FISCAL NOTE TO

SENATE, No. 684

STATE OF NEW JERSEY

DATED: FEBRUARY 28, 1997

      Bill Summary:

      Senate Bill No. 684 of 1996 establishes a mandatory community service pilot project for able-bodied recipients of aid to families with dependent children (AFDC) and General Assistance (GA) who reside in a county of the first class, that is, Bergen, Essex and Hudson counties. The bill provides for a one-year extension of AFDC benefits to an employed AFDC recipient whose gross annual income does not exceed 150% of the official federal poverty level, adjusted for family size, who would be eligible for AFDC benefits except for the person's income from employment or receipt of unemployment or temporary disability benefits. A recipient would be eligible to receive financial assistance in an amount up to 50% of the monthly AFDC grant according to a sliding schedule of disregards established by the Commissioner of Human Services. The Commissioner of Human Services is required to report to the Governor and the Legislature within two years after the act's effective date on the results of the community service pilot project. The report would include any recommendations with regard to expansion of the community service program to include other counties.

      Department Comments:

      Estimates were developed based on implementation of a pilot program in Bergen County. The Department of Human Services (DHS) and the Office of Management and Budget (OMB) estimate that in the program's first year, State costs would increase by about $1.8 million. However, in the second and third years, the program would save the State about $66,000 and $269,000, respectively.

      Office of Legislative Services Comments:

      Though the estimates appear reasonable in the context of the current AFDC program, the estimates will not be valid in the near future due to the enactment of the federal "Personal Responsibility and Work Opportunity Reconciliation Act of 1996," Pub.L. 104-193, which ends the AFDC entitlement program. The new federal law permits States to establish community service projects as a permissible work activity and, more importantly, caps the amount of federal funds the State will receive. As the amount of federal funds the State will allocate to community service projects is not known, the amount of State and local funds that may be required to supplement the program cannot be determined. Similarly, AFDC savings estimates resulting from the program, which were uncertain to begin with as they entail assumptions that can only be ascertained once a program is operational, are no longer valid.

This fiscal note has been prepared pursuant to P.L.1980, c.67.