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In March 2004, DCFPI issued The Untold Story of the DC Budget, a report on local spending trends in DC government between 1990 and 2004.  It found that despite recent increases, the District’s local budget in 2004 was only slightly larger than it was in 1990, after adjusting for inflation.  The analysis also found significant shifts in funding priorities during this period, including serious reductions in services targeted on low- and moderate-income residents — such as affordable housing, employment and social services. [1]

This analysis is a follow-up report to The Untold Story that focuses on human services funding trends and the impact of funding changes on services.  (A separate analysis reviews the impact of affordable housing funding changes.[2] )  This review finds that despite some selected increases in recent years, funding for the Department of Human Services has declined steeply since 1990.  The funding reductions have affected a broad range of services for low-income residents.

• In 1990, the Department of Human Services spent $311 million in local funds.[3]  (All figures are adjusted for inflation to equal 2006 dollars.)  The proposed FY 2006 local budget for the Department of Human Services is $218 million, or 30 percent lower than the 1990 level.[4]

• Federal funding for human services in DC rose during this period but not enough to offset the local funding decline.  The proposed total DHS budget for FY 2006 is $408 million, or 16 percent lower than expenditures in FY 1990, which totaled $484 million.

Tracking funding changes by type of service for the entire period from 1990 to 2006 is difficult because the structure of the DHS budget was changed significantly in fiscal year 2003.  For example, funding for the TANF cash assistance to low-income families with children is now included in the “income assistance” budget category, along with other cash assistance programs.  Nevertheless, comparisons through FY 2002 are possible and in some cases, comparisons with the FY 2006 proposed budget can be made.

This analysis shows that the cut in funding for DHS was spread over a number of program areas.  Many of the reductions were enacted in the mid-1990s, during the District’s severe fiscal crisis.  In some cases, the cuts also were made in response to concerns over program management and effectiveness.  Nevertheless, many of the reductions resulted in a decline in benefit levels, a decline in the number of residents receiving services, or both.  The cuts include:

• elimination of a program that provided emergency assistance to 13,000 families and individuals;

• A 40 percent reduction in the value of cash assistance for families with children, after adjusting for inflation;

• a reduction in cash assistance for elderly residents and residents with disabilities;

• a reduction in homeless services funding, including a decline of more than 80 percent in the number of apartment-style shelter units for homeless families with children; and

• elimination of homemaker and chore services for more than 2,000 elderly residents.

The other major program areas within the Department of Human Services are child care and services for residents with disabilities or mental retardation.

• The proposed local budget for child care in FY 2006 — $41.6 million — is about 21 percent higher than in 1990 —$34.5 million, after adjusting for inflation to equal 2006 dollars.  The District expanded its child care program in the late 1990s using federal funds, but recent reductions in available federal funds have forced the District to scale back the expansion.  The number of children in subsidized care rose from 7,000 in the early 1990s to roughly 24,000 in 2002, but fell to 13,000 in 2004.  The District has increased local funding to help offset the shortfall, including a proposed increase for FY 2006 that will allow roughly 18,000 children to receive assistance.  Nevertheless, the number of children served in 2006 would remain well below the 2002 peak.

• Local funding for services to residents with physical or mental disabilities fell from $70 million in FY 1990 to $38.4 million in FY 2005.[5]  Funding has increased since 2002, with a proposed local budget of $58.6 million in FY 2006.  Because budget categories within the Department of Human Services have changed significantly since 2002, it is not clear whether the FY 2006 figure is entirely comparable to the 1990 figure, but it suggests that funding for these services remains lower than in 1990.

It is worth noting that local funding for the Department of Human Services increased significantly between FY 2002 and FY 2005, from $182 million to $218 million.  As noted, it is difficult to determine the nature of the increases given the changes in the structure of the DHS budget in FY 2003.  Nevertheless, it appears that most of the $36 million funding growth came from the increase in child care subsides and in services for people with mental or physical disabilities reflected in this analysis, as well as from the re-establishment of a cash assistance program for non-elderly adults with disabilities.  (This is discussed in more detail below).  The increase in funding since 2002 does not appear to have offset the program reductions discussed in this analysis.

Funding declines by program area and the impact on services are discussed below.

 

Emergency Assistance

In 1990, the District spent $12 million in local funds to provide one-time emergency assistance to families and individuals.  (All figures in this analysis are adjusted for inflation to equal 2006 dollars.)  This included aid to residents behind on rent, mortgage, or utility bills, temporary storage of household items for residents facing eviction, and one-time help for needs such as furniture or clothing. Emergency assistance is designed to help families and individuals weather temporary crises and to prevent such crises from leading to more significant problems, such as homelessness.  Some 13,000 households received emergency assistance in 1990, with average benefits of $990 (a portion of the benefits were covered by federal funds.)

The emergency assistance program was scaled back and ultimately eliminated in the 1990s.  Since elimination of this program, emergency assistance has been provided in a limited and, in some cases, ad hoc fashion.  The primary source of funding has been the federal Emergency Food and Shelter program.  In FY 2003, the District’s allotment for this program was just $210,000.  The DC Emergency Assistance Fund has also used some federal Emergency Shelter Grant dollars to provide funds to prevent homelessness.  In FY 2003, the ESG amount was less than $250,000.

These sources meet only a small share of the need.  DC’s social services phone hotline, Answers, Please!, received over 9,000 calls for emergency food or housing assistance in a recent 15-month period.  The Answers, Please! annual report for 2000 noted that requests for emergency assistance accounted for one-third of its unmet needs — i.e., requests for which it was not able to provide a referral.

 

Cash Assistance and Welfare-to-Work Services for Families with Children

In 1990, the District spent $94 million in local funds on services for families with children receiving cash assistance and to administer other low-income programs such as food stamps.  By 2002, District expenditures for these services totaled $76 million, a decline of 18 percent.

A significant portion of the decline can be attributed to declines in cash assistance payments.  This, in turn, is due in part to a decline in the number of families receiving cash assistance from 17,800 in 1990 to 16,500 in 2002.  (The number of welfare recipients has risen to slightly above 17,000 since then.)  More significantly, the decline in local funding for cash assistance reflects a reduction in the value of benefits for low-income families with children.  Welfare benefits were cut twice in the 1990s, which means that benefits available to needy families are lower than in 1990, despite huge increases in housing and other costs.  After adjusting for inflation, the purchasing power of welfare benefits today is far lower than in 1990.

• In 1990, the maximum benefit for a family of three was $409 per month.  (This figure is not adjusted for inflation.)

• The maximum benefit was reduced to $379 a month in 1997 and it has not been adjusted since then.  This totals $4,548 per year, or less than 30 percent of the poverty line for a three-person family.  DC’s maximum welfare benefit is now lower than in 30 states.

• If the 1990 benefits had not been cut but had instead been adjusted for inflation each year, the maximum benefit for a family of three would be $623 per month in 2006.  (That still would be lower than in eight states.)  The current benefit is nearly 40 percent lower than the inflation-adjusted 1990 benefit.

 

Cash Assistance for Elderly Residents and Residents with Disabilities

In 1990, the District spent $28 million in local funds on “general public assistance” programs, which provided cash assistance to various groups, including:

• residents with disabilities who were not receiving federal disability aid;

• elderly and disabled residents receiving federal Supplemental Security Income (the District payment is a supplement to federal benefits); and

• adults caring for children who were not eligible for AFDC.

Overall funding for these sets of programs fell to $10.5 million in 2002.  Since 2002, funding has increased roughly $4 million.  Yet even considering this increase, local funding for general public assistance in FY 2005 is roughly half the 1990 level.

• SSI supplements for elderly residents and residents with disabilities fell from $7.2 million in FY 1990 to $3.6 million in FY 2002.  This partly reflects elimination of SSI supplements for low-income elderly residents, which totaled $530 per year for couples and $265 a year for singles.  It also reflects the fact that benefits for those continuing to receive supplements have not been changed since 1990, and thus have declined significantly in inflation-adjusted value.

• The decline in funding also reflects the elimination in the 1990s of the “general public assistance” program for non-elderly adults with temporary or long-term disabilities.  Prior to its elimination, the program served 2,500 residents.  In 2003, a new program was established, Interim Disability Assistance, to assist a portion of the residents who had been served by GPA.  The IDA program is limited to residents with permanent disabilities who have applied for federal disability benefits.  IDA’s proposed FY 2006 budget of $4 million would allow it to assist roughly 1,800 residents, or most of the estimated 2,000 residents who are eligible.

• The maximum IDA benefit for a single person — $239 per month — is 39 percent lower than the maximum GPA benefit in 1990 — $392 per month after adjusting for inflation to equal 2006 dollars.

 

Homeless Services

In 1990, local funding for homeless services equaled $38.3 million.  Local funding for homeless services fell to $12.7 million in FY 2002 and has been increased modestly since then, to $13.5 million in FY 2005.  The FY 2006 budget would provide the first increase in homeless services in recent years, to $18 million.  (This $4 million increase may be partly offset by a $1.7 million reduction in federal funds.)  Even with this increase, local funding will be 54 percent lower than in 1990 after adjusting for inflation. 

The decline in support for homeless services is most evident in the area of shelter assistance for families with children.  In the mid-1990s, the District administered roughly 600 apartment-style units for families, while today it operates only 110.  (The District serves some families in congregate-style settings, although this is in violation of District law.)  The demand for family shelter assistance, by contrast, has increased sharply in recent years.  Between 2000 and 2004, the number of families with children seeking shelter rose from 1,276 to 3,326.  Some 200 families are now on a waiting list for shelter.

The reduction in funding for homeless services also reflects the elimination of a right to shelter that had been established in the 1980s and efforts to improve management of homeless service programs.  The right to shelter contributed to a substantial increase in expenditures on homeless services in the late 1980s.  This right was eliminated in 1990 largely in response to the rising costs.

In addition, some of the District’s homeless services in 1990 were provided through contracts with for-profit shelters, some of which had serious physical deficiencies and other problems.  The cuts in homeless funding partly reflect the closure of some of the worst shelters.

Finally, it is worth noting that federal funding for homeless services has increased since 1990, although these funds largely must be used for specific services and not for emergency shelter.

• Since the late 1990s, the District has devoted a portion of its TANF block grant to homeless services.  In FY 2004, the amount was $5.1 million.

• The TANF funds devoted to homeless services include $1.7 million from TANF bonuses the District has received in recent years.  The major component of the bonus funds is likely to be eliminated when federal TANF legislation is reauthorized.  This could mean a $1.7 million reduction in federal funds for homeless services in DC in FY 2006.  This would offset a portion of the proposed $4 million increase in local funds.

• The District applies each year for a series of competitive federal grants through a “Super NOFA” process.  The amount the District receives under this process varies from year to year.  In FY 2005, the amount is $17 million.  These funds must be used for specified purposes or specific populations, such as transitional housing or housing with supportive services.  They generally cannot be used to support emergency shelter.

 

In-Home Services for the Elderly

In 1990, the District spent $11.4 million to provide a variety of services to elderly adults and others needing support in the home. This funding was cut to $2.5 million in FY 2002.  The cuts included elimination of two programs that had helped thousands of elderly residents to remain in their homes.

• In FY 1990, some 1,959 residents received chore aid services, which included grocery shopping, laundry, cleaning, and other services.  This service is no longer provided.

• In FY 1990, some 1,128 residents received homemaker services, which included chore aid as well as personal care assistance.  This service is no longer provided.

 

Child Care

The proposed local budget for child care in FY 2006 — $41.6 million — is 21 percent higher than in 1990 —$34.5 million, after adjusting for inflation to equal 2006 dollars.  Local funding level for child care was raised $10 million in FY 2005 — the first local funding increase in a number of years — and the FY 2006 proposed budget includes an additional $6.5 million increase.  The substantial increase since FY 2005 offsets a decline in funding that had occurred between FY 1990 and FY 2004.

It should be noted that the District has expanded its child care program since the late 1990s as a result of increased federal funds from the federal child care block grant and the TANF block grant.  Recent reductions in available federal funds, however, have forced the District to reduce the number of children served and create a waiting list.

• Between 1998 and 2002, the number of children in subsidized care rose from 6,000 to roughly 24,000.

• Since 2002, the number of children in subsidized child care has fallen, to roughly 17,000 in FY 2005.  The proposed 2006 budget would allow roughly 18,000 children to be served by DC’s child care program, or 58 percent of an estimated 31,500 eligible children.

• The recent increases in local funding for child care partly offset a decline in federal funding.  The number of children served by the child care subsidy program in 2006 is expected to remain well below the 2002 peak.

 

Funding Increases Since 2002 Have Not Offset Most of the Cuts

As noted earlier, the structure of the DHS budget changed substantially in FY 2003, when the agency adopted a “performance-based budget” format.  While the basic structure of the agency did not change, budget categories were changed to reflect the types of services provided, such as child care or employment training, rather than tying budget categories to divisions within DHS, such as the Mental Retardation and Developmental Disabilities Administration.

The change in the budget structure makes it difficult to track changes in funding for various DHS services since FY 2002.  This is significant because local funding for DHS increased from $182 million in FY 2002 to $218 million in the proposed FY 2006 budget.  Nevertheless, it is possible to identify most of the funding changes.

• Local funding for child care in FY 2005 is $17 million higher than the FY 2002 level.

• Funding for services for residents with mental retardation or developmental disabilities increased $15 million between FY 2002 and FY 2006.

• The re-establishment of a temporary cash assistance program for adults applying for federal disability benefits added $4 million to the local budget in FY 2006.

Together, these funding changes appear to account for the local funding changes between FY 2002 and FY 2006.  Because these changes are reflected elsewhere in this analysis, it does not appear that the increase in local funding since 2002 has offset the funding declines noted above.

 

Conclusion

These findings indicate that support for a broad array of human service programs was cut deeply in the 1990s, resulting in elimination of several programs and substantial reductions in others.  Many of the cuts adopted in the 1990s have not been restored in recent years as the District’s finances have improved, which means that services for thousands of low-income residents remain lower than in 1990.  These findings suggest that additional support for selected human services that have been cut is warranted.

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End Notes:

[1] DC Fiscal Policy Institute, The Untold Story of the DC Budget: Overall Spending Has Grown Only Modestly Since 1990, But Support for Services to Low-Income Residents Has Fallen Sharply, March 16, 2004 (http://www.dcfpi.org/?p=51).

[2] See DC Fiscal Policy Institute, Trends in Funding for Affordable Housing in the District of Columbia, March 2005 (http://www.dcfpi.org/?p=53).

[3] In 1990, DHS services were provided under a large umbrella agency that also provided health, mental health, and foster care services.  This analysis focuses solely on the services provided today by the Department of Human Services and funding for the same services in 1990.

[4] This analysis does not include juvenile justice services, which were transferred to a separate agency in 2005.  This figure includes $2 million in “contingency” funds recently awarded to DHS.  The contingency funds were not included in the basic DHS budget for 2005.  Instead, the 2005 budget indicated that these funds would be available only if the agency provided additional documentation that the funds were needed to deliver services.

[5] This includes funding for the Rehabilitative Services Administration, the Mental Retardation and Developmental Disabilities Administration, and in 1990, the Habilitation Services Administration.

This report was posted on Monday, April 18th, 2005 and is filed under All Publications, Budget, Income & Poverty.