STATE PONDERS FEDERAL LAW BEFORE ENACTING WELFARE CHANGES

JEFFERSON CITY -- As soon as state officials unravel details of an 1,100-page document approved by Congress, welfare assistance as Missourians know it will be ending.

The nation's 60-year-old welfare entitlement program will be replaced by a number of changes and innovations. Emphasis will be placed on required work provisions and payment limitations that can't exceed five years for most of the more than one-half million Missourians receiving some form of public assistance.

First, officials in the Department of Social Services, the state's huge welfare agency, must learn how the new law will impact several segments of assistance recipients. At the start of the current fiscal year July 1, 545,200 Missourians were receiving food stamps, 225,700 were getting payments under Aid to Families With Dependent Children and 591,059 had been ruled eligible for Medicaid, the federal health-care system for the poor.

Those three basic assistance programs, which cost Missouri $2,941,800,000 each year in federal and state funds, are broken down this way: $2.2 billion for Medicaid; $481.8 million for food stamps; and $260 million in cash payments for AFDC-eligible families.

In addition, the Department of Social Services funds numerous other assistance programs, one of the most recent being back-to-work training for AFDC recipients who have been moved off welfare roles and into private-sector jobs. The remainder of the DSS' annual $3.9 billion operating budget is spent on other assistance programs, personnel, equipment, supplies and the cost of maintaining welfare offices throughout the state.

Although the welfare bill that moved through Congress last week was described as one that ended entitlements, the final version does little to change the basic Medicaid program, which pays medical costs and extended-care charges for almost 600,000 Missourians. The cost of the program, with expanded oversight provisions, would only move downward as more AFDC recipients are moved to private sector employment.

It is on the AFDC side that most federal funding cuts will occur, according to DSS experts in Jefferson City. Currently, the maximum AFDC grant for a mother and two children is $292 per month. Forty-one percent of AFDC recipients have received benefits for two years or less, while 19 percent have been getting state welfare checks for two to four years.

Officials say another 40 percent have been getting checks for four or more years. These percentages will be reduced in the coming months because of state-funded work-training classes and restrictive provisions in the new federal legislation.

Future AFDC payments to Jefferson City from Washington will be in the form of block grants that require states to write their own eligibility rules within federal guidelines set out in the new law. Missouri will be able to determine how much each AFDC family receives but the state will receive only a fixed amount of U.S. funds and must decide if it wishes to increase payments through a higher infusion of state revenue.

The new law, however, places an overall time limit of five years for most AFDC recipients, although there are provisions for a small percentage of hardship cases. The new law also sets a deadline of two years for AFDC recipients to move from monthly payments to private- or public-sector jobs. A final change in federal legislation includes a mandate for women with children as young as 6 to meet the work requirements.

The new law also denies welfare assistance to legal aliens who are not citizens, a measure that DSS officials say will have much less impact in Missouri than in states like Texas, Florida, California and New York.

Although state welfare officials have yet to compute exactly how many Missourians will be affected by the new law, an official in the Congressional Budget Office says the new legislation will affect most of the 12.8 million Americans now getting AFDC payments and almost all of the 25.6 million receiving food stamps. Payment alterations will affect more than one-fifth of all families with children in the United States.

Savings estimates are still hard to come by, but one state official has computed some figures that are subject to change when Congress approves funding for the law. The Congressional Budget Office has computed savings of approximately $60 billion over a five-year period. Computing Missouri's proportionate part of this federal saving would indicate a five-year shortfall of $1.2 billion or $240 million a year through fiscal 2001.

Anticipating some form of welfare reform this year, this spring's Missouri General Assembly approved a $43 million set-aside to cover Washington's funding shortfalls when the federal budget begins in two months. That may cover only 25 percent of the money the state will have to spend to make up for the smaller federal payments, although the first full year of federal savings will not occur until fiscal 1998.

Still to be computed, however, is how much Missouri will have to spend, over and above the payment shortfalls from the federal treasury, for mandated work-training programs for AFDC recipients. Wisconsin, which has pioneered welfare-to-work programs, expects to outspend its old welfare budget by $102 million in fiscal 1997 for training programs.