The new federal budget-cutting bill could force Colorado to pay more to help its poorest families – something it has not done for years.
Under the bill, passed 216-214 Wednesday by the House of Representatives, the state could face stiff financial penalties.
At stake is a percentage of the approximately $142 million a year in federal public- assistant aid Colorado receives.
The cut could be as much as several million, state officials say, which Colorado would have to make up.
Federal rules require that half of all families on welfare and 90 percent of two-parent families be engaged in work-related activities.
In 2003, about 32 percent of all Colorado families on welfare rolls and 40 percent of two- parent households were involved in work activities, according to the state Department of Human Services.
Colorado, however, got a credit for cutting its welfare rolls. The bill changes how the credit is calculated and could adversely affect Colorado.
“We are very concerned about the work requirements,” said state human services spokeswoman Liz McDonough.
If Colorado can’t meet the standard, the federal government will reduce the amount of welfare funds, requiring the state to make up the shortfall.
The state contributes less than 1 percent of the $167 million in annual public assistance – the rest comes from federal and county governments.
The bill makes cuts to other programs, such as Medicaid, child care, child-support enforcement, foster care, student loans and disability assistance.
“There are some good things, but there are other matters of concern,” McDonough said.
Colorado and many other states that don’t meet the work targets under the federal Temporary Assistance for Needy Families – known here as Colorado Works – have received a break by lowering public-assistance rolls from year to year.
For the cuts in the welfare cases, they received a credit in the number of welfare families expected to be in work- related activities.
The cut was measured against 1997 welfare rolls, and Colorado took advantage, paring the number of welfare cases to 15,300 last year from 29,888 in 1997.
That drop in caseload was enough to offset the work requirements.
The budget bill, which President Bush is expected to sign, requires caseloads to be compared with 2005 levels.
That means Colorado would have to show a 50 percent decrease in the number of welfare cases next year.
That would require trimming about 7,500 cases at a time that the state has seen a four-year rise in the number of filings.
“Our energy is to try to meet the work percentage requirements,” said Kevin Richards, director of Colorado Works at the Department of Human Services.
“If we can’t, that would mean a shift in the financial burden, and for the moment, we don’t have the money to do that.”
In Denver, pushing more public-aid recipients into work programs could create another problem: children who will need day care, said Nan Morehead, legislative liaison at Denver Human Services.
“Unfortunately, there isn’t enough funding to handle the additional day- care needs,” Morehead said. “With pressure to get more to work faster, that will drive need to child-care funding.”
The new bill would also cut funding in key programs in the counties, such as child-support enforcement – which assures payments from parents to their families.
“This is a very big deal to us, and I imagine Colorado’s 64 counties will feel it,” said Kerin Dyer, manager of Jefferson County’s child-support enforcement program.
Jefferson County spent $3.6 million last year on child-support enforcement. It collected about $30 million, a 5 percent increase from the year before, for about 12,800 cases.
The budget bill could trim federal support for the program by $330,000.
Staff writer David Migoya can be reached at 303-820-1506 or dmigoya@denverpost.com.
