Chairman Brown and other members of the Committee, thank you for the opportunity to testify today. My name is Ed Lazere, and I am the executive director of the DC Fiscal Policy Institute. DCFPI engages in research and public education on the fiscal and economic health of the District of Columbia, with a particular emphasis on policies that affect low- and moderate-income residents. I appreciate the opportunity to testify on this important issue.
The recent news that the Summer Youth Employment Program is yet again over budget and the plan to use TANF funds to fill the shortfall raise several concerns.
First, there is no justifiable reason for the program to be over-budget. The program exceeded its budget for both 2008 and 2009. Because the costs associated with SYEP are relatively simple and well understood, the Mayor and the Department of Employment Services could have structured the program this summer to keep within its budget.
For the past several years, DC’s summer youth employment program has been funded with unsustainable budgets given its number of participants and length of the program. In 2008, the city spent $55 million to employ about 20,000 youth for nine weeks, overspending the approved budget by a whopping $30 million. Last year, the program cost $41 million. Simple math would show that $22.7 million wasn’t going to be enough to pay for the estimated 20,000 youth enrolled this year, even if the program was shortened from nine to six weeks. I understand that the Chief Financial Officer determined that the money for youth salaries ran out after three and a half weeks of the six-week program.
The choice by the Fenty administration to continue to have an open-enrollment policy thus set the Summer Youth Employment Program to run over its budget again. That is unfair to the kids, and unfair to all of us. Honest and accurate budgeting is always important, but it is especially crucial in tight budget times like we’re facing now.
A second concern is that operating such a large Summer Youth Employment Program makes it hard to create a high-quality experience for all participants. As my colleague Martha Ross of Greater Washington Research at Brookings has noted, DC’s large summer jobs program makes it hard to find meaningful placements and creates substantial management and oversight challenges for DOES that end up consuming much of the agency’s energy. The overly large Summer Youth Employment Program consumes a large share of DC’s workforce development resources and makes it hard to fund other services.
A third concern is that the Fenty administration wants to cover the shortfall by using $8.4 million in federal stimulus dollars under the TANF program, funds that the Department of Human Services had planned to help low-income families weather these difficult economic times by providing money for shelter and basic necessities.
By taking TANF stimulus funds to use to cover cost overruns in the Summer Youth Employment Program, the Mayor is placing vulnerable families at further risk.
From FY 2009 to FY 2010, the city cut $12 million from homeless services by diverting TANF block grant funds that had in the past been dedicated to homeless services, to other programs. Once this funding cut had been discovered, the Department of Human Services committed to not reduce funding for homeless services during hypothermia season and to pursue TANF stimulus funding to make up the shortfall in both 2010 and 2011.
The Department of Human Services also proposed to use TANF stimulus funds for other important purposes, including upgrading its TANF case management system and expanding employment and training options for TANF recipients. The department has been seeking to improve its case management system for several years, putting case records online, allowing recipients to seek services at any TANF center, and making it easier for case workers to access files. And the Department of Human Services has undertaken process this year to overhaul TANF employment services as contracts for these services expire and need to be redone. Rather than simply continue the current “work-first” approach for most recipients, the Department is considering ways to better assess TANF recipients’ needs and offer a wider range of education and training options to help recipients move to work.
The diversion of TANF stimulus funds to the Summer Youth Employment Program places funding for these initiatives at risk. The potential loss of funding for homeless services is disconcerting, considering that family homelessness has increased by more than a third since 2008 and there are now 540 families on the waiting list for emergency shelter. Failing to improve TANF employment services will make it harder for DC residents to take advantage of job opportunities that will come when the economy recovers.
I urge the Council to reject the Mayor’s request to extend the Summer Youth Employment Program and recommend that the Council work with the Mayor to return the $8.4 million in TANF Emergency Contingency Funds to their original intended uses and to find other sources of local funds to fill the SYEP budget’s gap.
Thank you for the opportunity to testify, and I am happy to answer any questions.