Auditor General Finds More Waste and Fraud in Pennsylvania Welfare

A new report from Pennsylvania Auditor General Jack Wagner finds that the Special Allowances program in the Department of Public Welfare is "rife with mismanagement and potential for fraud."  The audit found that 45% of the cases examined had insufficient documentation to justify payment.

Applied over the entire program, this would represent tens of millions in wasteful spending/potential savings.

Combined with waste and fraud in Medicaid, LIHEAP, and other programs, it is easy to see why the Auditor General thinks Pennsylvania can balance the state budget without tax hikes.

Illegal Immigration in Pennsylvania

Yesterday, Rep. Metcalfe held a press conference promoting the National Security Starts at Home reform package. The bills would make it more difficult for illegal immigrants to live and work in Pennsylvania. Metcalfe estimates that illegal aliens cost taxpayers $285 million annually. Much of this cost comes from the free medical and social services they receive.

Faced with the complicated legal immigration process (see this chart from Reason) it’s no wonder immigrants cross the border illegally and then migrate to states with extensive welfare systems including Pennsylvania. If state government officials concentrated on being responsible stewards of taxpayer money, instead of running inefficient charities, we could decrease the number of illegal immigrants flocking to the Commonwealth.

For more on welfare in Pennsylvania click here.

Why state governments spend too much

A report from the Rockefeller Institute at SUNY (news release) looks at state and local government spending on social welfare.

After adjusting for inflation, they found that expenditures tripled from 1977 to 2006.  In terms of "per poor person" (their primary focus) welfare spending by state and local governments increased from about $4,500 to $10,000 - more than double, after inflation. 

In other words, not only did we have massive spending increases over and above inflation, but we had more "poor people" (the War on Poverty clearly failed) and spent more per person.

What does the Rockefeller Institute call this dramatic spending increase?  The "New Retrenchment."  Only social scientists could conclude a tripling of state spending was a cutback.

Welfare Reform: PA gets poor grades

The Heartland Institute has a new report, Welfare Reform after Ten Years: A State-by-State Analysis (for PDF version click here) ranking the states both on welfare outcomes - through 2006 - and welfare reform policies. Pennsylvania ranks near the bottom or in the middle on most measures.

• Overall: 41st (F)
• Anti-Poverty Success: 38th (D-)
• Decline in TANF participants: 57.6% (35th)
• Change in Poverty Rate 0.6% increase (31st)
• TANF Workforce Participation: 26.1% (41st)
• Change in Unemployment Rate: -0.4% (21st)
• Change in Teenage Birth Rate: -7.6* (38th)
• Reform Policies: 39th (D-)

Do the latest welfare numbers stack up?

AP Story covers the latest news release from the PA Department of Public Welfare claiming lowest number of welfare recipients in nearly 50 years.

This rosy analysis doesn't seem to jive with our recent commentary on welfare in PA, so where is the problem.

First - the AP story and news release look only at TANF (formerly AFDC). While this is what people often mean when they talk about "welfare" for the poor, the department of Public Welfare has many other programs to provide assistance to the poor - Cash Grants, Energy Assistance, SSI Grants, Child Care. The largest program is Medical Assistance (Medicaid) - which has 10 times the number of enrollees as TANF, and continues to grow. This is important to point out when evaluating how many individuals are dependent on government.

Second, the new release doesn't cite national trends as part of the reason for the reduction in caseloads. According to the latest national data (which is through Dec. 06, and doesn't include the latest numbers from DPW), the number of TANF families in PA grew by 3% since Jan 2003, vs. the nationwide decline of 14%.

Third, DPW selectively sites the decline since Oct 2005 - when TANF enrollment peaked. But Oct 2005 represented a dramatic increase in TANF enrollment since Gov. Rendell took office, even as nearly every other state saw declines. And the new data from DPW indicates that are still more recipients (they don't identify the number of families ) than in January 2003.

Finally, the work participation data is suspect, and DPW is not providing many details. In 2004, Pennsylvania ranked last in work participation - with an 8% participation rate. In 2006 PA's work participation rate was 32%. Now DPW is claiming a 52% participation rate. But fewer families are participating in work than in 2006. It is true that the total number of families in TANF declined, but that does not explain the participation rate.

DPW states that 12,737 families are particpating in work requirements (jobs or job training), up from 4,000 in 2004, but down from 17,000 in 2006. They must be dividing by 24,684 to get 52%. Yet there are an estimated 50,000 families with adults in TANF - meaning 30,000 families are excluded from their calculation (See below). In the past, only about 4,000 families were excluded. So it appears DPW is simply exempting familes from work participation requirements to get a higher rate.

Welfare state growing

Associated Press story on the growth of Welfare rolls. While TANF cash grants have declined nationally under welfare reform, Medicaid and other programs have grown. Today, one in six people in the US rely on some form of government aid.

The Stubborn Welfare State

Robert Samuelson looks at where tax dollars really go. The charts tell it all.

PA lagging in Welfare to Work

Pennsylvania is among a handful of states that need to improve the number of welfare recipients working, the AP reports. Under new federal law, states are required to have 50% of TANF recipients in the workforce, with penalties going into effect in 2009. This would require the Pennsylvania Department of Public Welfare to increase the work participation by 220%.

DPW claims they currently have a 32% participation rate, while the federal government's latest estimates put as at under 20%. The latest full national report, from 2004, ranked Pennsylvania last among the 50 states, with only a 7% participation rate.

Welfare cuts [or welfare EXPANSION by Rendell] have counties scrambling

Philadelphia Inquirer story "Welfare cuts have counties scrambling" are missing THE major reason that counties like Bucks and Montgomery will be raising taxes -- the dramatic increases in welfare recipients by the Rendell Administration.

The irony, of course, is that Gov. Rendell re-sloganed PA to "The State of Independence" but has turned the commonwealth into "The State of Dependents".

As the story notes:

Welfare rolls were initially relatively low, so the state had extra money. "We were able to build up quite a surplus," said Stacey Ward, spokeswoman for the state welfare department.

Some of that unspent funding went to the counties to help pay for child-welfare programs, such as delinquency prevention, along with juvenile-detention and probation expenses.

Then the surplus ran out, in part because welfare enrollment increased. In December, 318,976 people received cash assistance from the state, a 13 percent increase from two years earlier.

That meant that, statewide, counties had to cope with a reduction in state funding from $293 million to $68 million this year.

In the end, either property taxes will increase because of the massive expansion of welfare dependents or these service will have to be cut. Get ready for another round of rallies in Harrisburg!

Privatization of Welfare Administration

An interesting study of how Texas is contracting out many technical aspects of their public assistance offices and streamlining the application process: NCPA Brief Analysis #539, A New Frontier for Welfare Reform.

Savings are estimated to be $100 million annually.