing wind is blowing.
The Office of Management and Budget has recommended a $1 billion reduction in the Department of Housing and Urban Development’s budget, which has already been sliced by one-fourth in the past two fiscal years. This recommendation came on the heels of a HUD report that estimates the department will need an additional $2.3 billion between 1997 and 2002 just to keep up with current housing commitments.
Add to this the fact that many Section 8 housing contracts are due to expire soon (and many likely will not be renewed, according to Frank Shafroth, NLC’s director of policy and federal relations), and the situation becomes dire.
NLC, NACo and 49 other interested groups have issued a joint statement with recommendations on housing and welfare reform.
The statement calls for a HUD budget for fiscal ’98 that is sufficient not only to fund 1997 housing subsidies and renew Section 8 contracts, but also to increase housing assistance to those affected by welfare reform.
“We believe that welfare reform will exacerbate the existing affordable housing crisis for those families who are already the most vulnerable,” reads the statement.
The coalition maintains that the critical link between housing and job stability is being ignored at the federal level.
“We’re Silicon Valley,” says Yolanda Rinaldo. “The average rent for a one-bedroom apartment is $730. Where can these people live?”
Still, some cities are making headway in this regard. Since 1987, Fremont, Calif., has operated a “Housing Scholarship Program,” under which welfare recipients pay reduced rent – as little as one-third the going rent – while they are in job training programs. Local landlords participating in the program say that scholarship recipients make ideal tenants, paying their rent on time and taking care of their units.
Since the program’s inception, more than 100 former welfare recipients have become active members of the Fremont workforce.
If the federal legislation hit everyone hard, states with large immigrant populations got a double whammy. Consequently, they are having to deal with reform in general, as well as the specifics relating to legal immigrants.
“One-fifth of the total national population of legal immigrants affected by welfare reform is in L.A. County,” says Judy Weddle, human services administrator for the county’s social services department. “We have 140,000 SSI recipients who will likely lose their benefits.”
Los Angeles County responded with a naturalization campaign that, according to Weddle, is working quite well. “L.A. County accounts for one-third of the state’s population of welfare recipients,” she says. “We have a big stake in reform. We’ve got one office solely devoted to welfare reform strategy.”
As part of its naturalization campaign, the county identified those individuals who would lose benefits and began an outreach program to help them become citizens. County workers made 1,000 telephone calls a day to those identified as potentially affected, putting people in contact with agencies – churches, community colleges, etc. – that had signed on to the campaign.
The county has also inserted itself into the statewide debate over welfare reform. Twelve regional meetings are held monthly, bringing interested parties together to discuss county welfare policy, as well as the goings-on in the state general assembly.
Additionally, the county, which represents 86 smaller government units, has drafted a welfare reform resolution asking the state to be responsive to its particular problems. Noting that once state reform takes effect, an estimated 99,000 elderly and/or disabled immigrants will lose SSI protection, the resolution requests that the state provide a safety net for those people. (Under California law, counties are now required to provide that safety net.)
It also asks the general assembly to at least maintain current state welfare funding. (Gov. Pete Wilson has proposed diverting $562 million from current welfare programs.)
While cities and counties struggle with developing their responses to welfare reform, corporate America’s interest is piquing.
Indeed, many see the subject as an opportunity to get in on the ground floor of the next great privatization wave. It certainly doesn’t hurt that that is a $28 billion wave.
Texas started the ball rolling, opening up its entire $560 million-plus welfare system to competitive bidding. A number of states are also looking into the possibilities, mostly on a county-by-county basis.
Opponents of privatization argue that welfare, of all things, should not be turned over to unfeeling, insensitive corporations, whose bottom lines will necessarily govern.
Those in favor of the trend contend that privatization will eliminate one of the biggest drawbacks in local control of welfare dollars – the possibility of fraud and bureaucratic bungling. “As it is, [government] welfare offices aren’t equipped to find people jobs; recipients typically fill out forms at local centers, check yellowing employment listings, then wait for a check,” noted Business Week columnist Paul Magnusson in a commentary entitled Why Privatizing Welfare Could Actually Work. “Private companies, on the other hand, bring innovation and flexibility; they’re not bound by hoary work rules and civil service protections.”
USA Today has called the move to privatize welfare “the biggest overhaul of a federal program since the New Deal,” arguing that “if done right, it could be a huge moneymaker for businesses while saving millions of dollars that could be returned to taxpayers or spent on other programs.”
Whether these grandiose predictions will pan out remains to be seen.
But privatization would virtually ensure one thing: Eventually all the city, county and state government experts on the subject would be working for the companies that want the business.
Already Teaneck, N.J.-based Lockheed Martin’s welfare arm reads like a governmental Who’s Who: former Michigan welfare guru Jerry Miller, former Oregon welfare administrator Steve Minnich and former Alaska child support enforcement director Holli Ploog.
Additionally, the infant industry has spawned a number of success stories. For instance, Trenton, N.J., Mayor Doug Palmer credits one company, Kearney, Neb.-based Curtis & Associates, with saving his city about $2.5 million and moving more than 500 residents off welfare and into jobs.
However it is accomplished, welfare reform will continue to command public attention for the foreseeable future. And the cities and counties that do it right will be propelled onto the national stage.
“This Wall Street Journal reporter showed up at one of our job fairs,” says the Charlotte Chamber of Commerce’s David Belton. “I asked, ‘How did you hear about us?’ He said, ‘Oh, I was at the White House. The president was talking to CEOs about welfare reform. He told me to check out the Charlotte Chamber because they had an interesting contract.'”
For information on the Campaign for Housing and Community Development Funding, contact the NLC at (202) 626-3000 or NACo at (202) 393-6226. For specific state welfare reform laws, access NACO’s web site at www.naco.org. For a copy of Welfare Reform: What It Means to Your Community, contact the NLC Publications Center at (301) 725-4299.
Andersen Consulting, 100 S. Wacker St., 10th Floor, Chicago, IL 60606, (312) 507-6629, Joanne Beardslee
Working with: Texas Department of Protective and Regulatory Services, New York.
Services provided: Child and Adult Protective System electronically links more than 6,000 PC’s around the state to a database of information for caseworkers.
Distinguished by: Andersen Consulting focuses on outcome-based technological solutions to the problems facing welfare recipients.
EDS, 13600 EDS Drive, Herndon, VA 20171, (703) 742-2330, Stephen Person
Working with: Illinois Department of Children and Family Services, Los Angeles County, Texas Health and Human Services, Sacramento County, CA; Solano County, CA.
Services provided: Consulting, re-engineering, technological support
Distinguished by: EDS provides a broad range of services from job placement to fraud control.
America Works, 575 Eighth Avenue, New York, NY 10018, (212) 244-5627, Peter Cove
Working with: New York City, Albany County, NY; Rensselaer County, NY; Schenectady County, NY; New York State; Indianapolis Private Industry Council; Baltimore, Md.
Services provided: Performance-based welfare-to-work activities.
Distinguished by: America Works does not get paid if it fails to place an agreed-upon number of people in jobs that they then hold for at least six months.
Lockheed Martin IMS, Glenpointe Centre East, Teaneck, NJ 07666, (201) 996-7057, Ron Jury
Working with: Maryland, Colorado, Florida, Los Angeles County.
Services provided: Child support collection, electronic benefit transfer technology.
Distinguished by: Staff that includes an impressive array of former governmental social services administrators.
Maximus, 1356 Beverly Road, McLean, VA 22101, (800) 368-2152, Kevin Geddings
Working with: Los Angeles County; Cook County, IL; El Paso County, CO; Lake County, CA; Davidson County, TN; Milwaukee County, WI.
Services provided: Jobs placement initiatives, child support enforcement administration.
Distinguished by: Maximus focuses exclusively on human services program management.
Curtis & Associates, 124th W. 25th Street, St. James Square, Kearney, NE 68848, (800) 658-4399, David Tarrell
Working with: Solano County, CA; San Francisco County; Trenton, NJ; Lincoln, NE; San Mateo County, CA; Hudson County, NJ; Sheboygan County, WI; Barron County, WI; Wyoming Department of Family Services; Santa Barbara County, CA; Hamilton County, IN; Shelby County, IN.
Services provided: Full service case management, job-seeking skills work-shops, job-coaching services, school-to-work and correctional programs.
Distinguished by: Programs are built on five principles: Urgency, ownership, learn by doing, lifelong learning and motivation.
Unisys, Township Line & Union Meeting Roads, PO Box 500, Blue Bell, PA 19424, (215) 986-3507, Dan Baccino
Working with: Los Angeles, Michigan, Arizona, Indiana, Florida, Kentucky, Maine, South Carolina and the District of Columbia.
Services provided: Child welfare, child support enforcement, technological assistance.
Distinguished by: Unisys is a systems integrator, accepting primary leadership responsibility for coordinating the best available support re-sources and managing multi-vendor operations and relationships.
