Welfare That Doesn't Work

This is a time for action. It's a time to move beyond rhetoric and cosmetics. It's a time to take bold steps to ensure that children get whatever help they need to grow physically, emotionally and mentally into healthy and happy adults. My vision is of an Arizona that leads the nation in our commitment to children--measured not only in resources, but in results. That is what I intend to achieve when I'm elected governor, and I invite you to join me. A commitment to children is not found by partisan lines, it is simply the right thing to do.

--J. Fife Symington III,
Republican candidate for governor,
October 1990, at a debate sponsored
by the Children's Action Alliance

and moderated by Marion Wright Edelman, president of the Children's Defense Fund

Fast forward political light-years to May 1995.
On a roll after his reelection the previous fall, Governor Symington has been asked to give the keynote address at a conference sponsored by Empower America, the political think tank led by conservative luminaries William Bennett and Jack Kemp.

The speech is titled "Arizona As a Laboratory for Change." This time, Symington speaks not of a commitment to kids, but of a commitment to tax cuts, states' rights and the Contract With America.

"We are seeing a revolution in the literal sense--a revolving back to first principles, a restoration of balance, a belief in limited government and unlimited opportunity," the governor says. "Here in Arizona, the story is the same, with a few more chapters already on the books."

The Republican revolution did start earlier in Arizona than in much of the country. There is a track record related to the Symington administration's experiments in Contract With America-style reform. In the social-welfare sector, that record charitably can be described as disastrous.

The Department of Economic Security is the agency responsible for administering state and federal programs for abused and neglected children, the poor, the elderly and the developmentally disabled in Arizona.

Any dispassionate assessment of this agency's performance must acknowledge that DES was a bureaucratic mess before Symington took office. Its books were unauditable. The agency was underfunded and overworked. And the Symington administration has brought some level of efficiency and order to DES--particularly in the area of child-support enforcement.

But a review of resources and results--to use the governor's own reform vernacular--clearly demonstrates that, when it comes to the state's disenfranchised, the Symington administration and the Department of Economic Security have adequately addressed neither economics nor security. In fact, some of the most startling failures at DES have come in programs designed to cut welfare costs or to keep people off the dole entirely.

Interviews with legislators, advocates, DES employees and clients, as well as a review of state audits, privately commissioned surveys, federal reports, media accounts and studies by interest groups, show that DES is likely the most mismanaged agency in Arizona's executive branch.

Among other things, research shows that:
* Child Protective Services, a DES subagency, is now operating with only two thirds the number of caseworkers necessary to provide adequate services, according to DES testimony this fall before a legislative committee.

The results of inadequate staffing are evident in DES' track record: During Symington's administration, at least ten children have died--either after DES was warned of danger to the children or while the children were in the state's foster-care system. Meanwhile, a 1994 study shows, 30 percent of all reports of abuse in foster homes go uninvestigated by DES.

* Instead of funding programs aimed at reducing the government's overall welfare cost, the Symington administration--with help from the Legislature--has cut such programs. Since 1990, subsidies for child care for working parents have declined by 12 percent. And, at any given time, more than a thousand elderly and developmentally disabled people will have been waiting months for home-based services designed to keep them out of more expensive nursing homes.

* Despite the Republican focus on efficiency, Arizona has one of the nation's worst records in regard to welfare fraud. Fraud and mismanagement in the food-stamp and Aid to Families With Dependent Children programs cost the state tens of millions of dollars every year.

With large state and federal budget cuts looming, Arizona faces a choice: Make DES more efficient or cut welfare services that already are minimal in comparison to most states.

In November, Arizona did begin implementing a welfare-reform program that coincides with the Contract With America. The program is called EMPOWER--Employing and Moving People Off Welfare and Encouraging Responsibility.

Among other things, the program limits the number of children mothers can claim as beneficiaries while receiving payments from the federal Aid to Families With Dependent Children program. It allows welfare mothers to collect AFDC for only two years in a five-year period. Unwed mothers are required to live with their parents to qualify.

And child-care and health benefits are extended for families who leave welfare to work.

Along with this attempt to slim the welfare rolls, Symington wants to begin reducing welfare spending. He first directed DES to keep its next budget request at the same amount as last year's--an amount that represents a cut in real funding, if population growth and inflation are taken into account. Then he asked the agency to prepare for a 5percent budget cut.

At the same time, congressional Republicans want to institute national welfare reform. They hope to eliminate entitlement programs like AFDC, which require states to provide matching funds, and create block grants instead. Block grants would give the states more control over delivery of welfare services.

And that is precisely what many longtime observers of Arizona's welfare agency say they fear.

Arizona is the Do-Over State. Every year, people from the East and Midwest head west for sunny weather and a fresh start in life, leaving networks of family and friends behind. Consequently, Arizona has a disproportionate share of social problems to address--poverty, suicide, divorce, child abuse.

The Department of Economic Security, the agency assigned to deal with these needy and troubled masses, receives a budget of $1.8 billion from more than 125 state and federal funding sources. With more than 9,500 employees who serve a million people a month, DES is Arizona's largest government agency and one of the largest businesses--public or private--in the state.

Although Symington regularly speaks of the need to run the government like a business, his administration hasn't run DES prudently or, at times, even rationally.

There are two exceptions to the general rule of DES mismanagement: child-support enforcement and financial recordkeeping.

A July 1995 performance review by the state auditor general says DES collections of child support from delinquent fathers have increased from $52 million in the 1992 fiscal year to $90 million in 1994. Arizona was recognized by the National Child Support Enforcement Association in 1994 for its improvements in support collections.

And the state auditor general issued clean opinions on the department's 1993 and 1994 financial reports--the first such sign-offs in years.

The available evidence, however, strongly suggests that those limited successes are aberrations rather than signs of improvement to come.

Under the Symington administration, DES' top leadership has changed nearly as often as Hillary Rodham Clinton's hairstyle. In the past five years, DES has had four directors. The current director, Linda Blessing, had no prior experience in public welfare. Her background is as an auditor.

Even with an auditor at the helm, DES apparently has not made progress in streamlining costs.

The state auditor general says DES pays consultants to perform tasks that could be handled internally at less expense.

A November 1995 audit of contracting practices revealed that DES spent more than $4 million in 1994 for consultant services. Auditors reviewed 14 consulting contracts and found that "consultants were often used to perform routine tasks or to replace DES managment."

One consultant was paid $90 an hour to manage a unit in the Division of Developmental Disabilities. The comparable DES manager is paid $27 an hour.

Another consultant managed staff members who were redesigning licensing rules. The cost: more than $136,000, or three times the cost of a DES project manager.

Meanwhile, Blessing and her staff can't seem to get a handle on fraud and mismanagement--the feds call that the "error rate"--in the welfare rolls.

Every year, food-stamp and AFDC error rates cost the state tens of millions of dollars. The U.S. Department of Agriculture reports that, in the 1994 budget year, food-stamp error rates were worse than they'd been in six years.

Since Symington has been in office, Arizona has ranked among the ten worst states in the nation for food-stamp error rates. And a study commissioned by DES in 1994 revealed that Arizona loses more than $60million a year because of AFDC and food-stamp fraud.

DES management problems affect the human--or is it inhuman?--side of Arizona's welfare operation. Advocates who work daily with DES complain that caseworkers are overworked, that administrators lack compassion. Barbara Hopkins, executive director of the Arizona Consortium for Children With Chronic Illness, says DES employees don't believe in the people they serve.

"They treat you as if you're the scum of the earth," she says.
Hopkins helps families maneuver DES' daunting web of services, many of which aren't integrated. That means the mother of an autistic child has to fill out different forms, in different departments, with different caseworkers, to get services for her child, job training for herself and food stamps for the family.

"What is the point of all these agencies being within that major department of the state if they can't coordinate together?" Hopkins asks.

Bill Jamieson, DES director under former governors Bruce Babbitt and Rose Mofford, can't forget Symington's words at the Children's Action Alliance debate in 1990. Jamieson helped write that speech. A self-described moderate liberal, he broke party rank to vote for Symington. Now he calls it the biggest political mistake of his life.

Jamieson says, "I kind of believed that he might be able to do for children's programs and social services in general, as a conservative Republican, what Nixon did by going to China. But instead, he's done to Arizona what Nixon did to the country.

"He's shown absolutely no commitment to any of the social welfare programs at all."

But disgust with DES transcends party boundaries.
State Representative Laura Knaperak, a Republican from Tempe, is viewed by many of her colleagues as a one-issue legislator. That issue is DES, and she's not happy with its performance.

Knaperak also is unhappy with Symington. She claimsthe governor has warned administrators at DES tokeep quiet about the agency's problems, averting negative publicity at any cost.

"I'm frustrated," Knaperak says.
So are many DES workers. One employee, who recently quit in disgust, says, "Everybody in the agency knows what the problems are, so when you have somebody saying, 'Zip-a-dee-doo-dah, we're great, we love each other, we're really doing a good job,' it causes a lot of problems for people in the agency because they know better."

In September 1994, Henry Greer and Odessa Greer, ages 5 and 3, were found dead in a manhole near their west Phoenix home.

Days later, it was revealed that Child Protective Services had been warned six times in three years about the children's safety.

That same month, 3-month-old Robert Pakan died after he was left for three hours--on an Arizona summer afternoon--in a car parked at the home of his state-appointed foster family.

Two months before these children died, DES released a study performed by the National Child Welfare Resource Center for Management and Administration at the University of Southern Maine. In a press release accompanying the report, DES administrators praised themselves for protecting the safety of most children who enter the state's system.

And the administrators were technically correct. Most children in their jurisdiction hadn't been abused. But an awful lot had.

The study revealed that 30 percent of the reports of abuse in state foster-care homes were never even investigated.

Of the 4,152 cases reviewed in the study, 18 percent were returned to caseworkers because of immediate safety concerns.

Only half of the case files contained adequate documentation.
Just 38 percent of the children had met with their caseworker in the past month.

And 43 children were living in foster homes or other facilities where investigation had previously validated allegations of abuse or neglect.

By all authoritative accounts, the Child Protective Services division of DES continues to be poorly managed and poorly funded.

The Administration for Children, Youth and Families, which includes Child Protective Services, has seen four assistant directors and five program administrators in the past five years.

And John Foreman, presiding judge of the juvenile division of Maricopa County Superior Court, says the state's welfare agency has been held in contempt of court at least twice in the past 60 days for failing to follow the state's own laws on foster care.

Lawrence Smith is 86, and he has bone cancer. Parkinson's disease makes his right hand shake violently; cataracts cloud his vision. The retired carpenter lives in a trailer park on Phoenix's West Van Buren Street with Audreydea, his wife of 60 years. Audreydea, 74, is afraid to get behind the wheel of a car, so Lawrence drives to the grocery store once a month to stock the refrigerator with TV dinners. Audreydea's diabetes and arthritis make it difficult for her to cook.

The Smiths don't have family in Phoenix. Their son died of cancer two years ago. Audreydea thought she'd lose her mind. Their son had done most everything for them.

Their only income is $769 a month from social security. They can't afford new shoes. The Smiths' trailer is neat, but it's not so clean.

"I used to be an immaculate person, but I can't do those things no more," Audreydea says.

Three months ago, the Smiths put their names on a waiting list to receive meals through DES' home-based community services program. It could be another nine months before they get those meals.

The Smiths are not deadbeats. All their lives, they've helped others in need. Now they need help, and they have nowhere to turn but to the state.

Ironically, if the Smiths don't get the services they've requested, they will probably end up in a nursing home--at a much greater cost to taxpayers.

An average year of home-based services costs about $1,500. A nursing home averages $3,500 a month.

At any given time, there is a waiting list of about 1,000 people for home-based services, says Anne Lindeman, executive director of the Governor's Advisory Council on Aging. Many die or go to nursing homes before they get off the waiting list.

Somehow, Audreydea Smith remains optimistic. "I just take a day at a time anymore," she says.

Smith's hopes for DES help appear to be unrealistic. A review of services that DES provides to children, the elderly and the developmentally disabled reveals striking, heartrending inadequacies.

In its budget-cutting zeal, the Symington administration is hacking at programs that should be maintained or even expanded--if only because they will save the government money in the long run.

Earlier this year, DES administrators were ordered to keep their 1997 budget request at the same dollar amount--$396 million--as the previous year, without adjusting for population increases or demographics.

Carol Kamin, executive director of the Children's Action Alliance, labels that type of freeze criminal--and counterproductive.

"The budget is a values document," she says. "It tells us what we value and what's important. And in our state, for the past number of years, the budget has not valued children."

In the area of child welfare, severe cuts have been proposed for the Family Preservations Service, a highly successful program that offers intensive, in-home services to families whose children are at risk of foster-care placement because of abuse or neglect. The family-preservation budget will be cut in half.

According to the Children's Action Alliance, total state funds available for child-care subsidies also will be reduced--by $874,000.

These types of cuts run counter to the Republican emphasis on moving and keeping people off the dole.

For example, a recent DES survey asked clients what they would do if they stopped receiving child-care subsidies. Almost 20percent responded that they would request public assistance.

As Carol Kamin says, "They're cutting the very services that help keep families out of the system and keep kids alive--you know, family preservation, child-care subsidies, adoption subsidies."

DES has not requested funding in its budget to reduce the waiting list for home-based community services for the elderly or the developmentally disabled--another program aimed at reducing the cost of welfare. In fact, DES did not spend a million dollars appropriated during the past legislative session to serve clients on the developmentally disabled waiting list.

According to the DES budget request for the coming year, that million dollars had to be saved to fund mandatory programs in next year's budget.

State Representative Laura Knaperak, who fought for that appropriation, is furious.

"To some people, I sound like a flaming liberal, which doesn't give me a lot of Brownie points when I try to deal on other issues," Knaperak says. "So I stuck my neck out to do this, and then they don't fund it."

Now, Knaperak says, she'll hesitate before she asks for more money for DES.
"Quite frankly, I would have a very difficult time giving them more money. When you give them more money, you're rewarding them."

In November, the Arizona Legislature conducted a sunset review of the Department of Economic Security. After hearing testimony about the status of funding and services, legislators voted to renew the agency's charter and review it again in ten years.

Senator Mary Hartley, Democrat of Phoenix, was horrified. She wanted a review in five years. Her proposal was defeated, so she authored a minority report detailing the department's shortcomings.

The report read, "The audits and hearings over the past months reveal an agency in turmoil, with enormous problems, funding and staffing shortages, inconsistency and turnover in leadership, and in the midst of numerous uncompleted reforms and changes. To allow this agency to escape a full and complete review for ten years in the face of such chaos is negligent."

The review was also necessary "to examine the impact on this agency of some of the radical changes at the federal level, such aswelfare reform and block grants."

The specifics of federal welfare reform have yet to be resolved, but the basics are fairly well-known. Federal entitlement programs--like AFDC--will be turned into block grants, which simply means that states will be given a lump sum of money for a fixed number of years and will be allowed to--within limits--dole it out how they choose. States will not be required to offer matching funds, as they are now with most entitlement programs.

Some states, including Arizona, will be given modest supplements based on population growth. But analysts say the additional money will not meet the state's needs, and warn that extra welfare dollars won't be made available if a recession hits.

R. Kent Weaver, an economist with the Brookings Institution in Washington, D.C., says, "If the economy goes into a recession, then any additional funds that are needed to make up for an increased caseload will have to come out of the state budget."

The White House's most recent estimate, based on a May 1995 version of the U.S. Senate's welfare-reform plan, warns that 48,000 Arizona children would no longer qualify for AFDC. According to the analysis, Arizona would lose $366 million in federal funds under the Senate plan, including:

* $175 million in federal funding for AFDC, child care and emergency assistance.

* $66 million in federal funding for disabled children and their families. Fifteen percent of children with disabilities who currently qualify for Supplemental Security Income would have assistance cut off.

* $125 million in Supplemental Security Income assistance and other programs that serve legal immigrants.

And, after the welfare-reform debate ends, Congress will take up the reauthorization of the Older Americans Act, which provides funds for senior centers, legal assistance, meals and case management. Cuts are expected to be in the 9 percent to 13 percent range. Cuts of 10 percent to 20 percent also are expected in social-service block grants, which serve the elderly.

The states will have to make up the difference.
DES estimates that the 65-and-older population is growing faster in Arizona than anywhere else in the country, with the exception of Hawaii.

Late this fall, word came down from the governor: A flat budget is not enough. The Department of Economic Security has been asked to come up with a 5percent cut in its 1997 budget request, to help fund a tax reduction Symington would like the Legislature to pass.

Even Linda Blessing, the former auditor who now runs DES, realizes the budget cut would be devastating.

In a November 20 letter to Peter Burns, director of the Governor's Office of Strategic Planning and Budgeting, Blessing explained that the flat-budget requirement already had kept her agency from presenting a budget that reflects the community's needs.

To cut any further, she wrote, "will hinder the department's mission of assisting Arizonans in achieving their self-sufficiency.


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