The TANF (Temporary Assistance for Needy Families) Program helps needy families and children by emphasizing a “work first” philosophy. Welfare reform provisions in the Personal Responsibility and Work Opportunity Reconciliation Act of 1996 gave states the flexibility needed to design programs that would help able-bodied parents and their families become self-sufficient. This law also specified federally mandated participation rates and time limited benefits

The Governor recommends $11,016,766 for TANF Grants which includes $5,030,600 from the general fund and $5,986,166 from federal funds. This is a decrease of $1,000,911 (8.3 percent) from FY2002. This is due to a projected growth in caseloads that did not materialize. In FY2001 there were 2,729 cases. The department estimates 2,775 cases in FY2002 and FY2003, an increase of 46 cases. The monthly average payment is expected to be $324.90.

South Dakota's TANF caseload has continued to decline from a caseload of 5,319 cases in December,1996. In December, 2001, there were 2,987 families receiving assistance grants, of which 1,293 cases contained an able-bodied parent who must participate in work program activities. Most of this reduction has come from this portion of the caseload. That portion of the caseload that is “child only cases (cases headed by a non-parent caretaker relative or disabled parent) has not changed significantly.

At the same time, South Dakota has successfully met federally required work participation rates. In FY1997, the federal participation rate requirement started at 25 percent and increased by 5 percent each of the first three years with participation rates of 44.8 percent, 39.2 percent, 45.5 percent respectively. While the participation rates for FY2000 and FY2001 have yet to be released, the department anticipates that South Dakota will once again exceed the federal requirements.

South Dakota families with parent head-of-households may receive cash assistance for their families for no more than 60 months. The first month that counted toward this lifetime limit was December,1996. Because of the success in moving families from the welfare roles through a strong work first philosophy and the added focus on strengthening the family nucleus by helping recipients pursue a high school education, parenting classes, and referrals to partnering agencies, the department expects that less than 20 families will reach their lifetime limits in the next few months. Most of these families have severe health issues that prevent them from entering the workforce. As a result, some qualifying families may be eligible to receive extended benefits beyond the 60-month limit based on hardship criteria that has been established by rule.

Senator Putnam asked if South Dakota received incentives for the TANF program. Mr. Mike Vogel told the committee that there were high incentive bonuses given a few years ago.

For the seventh year in a row South Dakota's Food Stamp Program achieved the highest case payment accuracy rate in the nation: 98.82 percent. In recognition of that achievement, the United State Department of Agriculture awarded the department with a $731,693 bonus payment. In total, food stamp staff has brought in over $9,000,000 in bonus payments over the past 17 years. This is a record that no other state has come close to matching.

Senator Apa asked if there were additional staff needed for the debit card program used for the food stamp program. Mr. Ellenbecker said that no extra help was needed, but some are trained.

Electronic Benefits Transfer_Electronic payments: The department continues to expand the use of computer technology to increase administrative efficiency and are working to replace benefit checks and warrants with electronic payments. In April, 2001, DSS Adult Services and Aging (ASA) respite care and homemaker providers began receiving direct deposit. Electronic payments are more efficient, more accountable and less expensive than paper based systems. They offer recipients and service providers an added degree of convenience and security. The department processes approximately 12,5000 direct deposit payments per month to custodial parents, low income heating assistance fuel suppliers, child care assistance providers , assisted living providers, ASA respite care and homemaker providers and optional Supplemental Security Income recipients. This is an increase of almost 3,000 more direct deposit payments per month than what was processed last year. The department will add additional ASA providers to direct deposit in 2002 and will be exploring other DSS programs that may benefit from direct deposit.

Representative Clark expressed a concern with the number of low income families who do not have computers in their homes to take advantage of the electronic benefits transfer. Mr. Ellenbecker said that was a concern, but computers are available in public libraries.

Heating Assistance- applications for the Low Income Energy Assistance Program (LIEAP) are now available on the Internet for applicants to print, complete and mail. To achieve greater efficiency, these transactions will be completed electronically. Approximately 17,000 households apply for heating assistance annually. The program will allow the electronic billing of claims for payment to energy suppliers. A portion of energy assistance funds will be designated to purchase heat meters and demand control devices for the LIEAP clients. This will allow electricity to be purchased at a lower rate and reduce dependency on the program.

The Governor recommends $7,589,680 from federal funds for the Low Income Energy Assistance Program (LIEAP). This is an increase of $2,330,000 (40.2 percent) from FY2002. LIEAP helps pay heating costs by making payments directly to the energy supplier. It can also pay for emergency heating system repairs. The program is designed to supplement payments made by people who would otherwise be unable to pay the full cost of heating their home. The agency estimates 14,800

households will be served in FY2003.

Senator Madden asked how the energy budget was affected by a warm winter season when energy assistance is not needed. Mr. Ellenbecker responded that the funds would be carried over to the next fiscal year.

Representative Clark asked for an explanation on the use and cost of heat meters and demand control devices. Mr. Ellenbecker said that his department would get the information to the committee.

Senator Greenfield asked for the amount in the budget for energy assistance for the current year. Ms. Blaseg said there is $7,600,000 for energy assistance.

Weatherization Assistance Program - replacement of water heaters is being included as an approved weatherization measure because energy used to heat water is exceeded only by the energy used for space heating in most homes. Air conditioners will be installed for individuals with certain medical conditions.

Senator Kleven asked if those people who apply for weatherization assistance are living in apartments. Mr. Vogel said that people who rent may receive assistance within the guidelines. He would accurately describe the guidelines for the committee in writing.

The committee then heard the agency's report of the FY2003 and FY2004 Community Services Block Grant (CSBG). Mr. Mike Vogel presented a summary (Document #3).

The purpose of the Community Services Block Grant is to provide assistance to states and local communities working through a network of community action agencies and other neighborhood- based organizations to (1) reduce of poverty, (2) the revitalize low-income communities, and (3) empower low-income families and individuals in rural and urban areas to become fully self- sufficient, particularly families who are attempting to transition off a state program carried out under Part A of Title IV of the Social Security Act.

Expected funding for the FY2003 Community Services Block Grant are being determined by HHS, Office of Community Services. South Dakota will receive approximately $2,824,693. The funding for FY2004 is expected to be the same as FY2003. The amount available to the Department of Social Services may change slightly due to the amount of CSBG funding that is directly granted1 to Indian tribes. For FY2003, the state will allocate $2,824,693 in CSBG funds. For budgeting purposes, the FY2004 amount is projected to be $2,825,000.

According to the Community Services Block Grant Act, 90 percent of the state's annual
CSBG allotment must be passed through to “eligible entities”. Eligible entities are further defined to be community action agencies or agencies that have a tripartite board consisting of low-income persons democratically elected, public officials, and private sector persons. The state is authorized

a minimum of five percent of the allotment, or $55,000, whichever is greater, for administrative purposes with the remaining funds allotted for discretionary projects or programs determined by the Governor. Based on the expected funding level, the state should have approximately $141,235 available each year for administrative costs and discretionary programs. The four designated community action agencies that receive CSBG funding are private, non-profit agencies. They include: Inter-Lakes Community Action Agency in Madison, Northeast South Dakota Community Action Program in Sisseton, Rural Office of Community Services in Lake Andes, and Western South Dakota Community Action Program in Rapid City.

Representative Richter asked how the department determines the distribution for each community action agency program. Mr. Vogel said it is based upon the estimated number of low income people in the area served by the community action agency.

Representative Klaudt said that the Community Services Block Grant looks like a duplication of services. Volunteer organizations could provide school supplies for needy families.

Ms. Linda Edel, Western South Dakota Community Action Program in Rapid City, informed the committee about various aspects of her community program. She said that programs are based on local needs of individuals and families. The program staff is limited. Food commodity distribution and medical equipment lending, air conditioner distribution, hygiene product distribution, weatherization assistance, and school supplies distribution are program components.

The committee hearing for the Community Services Block Grant ended.

The Joint Appropriations Committee then continued the budget hearing for the Department of Social Services.

Senator Adelstein asked for additional information about the additional money recommended for the department because of the closing of the State Training School in Plankinton.

Representative Richter said that he would work with the Department of Human Services and the Department of Corrections for a one page summary of the numbers generated from the closing of the State Training School.

Senator Adelstein asked if there are different TANF programs for members of the tribal communities. Mr. Ellenbecker said that the program addresses all South Dakota citizens. There are 2,917 TANF cases which includes reservation and non-reservation counties.

Representative Klaudt asked if there is a cost share with the reservations for TANF programs. Mr. Ellenbecker said that if tribes wanted to administer their own programs, they would only receive federal funds. TANF is under review by some of the tribes.

Representative Richter discussed inviting tribal representatives to speak to the committee about the reservation's child care services. Mr. Ellenbecker said that the tribal chairperson is the appropriate contact.

Representative Clarence Kooistra presented information in support of the TANF program. He encouraged the committee to consider the reserves to be spent for the South Dakota families at the poverty level.

Reverend Phil Lint, from the Blunt, Harrold, Highmore United Methodist Churches, presented information in support of the TANF program. He said that there are many working people who are struggling financially. There are many children who come alone and with families to the weekly free banquet.

Representative Adelstein asked if Reverend Lint and the community work with their community action program. He encouraged him to start such a program.

Representative Klaudt asked if the banquet was privately funded. Reverend Lint said that it is volunteer based. They use the Southeast Community Center and local churches and civic organizations make donations.

Ms. Cathy Brechtelsbauer, Bread for the World, Sioux Falls presented information on the TANF grant allocation (Documents #4 and #5). She asked the grant inflationary adjustments for TANF payments be increased to average $9.00 per month for each qualifying family.

Senator Drake asked about what programs a family of three could qualify for according to TANF. Ms. Brechtelsbauer said they would get full benefits for food stamps. Senator Drake stated that the family would receive energy assistance and food stamps. The TANF payments are their only cash.

Representative Clark asked about the total cost of inflation for the TANF program. Ms. Brechtelsbauer said the percentage increase is needed to adjust the poverty line and to get federal money that belongs to the children.

Ms. Jeanne Koster, South Dakota Peace and Justice Center, asked for federal funds to be given to children in South Dakota who are living in poverty.

Ms. Susan Randall, South Dakota Coalition for Children, testified that children deserve a cost of living increase.

Representative Lange asked about the department's policy to not increase TANF inflationary costs. Mr. Ellenbecker told the committee that the department is in compliance according to the surrounding states. Representative Lange said that we should do better for our South Dakota children.

Representative Klaudt asked about the possibility of increasing wages and not putting the program benefits in jeopardy. He asked if the earnings amount could be increased.

Representative Adelstein asked about the 2,775 TANF recipients per month. Ms. Blaseg told the committee that the state receives $22,000,000 from the federal government. The funds pay for cash assistance, work programs, and child care.

Representative Clark asked about the five year limit for people to use TANF funds. Mr. Ellenbecker said that the Native Americans on the reservations are exempt from the five year limit.

Representative Adelstein asked about the inception of the TANF funds. Mr. Ellenbecker said that the use of program funds has grown every year.

Representative Richter informed the committee of TANF history. Five or six years ago, the Legislature developed a policy which allowed to build a reserve of TANF funds. That reserve now equals approximately $17,000,000.