Welfare and Children's Services
Part 3: Questions legislators should ask

Providing crucial public services for vulnerable and needy individuals in our state and communities is an important job and should be done as efficiently and effectively as possible. That is why state legislators should carefully consider the merits of putting specific government services up for competitive bid. While government may be responsible for ensuring a service is provided, it may not always be the best at delivering the service. Often private companies with well-established expertise can provide a service far more effectively than government can.

Many states around the nation have adopted competitive bidding to provide welfare and children's services. Saving money isn't the only benefit; studies have confirmed an increase in the quality of services provided to those in need as a result of healthy competition among providers.

While some special interest groups want to ensure that no current state employees are displaced by competitive contracting, lawmakers should consider first and foremost the best interests of taxpayers and the individuals in need of important services.

Welfare Programs
Federal welfare reform law established in 1996 (in the form of the Personal Responsibility and Work Opportunity Reconciliation Act) opened the door for states to put all of their welfare services out for competitive bid, including, for the first time, eligibility determination. This resulted in many states pioneering numerous reforms that have reduced the nation's welfare caseloads.

While Washington has made progress reducing its welfare caseloads, other states have had more rapid success. Along with current contracts our state has awarded for specific services, additional progress can be made if the state considers contracting out entire programs.

For example, the entire WorkFirst Employment Program could be put out for competitive bid. State law (RCW 74.08A.290) already permits contracting for some WorkFirst activities and should be fully expanded to include all welfare programs. There is no need for the state to run any day-to-day operations of programs if meaningful oversight is combined with strong performance standards.

A 2002 study completed by the Cato Institute concluded that between 1996 and 2000 states "with the strongest sanctions and lowest benefit levels had the most success in reducing their caseloads." Washington could follow the lead of other states to reduce welfare caseloads, save taxpayer dollars, and target services to those who actually need them by enforcing meaningful sanctions. Individuals who violate eligibility requirements should be subject to lower benefits and other appropriate penalties.

Nationally, three types of sanctions are used. They come in to play (generally in the form of reduced benefits) if welfare recipients fail to meet work requirements.

1) Full Family Sanctions: Implemented at the first eligibility infraction with an entire family benefit check being reduced.

2) Graduated Sanctions: A portion of a family benefit check is reduced for the first infraction, with the entire benefit check sanctioned after multiple infractions.

3) Partial Sanctions: Only the adult portion of a family benefit check is reduced, even after multiple infractions.

Washington currently imposes partial sanctions, but should consider the merits of adopting full and graduated sanctions.

Children's Services
Sometimes called "child welfare services," these include child support and adoption services, among others. As other states have shown, these services can also be bid successfully.

New Mexico has established online child support forms, which allow immediate access to information and have resulted in significantly less caseload work for staff. In some cases, entire transactions can be accomplished with no staff. Kansas has contracted all of its child welfare services (with the exception of abuse and neglect investigations) to a private company. Florida is moving to privatize child welfare services outright in the wake of public scandals resulting from the agency's loss of numerous children in its
care.

It can be difficult to hold agencies responsible when mistakes are made, and taxpayers often end up paying the cost of tort claims brought against the state. With carefully constructed performance-based contracts, our state would have more time to concentrate on outcomes, rather than simply funneling clients through its system. If a contractor fails to do a job well, he can be held accountable; the contract can be terminated and liability can be assigned for wrongdoing. In addition, if contractors or agencies do well, they can be rewarded.

The mission statement of Washington's Economic Services Administration (ESA) is "to enable individuals and families in need to achieve economic and social well-being." In fact, ESA has already entered into some private contracts. This practice should be extended on a program-wide scale.

Conclusion
Government's job is to provide limited essential services as efficiently and effectively as possible. Taxpayers deserve to know their dollars are being spent well, and individuals in need of aid will be better served if competition and accountability are part of the system. Service delivery must never be compromised to protect a special interest group. With that in mind, legislators should evaluate current services for potential cost savings and increased quality, starting with a review of successes from other states.

Prepared by Jason Mercier, Budget Research Analyst (360) 956-3482

Evergreen Freedom Foundation P.O. Box 552, Olympia, WA 98507 Phone: (360) 956-3482, Fax: (360) 352-1874 Email: effwa@effwa.org