Economy Down, Need Up
When the economy is down and government funds are scarce, the need for assistance often goes up. Rainy day funds and increased efficiencies could help provide more when some have less.
Go anywhere and talk to anybody in human services these days and there's just no avoiding the fact that human service systems are massively preoccupied by increasing demand. In a time of tighter and tighter budgets, budget cuts are taking their toll inside and outside of human services departments.
This is not a recent phenomenon. In fact, money for human services has been cut substantially over the past three decades. Those cuts are laid out in detail in a recent report by the Nelson A. Rockefeller Institute of Government.
As can be inferred by the title, The Decline of States in Financing the U.S. Safety Net: Retrenchment in State and Local Welfare Spending, 1977-2007, the report doesn't even cover the years of the current and ongoing meltdown of state budgets; things have only gotten worse.
The report does, however, include some statistics through 2009, including the nation's unemployment rate, which more than doubled from 4.9 percent to 10.2 percent between October 2008 and October 2009. It was down slightly in July 2010, to 9.5 percent, but state budget woes continue unabated coast to coast and there's no obvious turnaround on the horizon.
While spending on social welfare porpoised along between 1977 and 2007, significant cuts started to show up in 2001-2002 budgets, with cuts in Medicaid leading the way. Reductions in cash assistance have been well documented in the wake of 1998 welfare reform, as massive numbers of people were washed off the welfare rolls.
The bottom line is pretty straightforward: When the economy goes bad, tax revenues crash and spending on social welfare gets frozen or cut -- all while human services need increases dramatically.
As noted in a recent paper on "emerging populations" in human services by Marcia Calicchia, there has been a run recently on food stamps, Temporary Assistance for Needy Families and homeless shelters by people who've never before interacted with any of those systems.
This counter-cyclical nature of human services spending versus actual social need is, of course, all too familiar to those in the business. In fact, a number of human services officials I've spoken with recently have floated the notion of creating special "rainy day funds" just for human and health services, a pot of money that grows in good times and then can be tapped when economies go rotten.
It sounds like a good idea, but clearly would be a political hard sell -- especially in this fiscal climate -- not to mention the fact that when economies do go bad, state legislators have a very bad habit of picking the lock on so called "locked boxes."
Until this year no state had tried to directly address this counter cycle. But just this summer a law went into effect in Connecticut that at least tries to.
The new law -- An Act Concerning Children in the Recession -- puts the state's Child Poverty Prevention Council in charge of responding "within available appropriations" to:
- mitigate the long-term impact of economic recessions on children;
- provide appropriate assistance and resources to families to minimize the number of children who enter poverty as a result of the recession;
- reduce human and fiscal costs of recessions, including foreclosures, child hunger, family violence, school failure, youth runaways, homelessness, child abuse and neglect.
The operative language here is, of course, "within available appropriations," language that would suggest the bill has more to do with sound than fury. But it does direct the state to do things like develop a streamlined application process for multiple services, allow more applicants to apply for services online and it directs the department of human services to cooperate with other agencies in helping kids.
Pushing for increased efficiency in health and human services systems, of course, will take more than passing a nine-page bill exhorting state officials to step up in bad times. Clearly the General Assembly is going to have to ride herd on the state's human services bureaucracies if that's truly going to happen.
There are several Connecticut legislators who seem determined to do that, including Democrat Diana Urban, co-chair of the Select Committee on Children and one of the bill's co-sponsors. She describes the series of field hearings that were held around the state in advance of the legislation as "heart wrenching." "We had one woman crying because she couldn't get help because she 'wasn't a drug addict or alcoholic or mentally ill,' and saying that she wished she was so that she could get help for her family."
Urban is the first to acknowledge that the bill isn't going to magically solve the countervailing problems of reduced revenues and higher need that arrive with recessions. But the bill does at least attempt to compel state agencies to step up, including focusing on maximizing federal dollars. Connecticut, for example, is dead last among states in getting eligible kids free breakfasts. "We have been fighting with the Department of Social Services over the fact that we're leaving a lot of federal money on the table," says Urban.
It's unfortunate, of course, that a legislator should have to fight with a bureaucracy over pursuing some of the more obvious strategies for streamlining human services systems, along with wringing the most out of federal resources. But maybe the bill will spur the bureaucracy to think harder about higher performance. And maybe it will also inspire other state legislatures to at least overtly acknowledge that when economies go south, a lot of people's lives go south along with it, and a lot of kids get hurt in the process.