NOTE: As provided in LFC policy, this report is intended for use by the standing finance committees of the legislature.  The Legislative Finance Committee does not assume responsibility for the accuracy of the information in this report when used in any other situation.

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(Parenthesis ( ) Indicate Revenue Decreases)

Conflicts with HB2 and SB2

SOURCES OF INFORMATION

LFC Files

Human Services Department analysis not provided

SUMMARY

Synopsis of HAFC Amendment

The House Appropriations and Finance Committee amended HB908 to make technical corrections to the language.

Synopsis of Bill

House Bill 908 amends the New Mexico Works Act (Act) to change the housing subsidy given to participants from $100 per month to $50 per month. Furthermore, the bill specifies that in order to qualify for the housing subsidy, participants must first qualify for a cash benefit of at least $75 per month, excluding any housing subsidy payment.

House Bill 908 also makes technical corrections to the Act to clarify the financial standard of need applied.

Significant Issues

Currently, there are approximately 18,000 participants that qualify for the housing subsidy under the Act. Of those participants, roughly 1,800 qualify for a cash benefit of less than $75 per month. Therefore, should House Bill 908 take effect, it will reduce the number of participants receiving the housing subsidy by approximately 1,800 participants.

The housing subsidy benefit under the Act as currently written costs roughly $20.0 million per year. Thus, the implementation of this bill will result in a minimum of $10.4 million savings per year-$10.0 million from cutting the benefit in half and $400.0 from implementing the $75 cash benefit criteria. The savings will be obtained in federal funds as the housing subsidy is paid for from the federal Temporary Assistance for Needy Families block grant.

CONFLICT/DUPLICATION/COMPANIONSHIP/RELATIONSHIP

Senate Bill 2 and House Bill 2 both contain appropriations to fund the housing subsidy at $100 per month for any participant that does not live in government-subsidized housing or does not receive government-subsidized housing payments.

OTHER SUBSTANTIVE ISSUES

Each year the federal work participation rates and required work hours increase. Thus, the reduction of the housing subsidy should result in increased savings each year due to more participants working and for more hours. This will affect cash assistance by having less income disregarded in determining the cash benefit level and therefore the housing subsidy by fewer participants meeting the $75 criteria.

The implementation of HB908 may also have the potential to reduce the caseload. It is possible that participants who no longer qualify for the housing subsidy due to the $75 criteria, may not come back to re-certify for cash benefits because the time and effort put into remaining eligible will not be worth the reduced cash benefit.

RLB/gm