Reno Gazette-Journal, April 20, 2008: Woes push social aid up
By ANJEANETTE DAMON
adamon@rgj.com
In a paradox known well to economists, state governments are confronted with the greatest need to provide a community safety net just as the resources to do so are at their lowest.
In Nevada, social service caseload statistics are painting a bleak economic picture, portraying a landscape of families struggling with lower wages, fewer jobs and higher costs. At the same time, the state is struggling to plug a $914 million hole in its budget.
A look at the economic statistics tell the same story as the social services caseload statistics.
In early 2007, gas prices began their march above $3 a gallon. The unemployment rate began to climb. So did the demand for welfare, Medicaid and food stamps.
Compared to last year, welfare and Medicaid caseloads are up more than 30 percent. Food stamp cases have increased
16 percent.
The future portends even more strain. Caseloads are expected to outpace allocated funding by 56 percent in welfare and by 15 percent in food stamps. Medicaid increases are costing the state an unexpected $60.7 million.
“In difficult times, demands for government services go up,” said Jim Shabi, a state economist.
Nevada’s two-year-old economic downturn is funneling families who never have had to hold out a hand for government assistance programs.
“The people we’re seeing coming in are the people not used to applying for services,” Judy Burkholder, a clinical social worker at Carson Valley Medical Center in Gardnerville, said of her peers in county social services. “People who are losing their homes, had their utilities turned off, have maxed out their credit cards. And they don’t come for help until it’s last ditch.
“We’re seeing more of these people who never in their life thought of applying for services.”
Jamie Burnett, a program director for the Children’s Cabinet in Reno, tells a similar story.
“We’re seeing an increase in two-parent households applying for childcare assistance,” she said. “That’s not typical.”
Clients who must look for a job to keep their benefits are taking twice as long to land something, if at all, Burnett said. Food stamp recipients can’t keep up with increased food costs and are running out of money before the end of the month. Construction workers and real estate agents who no longer can find work in an upended housing market are applying for help.
“It’s tough out there,” she said. “I don’t know how people are doing it.”
Tips dry up
Marianna Reid, a Reno cocktail waitress and bartender, had just reached a place where she felt she could buy health insurance for her 9-year-old daughter through her employer. But the economy caught up with her.
At minimum wage, she depends on tips. Those have dried up.
“I tried to pick up more shifts, and I thought I could do it,” Reid said. “But it’s just not feasible. It would cost me $100 a week.”
She’s now applying for Medicaid, worried that her daughter, who suffers from asthma, might have an attack.
“I don’t know, we would become homeless if she had another asthma attack,” Reid said. “We couldn’t keep up with the bills.”
All the same, she hates the idea of applying for assistance.
“I feel horrible,” she said. “I feel like I’m slacking as a mom.”
For Reid, government isn’t the only safety net. Her daughter attends Bailey Charter School, where the Food Bank of Northern Nevada provides a free dinner. And the parents have created a strong network to help each other in difficult times.
“People have bought gas for each other,” she said. “We give each other rides.”
Nevada’s unemployment rate is fueled by a significant loss of construction jobs in the wake of the housing market downfall. That’s followed by more losses in the mortgage industry and other financial sectors.
Job growth in retail
One of the only sectors to post significant job growth is retail. The problem: retail jobs pay a fraction of what construction industry jobs do.
“If you need to feed a family, maybe you go from a construction job to a retail sales job,” Shabi said.
Economists said it is extremely difficult to predict when the economy will turn, meaning budget forecasters have a hard time planning for shortfalls. Budget reserves can help soften the blow. But while Nevada has a well-funded rainy day account, it doesn’t have much in reserves for social service programs.
“In 2000, we had over
$100 million in reserve funding,” said Chuck Duarte, the state’s Medicaid administrator. “Part of it was used to help us deal with hard times. But a decision was made to start to use that reserve in lieu of the state’s general fund.”
The need also is exceeding the state’s ability to fund its programs for child-care assistance, energy assistance and Temporary Assistance for Needy Families grants (formerly known as welfare).
“In prior years when expenditures were less, we built up reserves,” said Gary Stagliano, deputy administrator of the Welfare Services Division. “But we’ve blown through those.
“It’s not desperate right now, but there’s troubled waters ahead.”
One of the difficulties Nevada faces is that it spends little money on “optional services.” Most of the assistance programs are mandated by the federal government. So when it comes time to cut, services are reduced to some of the state’s most vulnerable, Duarte said.
“Nevada is not in a very good position to cope with significant downturns in revenue,” he said.
To slow the caseload growth, state officials are considering a variety of changes to eligibility. Some of the changes would eliminate benefits entirely for some needy families.
For example, the state is considering denying food stamp and TANF coverage to citizen children of illegal immigrants. Another change would kick a family off of benefits if the head of household doesn’t complete job search and training requirements. Now, only the head of household loses benefits, not the family’s children.
No decisions have been made on the recommendations. They would have to pass through a number of public hearings before they were implemented, which would significantly delay any possible cost savings to the state.
The idea frightens Reid.
“People desperately need help,” she said. “This is the time when people need it the most.”