Widespread reforms are in store for recipients, businesses, local governments and those providing services to the poor.
 

James Harris Sr., owner of an office cleaning service in the Albany area, says he's not comfortable with the idea of hiring welfare recipients—something government leaders are expecting of businesses as part of a full-fledged reform of the beleaguered assistance program.

 "A very substantial group on welfare [is] hiding from life's reality of working eight hours a day," says Harris, owner and president of Janitronics Building Services. "The one fear I have is whether there will be enough people who really want to better themselves."

 He's not alone. Though those in the business community say they support attempts to change what they believe is a failed welfare system, many fear taking a chance on employees they consider to be high risk. People on welfare, they fear, may not be as reliable. They may need more supervision and more support programs while they get acclimated to working. And they may not last as long, meaning higher costs due to turnover and new training. "There [have] been a lot of reservations expressed, to put it mildly," says Robert Ward, research director of the Public Policy Institute, an arm of the Business Council of New York State.

 Yet cooperation from private business is only one of several major issues that will have to be dealt with in coming months and years as New York readies for its first major welfare overhaul in six decades. Limiting the duration of benefits, trimming the size of benefits, addressing shortages in jobs and day care, and supplying adequate transportation for aspiring workers await state leaders as they try to hammer out an agreement on the specifics of reform this spring. Housing and health care networks also will be affected, as will those providing food and clothing to the poor.

 No one, from welfare's clients to its providers, will escape the coming changes. "It's going to be very difficult to come up with something that will appear to be a fair transition from welfare to work, but it has to be done," says Republican Senate Majority Leader Joseph Bruno.

 New York's $5 billion welfare system currently is broken into two major components. The $2.8 billion federal Aid to Families with Dependent Children (AFDC) program serves 1.12 million New Yorkers, with the federal government paying 50 percent of the program's costs, and the state and counties kicking in the rest.

 New York's $1.08 billion Home Relief program is geared mainly to single adults who are deemed employable. There are more than 262,000 people receiving Home Relief, which is funded entirely by state and county money.

 When President Bill Clinton in August signed into law the most sweeping changes to the nation's welfare system in more than half a century, the state's stewardship of the AFDC program was thrown out of whack. Under the federal legislation, AFDC was no longer an entitlement. Welfare families suddenly could receive benefits for no more than five years. The law also required that able-bodied federal welfare recipients with families have some type of work, education or job training within two years.

 The federal law limits food stamp eligibility to three months in a three-year period for the able-bodied who are not working at least 20 hours a week. That ultimately could affect 100,000 New Yorkers. The new law also ends most federal benefits for legal immigrants.

 New York must enact the law's reforms by July 1 or face federal sanctions.

 Pataki followed the federal reforms with his own reform proposals in November that in some cases went far beyond what the federal government mandated and in others looked to fix some of the problems he saw with the bill.

 The main thrust, Pataki said upon introducing his reform package, must be to move welfare recipients into work—ideally in the private sector but also by working off their grants within government and not-for-profit organizations. Local welfare offices also need to operate like job centers, with the emphasis placed on job testing, training, retention and follow-up. "We must rise to the challenge, not because federal law requires it, but out of compassion for the more than I million New Yorkers who are still locked in a system that prevents them from succeeding," Pataki said in his State of the State address.

 Pataki's November reforms proposed doing away with the federal AFDC program and replacing it with one called New York Works. Federal welfare recipients would see their benefits cut by 10 percent after 18 months, with cuts increasing to 45 percent in the fifth year of assistance. The current $577 maximum monthly benefit payment would drop to $317 by the last year of assistance.

 To offset the reductions, Pataki proposed allowing welfare recipients who find jobs to keep more of what they earn without losing their welfare benefits. Under the current system, a welfare recipient can earn up to $667 a month before becoming ineligible for public assistance. Under Pataki's plan, recipients would be able to earn up to $1,080 each month—the poverty level—without losing benefits.

 Though the idea has many supporters in the Legislature, Assembly Speaker Sheldon Silver of Manhattan and other downstate Democrats view the notion of cutting the benefits of those the state will throw off the rolls in five years anyway as excessive and harsh.

 Even Bruno, a fiscal conservative from the upstate town of Brunswick, who has supported the concept in the past, believes Pataki's proposal is too ambitious. In fact, Bruno suggests increasing benefits for those who might need them most. "The most difficult thing will be the cuts in benefits," Bruno says of the Pataki plan. "That is pretty difficult. I think we will look at refining that in some way.... We'll look at the benefit levels and see what is fair in terms of sustaining people through the period until [the] time limit runs out."

 He adds, "If people are trying but, for whatever reason, they are not able to find a job, I think we need to look at what they are receiving and possibly increase the benefits to make sure young people can live properly and care for their children properly."

 Pataki also proposed doing away with the Home Relief program entirely and replacing it with a $1.2 billion annual "safety net" program that instead of cash benefits would offer vouchers for food, clothing and shelter to those who would have received Home Relief, legal immigrants, and those in the New York Works program who exceed the five-year time limit.

 Supporters of the plan say vouchers would ensure that welfare money is being spent on essential services and not on liquor, cigarettes, drugs, expensive sneakers and a host of other misuses. "Able-bodied citizens shouldn't be receiving cash benefits," says Republican Sen. Joseph Holland of New City, chairman of the Senate Social Services Committee. "We have unemployment insurance, and we should give vouchers if you're stuck, but the business of giving them money forever doesn't make sense to me."

 Counties, under the plan, would be given discretion to set the dollar amount of the vouchers, with an incentive to hold down costs built in by allowing localities to keep 20 percent of the state dollars not spent. There would be no limit to how low the voucher amounts could go, leading some advocates to fear that counties will engage in a race to the bottom in hopes of either forcing their own welfare recipients to move to another county offering a higher level of benefits or discouraging those from other counties from moving into their region.

 Pataki frequently has said, though, that counties best can determine what an individual needs by weighing local costs.

 The permanently physically and mentally disabled would, under Pataki's proposal, continue to receive cash from the federal Supplemental Security Income program. The temporarily disabled also would be eligible for temporary cash benefits.

 The Home Relief plan faces an uncertain future. Though Silver last year released a welfare reform plan that included vouchers, it is unclear whether he would support ending all cash benefits for single welfare recipients. And Silver, together with Bruno and Pataki ultimately will have to come to an accommodation for this or any of the governor's other reform measures to become law. "We have to look at this as an entire package," Silver says. "You can't separate one piece out. It will be an equity issue. Do you cut off women and children [from cash benefits]? The devil will be in the details."

 Since its inception, welfare was designed to offer temporary assistance to those without jobs. Those receiving checks were required to participate in work programs. But many such programs in New York and across the nation failed, often because of poor outreach and oversight.

 By 1994, there were 1.64 million New Yorkers on welfare, including 377,500 single adults deemed employable.

 Upon taking office in January 1995, Pataki made reforming the system a priority. But many of the administration's initial proposals, including benefit cuts and time limits, were rejected outright by Silver and the Assembly Democrats.

 However, the governor and Legislature did make some changes. To cut down on welfare fraud, they adopted a controversial plan to fingerprint welfare recipients electronically to monitor whether they were trying to collect checks in more than one locality. The measure, according to the administration, reduced the welfare rolls by 25,000.

 Workfare, a program in which welfare recipients who can't find jobs work off their grants and gain job experience at government or non-profit agencies, also was established, but its success has been spotty. In New York City, which has the largest workfare program in the nation, more than 130,000 people have participated. But only 10 percent have found permanent jobs, according to the city Human Resources Administration. And as of late last year, only a few hundred of the 35,000 people in the program were receiving any specific job training.

 Regardless, the moves have served to lower the welfare rolls dramatically in New York. Since 1994, New York City, which is home to 70 percent of the state's welfare population, has reduced its rolls by more than 170,000, or about 15 percent.

 In upstate Albany County, Home Relief enrollment fell from 1,977 in 1994 to 676 in 1996. In all, 250,000 people have dropped from the welfare rolls in New York since 1995, according to the administration.

 The governor's latest plan has won praise from business organizations and conservative lobby groups for building on the successes of the past two years. "It's a plan that moves in the right direction," says the Business Council's Ward.

 Welfare advocates also credit some of Pataki's ideas. They like, for example, his plan to increase the money welfare recipients can make without losing benefits. Some, like Shelly Nortz of the state Coalition for the Homeless, also applaud him for an initiative announced in his State of the State address to use welfare recipients to renovate houses in foreclosure in order to get them back on the tax rolls. With $5 million in state funding, the governor called upon trade unions, contractors, builders and other private businesses to volunteer time to train and help the recipients. "It's a good idea, but it's only a small piece of a much larger puzzle, and the governor seems to have lost a lot of the pieces at this point," Nortz says.

 According to at least one expert on New York state constitutional law, the plan also satisfies a unique provision in the state constitution requiring that the state provide for its needy. Pataki's "safety net" program should meet the requirement, since the constitution gives the Legislature broad discretion in determining what the care should be, says Vincent Bonventre, a professor at Albany Law School. "As far as vouchers go, I think it would be perfectly fine as long as the care can be reasonably considered adequate," he says. "The constitutional issue is whether the needy are taken care of. Even if it's in a way you or I might not choose, it would be fine."

 Criticism of the plan has been stinging, however, and has come from many sides. "We did what we did [reducing Home Relief rolls] within the existing framework," says Albany County Executive Michael Breslin, a Democrat. "We didn't change a thing."

 Rather than reducing benefits, Breslin says the key is more intensive work by the counties to screen and evaluate potential welfare recipients when they first come into the system. Instead of simply writing them a check, Albany evaluates recipients job preparedness and makes decisions on what type of training and education might be needed to place them in jobs. Albany's approach also is being espoused by the Pataki administration, however.

 Other critics fear an increase in homelessness and, as a consequence of the displacement, crime. The average rent for a New York City welfare recipient is $397, says the Coalition for the Homeless's Nortz. But the average housing allowance paid is $265, meaning people are using other parts of their grants to help pay the rent. With any unanticipated expenses, the rent is in jeopardy, she says.

 If Pataki's benefit cuts go through, it will become even harder for recipients to pay their rents, Nortz says. If that happens, advocates fear a growing strain on local homeless shelters. One in four welfare recipients used public homeless shelters in the last five years, she says.

 Administration officials dismiss the argument as fear-mongering. As the rolls decrease and more people work, they say, fewer people will be in the position to need shelters.

 If that's the case, asks Nortz, then why in January did the state Department of Social Services move to implement regulations that would lift the cap on capacity levels at New York City homeless shelters?

 Increased homelessness and a cut in food stamp benefits also will affect food pantries and soup kitchens, which last year saw more people in need and fewer donations than in the recent past, says Rachel Leon of the Hunger Action Network of New York State.

 In the last year alone, more than 700 new food pantries or soup kitchens, stocked mainly through donations and low-cost purchases, opened throughout the state, bringing the total to 3,000. In the Capital District, Leon says, food pantries served 5,000 more families for a total of 80,000 last year. New York City also saw a significant increase. "Unfortunately they're just a Band-Aid," Leon says. "No one thinks soup kitchens and food pantries are the answer. People need jobs and a good income so they can buy food."

 And with those jobs, she says, welfare recipients will need benefits, particularly for health care. Administration officials say Medicaid benefits would be extended to welfare recipients leaving the rolls for one year—six months more than is required by federal law. Leon, though, says that won't keep people from going back on the rolls if they face a health crisis after the first year. "If they're working at McDonald's and their baby gets sick, that person is going to end up back in the system just to get help for her baby," she says. "They need real jobs with real benefits."

 Hospitals and health care providers are worried that the money won't be there for them to handle a jump in patients—both adults and children—who will wind up without health insurance as a result of welfare reform. As part of the health care reform act adopted last year by the Legislature, the state committed $181 million a year for specified child care, plus another $790 million to care for the indigent. But despite the proposed welfare changes, those numbers were not increased in Pataki's budget plan. Unless the state antes up significantly more in coming years, struggling hospitals may find themselves in even worse situations, says Jeannie Cross, spokeswoman for the Healthcare Association of New York State.

 Meanwhile, county officials like Breslin are afraid they're going to pick up millions of dollars in extra costs. The governor's estimate that 170,000 people will wind up in the "safety net" program is too low, as is the $1.2 billion price tag he's put on the program, they say.

 Advocates for the poor and local government boosters predict the figure will be much higher when factoring in mothers who have additional children, recipients who lose their cash assistance because of failed drug tests, legal immigrants, and those who don't find jobs before their federal benefits run out. "To think the welfare rolls will be less, so those people won't cost anything, is really pie in the sky," Breslin says.

 Counties also are angry that they will not share in $450 million in savings the state expects to receive from the federal government. A $2.36 billion welfare block grant the federal government will give the state will be based on the 1994 welfare caseload. But the state's caseloads are significantly lower in 1997 than they were in 1994, resulting in about $730 million in extra money for the state to reinvest in the system.

 Pataki, however, has proposed reimbursing counties based on current caseloads instead of the earlier rolls, meaning they will receive less money. Aides to the governor say he plans to spend the savings on welfare reform and a fiscal relief package, including $150 million that would be split among counties where recipients are meeting work requirements and for computer systems to track welfare cases.

 Sufficient day care for welfare parents also could prove problematic. "Welfare reform cannot work without day care," says David Hunt, executive director of the New York State Child Care Coordinating Council, a private agency that works with the state Department of Social Services to promote day care programs. "The care is not always located where it's needed, and there [have] not been sufficient subsidies to help low-income families."

 Of the l .l million New Yorkers who receive federal welfare benefits, only about 400,000 are adults. "That's why children become such an important part of welfare reform," Hunt says. "What are we going to do with all of them?"

 Currently there are l9,000 regulated child care businesses in the state, from pre-kindergarten Head Start programs, to licensed day care centers, home care settings, and programs for school age children who need to be watched before and after school, according to Hunt.

 In all, there is room in the system for 400,000 children. But government subsidized programs for low-income families are lacking, Hunt says. The government, he says, offers money for day care for 100,000 children, but there is currently a waiting list of 30,000.

 And that's before welfare reform kicks in. New York can expect the need for day care to grow between 260,000 and 313,000 children by the time the second year of the reforms take effect, Hunt says. "We have to pick up the pace, but it is doable," he says.

 Pataki is proposing $54 million in additional spending for child care, which would create 14,000 new slots. Hunt claims more will be needed, but the administration insists the money should help ease the strain on the system. "If the welfare rolls are declining and more people are moving into the workforce, we believe $54 million is more than adequate to fund the allotted spots needed," says budget spokesman John Signor.

 In rural New York, public transportation for welfare recipients is of paramount importance. In Essex County, there are about 200 welfare recipients who are single and deemed employable. But as many as half have received exemptions from work requirements due to a lack of transportation, says Richard Carpenter of the Essex County Department of Social Services.

 The responsibility for beefing up transportation opportunities will fall on counties, which will be able to use some of the welfare savings they will be sharing with the state, administration officials say.

 In the end, as in the beginning, the major arguments over welfare reform still will boil down to one question: Are there enough jobs in the state?

 In the short term, most agree the answer is yes. New York easily should meet the federally mandated target of having at least 25 percent of its 350,000 welfare cases enrolled in a work education or job training program by the end of September. Already, the state has placed more than 61,000 enrollees—or 17.5 percent of the total—in such programs.

 By 2002, however, 50 percent of the welfare population must be in work programs. And most advocates say there are not enough new jobs being created in the state to handle the long-term demands. The Greater Upstate Law Project, which provides legal services for the poor, claims the state will fall more than 900,000 jobs short of the number needed to employ New Yorkers without jobs.

 Many of the jobs that will be available for welfare recipients will be low-wage, advocates say. "The governor's plan is flawed at such a basic level, there is no way this works," says Anne Erickson, legislative coordinator for the law project.

 But Pataki and various business organizations say there are plenty of jobs. When new jobs are factored in with total job openings, there are more than l million positions available, they say.

 All sides agree that business will have to play an active role if the reforms are to succeed. "It is time for the business community—and those who believe and have preached that less government is good—to step up to the plate and devise something that will help people in longtime job and longtime growth opportunities," says state Labor Commissioner John Sweeney.

 Golub Corp./Price Chopper Supermarkets, which owns 94 stores, including 65 in New York, says it is very interested in hiring welfare recipients. The chain over the years has taken advantage of a federal program offering tax credits to hire economically disadvantaged people, including welfare recipients, as cashiers and in entry-level positions like stock boys. The company receives half a million dollars annually in federal tax breaks for participating in the program, says Curtis Hopkins, vice president for human resources.

 Hopkins says when his stores consider welfare recipients, they look at what kinds of life skills they've had to prepare them for work. Often, store managers have to serve as mentors, teaching recipients how to behave in a job setting. "If one of their children is sick for three days in a row, the first day we tell them we expect them to find a solution so they can come to work the next two days," he says. "They sometimes need to learn problem-solving skills. They need to learn how to come to work on time, to have good hygiene. If they're not going to be there, they need to learn to call."

 Meanwhile, Harris, owner of the office cleaning service in the Albany region, says he'd be happy to hire welfare workers—if the state and counties are prepared to commit sufficient resources for training and wage subsidies. "In the past there were some programs that just didn't work," he says.

 In his proposed budget for 1997-98, Pataki recommended $102 million for expanded education, job training and employment services. He also asked for $5 million for various employment agencies to help place welfare clients, and another $5 million for the Urban Development Corp. to offer job-specific training, wage subsidies and grant diversions in order to encourage private businesses to hire welfare clients.

 It would be up to the counties to decide whether to use the money to se up their own job training programs, con tract out with a private employment training firm, or provide individual companies that hire welfare recipients with money for training.

 Assembly Speaker Silver and Senate Majority Leader Bruno say they will study closely how much is available for job placement incentives. Bruno says the state must see that employers simply aren't trying to replace regular workers with welfare recipients, who are less expensive to employ because a portion of their salary is subsidized by government grants.

 Private and public sector unions are worried about just that. "The welfare ends up evolving into corporate welfare," says Joe Jamison, research director for the New York State AFL-CIO.

 The unions also are upset that Pataki has asked that welfare recipients not be bound by minimum wage requirements. And they argue that by putting all job training money into a single pot, welfare recipients will get special treatment over other workers. "It threatens the bottom end of the labor force," says Mark Baldwin of the national AFL-CIO. "People who work for minimum wage will be forced to compete with those people who are subsidized."

 In the case of New York City, no union employees have been laid off or lost hours because of the influx of workfare participants, the unions say. It might be different in the private sector, though, where labor contracts aren't as stringent, Jamison says. Union officials say lawmakers should require that welfare recipients be given many of the same benefits as regular employees, such as vacation time, lunch breaks, overtime and even permission to join the union—if the company has one.

 Such agreements would have to be worked out between either the local counties and the business or the welfare recipient and his or her new employer, says Donna Arduin, the Pataki administration's first deputy budget director.

 "Is reforming the system going to be a challenge? No one doubts it will be," says Daniel Hogan, spokesman for the Department of Social Services. "Is it doomed for failure like the advocates say? Absolutely not."

 Kenneth Lovett is Albany bureau chief for Ottaway News Service.
 
 

House Divided

Democrats in the state Assembly from New York City don't want to overhaul the welfare system. They're upset with President Bill Clinton and Congress for passing a law that imposes five-year time limits on federal welfare recipients and requires some type of work, education or job training within two years or else benefits would be cut.

 They're also livid over the elimination of most benefits for legal immigrants, particularly at a time when studies show New York City's immigrant population is at its highest level in decades.

 Overall, 70 percent of the welfare population resides in the city.

 Meanwhile, Long Island and upstate Conservative Democrats have been pining for dramatic welfare reform for years. Many of these upstate Democrats espouse a philosophy of less government, lower taxes and fewer social programs, Republicans.

 It's against this backdrop that the Democrat-controlled Assembly will undertake what for them could amount to the most important legislative session in 60 years, one that could serve to define them for years to come.

 At the center of it all is Assembly Speaker Sheldon Silver of Manhattan. It will be his job to bring the two sides closer together, a task he says he's not worried about. "We've been successful finding common ground and finding the right place to be on issues that [accommodate] a wide diversity of opinion that exists in the conference, and one that resonates on this issue," Silver says.

 Will the debate fracture the party? Not in the long term, most agree, although some believe Silver's leadership of the house could be weakened if the battle gets too bloody.

 Judith Hope, co-chair of the state Democratic Party, says people have been predicting an irreparable split among Democrats both in New York and nationally since Clinton signed the welfare bill, but to date there have been few real problems. "Granted we haven't gone through the legislative process here in New York, where people have to stand up and take highly visible positions," she says. "The real showdown is yet to come, but I don't think it will be as bad as some think."

 In fact, many members of both parties say the schism, while it will run deep during the upcoming negotiations, would have been worse were it not for the federal legislation requiring many of the ideologically painful alternatives that in past years were bounced around in the conference. "It helps the Assembly most," says Senate Majority Leader Joseph Bruno, a Brunswick Republican and a key player, along with Silver and Gov. George Pataki, in coming to a formal agreement. "The governor has been pushing many ... things included in the federal law, and the Senate has been with him on it," Bruno says. "The federal action has helped the process. Now the question is what will they do, but the Assembly now has to do something."

 While many Democrats downplay the problems, others, like Lee Miringoff, director of the Marist Institute for Public Opinion, say the outcome could affect the make-up of the party for years to come. "It's true the federal government has made it easier, but there's still a lot that needs to be done on the state level." he says. "It's a serious enough issue that it will cause some Democrats to think differently about their party."

 But even Miringoff concedes that for liberal Democrats, no matter how angry they get, there aren't a lot of places they can go politically that will satisfy the bulk of their ideologies. Clinton's overwhelming victory in New York this past November proved that the Democratic constituency largely will support a Democrat regardless of how he leans on even the most important of issues.

 The Democrats' debate over welfare "has the potential for some short-term bloodletting," says political analyst and pollster John Zogby. "There will be some really strong debate over the heart and soul of the party, but ultimately I don't see it as anything that will tear the party apart."

 A Bruno aide says the real fallout, if there is any, will be seen come election time. If Silver agrees only with what the federal law requires, as many predict. some conservative Democrats seeking re-election could be vulnerable for blocking more dramatic changes being pushed for the state welfare system.

 Silver says it's not an issue. "The campaign," he says, "will take care of itself after we do the right thing."

 —Kenneth Lovett
 
 

Federal Welfare Benefits

(Monthly, for average three-person family):
 
 
 

                          SOURCE U.S. Dept. of Health and Human Services.