BILL ANALYSIS Ó Senate Appropriations Committee Fiscal Summary Senator Christine Kehoe, Chair AB 69 (Beall) Hearing Date: 08/25/2011 Amended: 05/27/2011 Consultant: Jolie Onodera Policy Vote: Human Services 7-0 _________________________________________________________________ ____ BILL SUMMARY: AB 69 would require the Department of Social Services (DSS), to the extent permitted by federal law, to allow counties to utilize existing information maintained by the Social Security Administration (SSA) regarding low-income social security benefit recipients to simplify enrollment into CalFresh. This bill would require DSS to support enrollment efforts through various activities, as specified. _________________________________________________________________ ____ Fiscal Impact (in thousands) Major Provisions 2011-12 2012-13 2013-14 Fund Increased CalFresh Unknown; increased benefits, potentially Federal* participation in the low hundreds of millions annually CalFresh administration$2,700 to $3,800 annually, dependentGeneral upon level of participation Sales tax revenue $1,000-$1,300 in 2011-12; potentially General $5,000 to $7,000 ongoing *CalFresh benefits are 100 percent federally funded. _________________________________________________________________ ____ STAFF COMMENTS: SUSPENSE FILE. AS PROPOSED TO BE AMENDED. Existing federal law provides for the Supplemental Nutrition Assistance Program (SNAP), known in California as CalFresh, under which nutrition assistance benefits are provided to eligible individuals. This bill would require DSS, to the extent permitted by federal law, waiver, demonstration project, or other federal authority, to allow counties to utilize existing information maintained by the SSA in order to streamline and simplify enrollment into CalFresh provided that an interested county has either the existing capacity to receive the information, or the ability to adapt its existing automation systems without costs or significant changes. This bill would require the DSS to support enrollment efforts by AB 69 (Beall) Page 3 doing all of the following: 1) Working with the SSA to target social security recipients 60 years of age and older whose income and other factors are likely to qualify them for aid; 2) Developing a streamlined application and simplified enrollment process for likely eligible recipients, which may include strategies used by other states to reduce paperwork and increase federal nutrition benefits, including self certification of key eligibility factors, standardization of benefits and deductions, and automation of the application process; 3) Seek waivers, grants, or other federal authority and support necessary to implement this section. The supportive enrollment efforts required under the provisions of this would result in increased workload to DSS of an unknown, but potentially significant amount in excess of $100,000 to work with the SSA, develop a streamlined application and enrollment process for SSA recipients, and seek the appropriate federal authority to implement the new process. Although counties are authorized to implement this process subject to the capacity to receive the information, or the ability to adapt its existing automation systems without costs or significant changes, there could be significant costs to the State in programming and automation changes required to enable the secure and proper sharing of data between the SSA and existing automation systems. Although combined application projects have been implemented in other states utilizing data matching for SSI recipients in order to increase SNAP participation, extending the data sharing concept to social security recipients (while excluding SSI recipients) has not been tested to date. The potential ongoing costs to the State to enter into an agreement with SSA to provide this information are also unknown. Recent data suggests that there are over 440,000 CalFresh eligible households containing recipients of social security benefits. Assuming 34 percent of eligible seniors not already receiving CalFresh benefits may participate statewide, to the extent counties opt to utilize the new application and enrollment process could result in additional CalFresh benefits in the low hundreds of millions of dollars (100 percent AB 69 (Beall) Page 4 federal). Newly eligible households could range from 106,000 to 142,000 based on 75 percent participation to implementation statewide. Assuming a phase-in of eligible cases over nine months, intake and ongoing administrative costs could range from $2.7 million to $3.8 million General Fund per year. To the extent the application and enrollment process is simplified and/or streamlined could result in lower estimated administrative costs for this population. Additional federal CalFresh benefits received will likely result in increased sales tax revenue to the State. Studies show that low-income individuals spend a significant portion of their money on food, and increasing CalFresh access would allow them to spend that money on taxable items. Assuming every dollar in CalFresh benefits results in state sales tax collections of approximately $0.02 would result in $1 million to $1.3 million in increased revenue in 2011-12 assuming an operative date of January 2012, and between $5 million to $7 million once fully implemented. Author's amendments specify no costs to the State for automation and make the provisions operative only upon the availability of adequate funding and the ability to implement the provisions of the bill within existing resources, as determined by the department.