February 25, 2016

Senate May Consider Proposal that Could Adversely Affect Public Benefit Programs

As the Assembly wrapped up its work last Thursday, it passed a measure that could significantly change public benefit programs in Wisconsin. That might be positive or negative – depending on how two state agencies respond to the open-ended directive to develop changes. The proposal in question, Assembly Joint Resolution 109, is very vague and it was approved just a week after it was introduced – without ever getting a public hearing.

The stated objective of the resolution sounds good – alleviating the “cliff effects” in public benefit programs. In other words, the goal is to redesign public benefit programs so people don’t hit or fall off a “cliff” when their family income reaches the eligibility ceiling. Legislators in both parties and advocates for public assistance programs agree that that’s a very worthwhile objective. But there are good and bad ways to eliminate or reduce cliff effects (none of which are easy), and the vague resolution doesn’t indicate what solution(s) the authors have in mind. Nor does it provide any assurance that the subsequent steps will provide a meaningful opportunity for public input.

The proposed resolution, which is co-authored by Speaker Vos and Senator Darling, is likely to be taken up on the Senate floor when Senators reconvene in mid-March. If they approve it, the proposal would direct the Department of Children and Families (DCF) and the Department of Health Services (DHS) to seek one or more waivers from the federal government to:

“create a sliding scale that mitigates the effects of the existing fiscal cliff by taking into account a person’s income and other factors regarding a person’s eligibility for public benefit programs and establishing appropriate levels of contributions and benefits for participants based on those factors.”

Some people might argue that we shouldn’t worry about the proposal because it’s a statement of legislative intent, not a proposed change in state statutes. However, that isn’t much consolation because it could be an impetus for changes that DCF already has the authority to implement.  The largest cliff effect is in the child care subsidy program, and DCF currently has the authority to raise copays, which would be the easiest way to make the “cliff” smaller for people whose income reaches the eligibility ceiling. The proposed resolution might be construed as encouragement to use that option, whereas options we prefer – such as raising the income ceiling and gradually phasing down the benefit – would require funding and statutory changes.

There is bipartisan interest in the goal of alleviating cliff effects; however, depending on how it’s done, accomplishing that goal could hurt far more people than it helps. A better way to tackle this important but complicated subject would be to establish a Legislative Council study committee that includes legislators of both parties and outside experts.

Before the legislature directs two state agencies to develop and possibly implement changes that could dramatically alter public benefit programs in Wisconsin, legislators and the public should have a better idea of what those changes will look like. Our hope is that the legislature will hold off on this proposal and develop a process that explicitly calls for public involvement and continued legislative oversight.

Jon Peacock