Efforts at Job Restructuring

When asked, "Is it necessary to restructure positions to meet the average annual wage requirements for the prime sponsor's area?," approximately 64% of respondents said "yes." In July, 80% of respondents said "yes" to a similar question in the NACO survey. The difference is probably accounted for by PSE funding cutbacks announced since July, under which prime sponsors have had to create far fewer jobs than expected.

As was the case with the NACO survey, the majority of DMD respondents had few constructive suggestions to share on procedures and processes for job restructuring. The most frequent suggestion was that primes contact the U.S. Civil Service Commission.

Other comments by respondents strongly indicated that prime sponsors remain in need of intensive technical assistance and training (TAT) in restructuring jobs in a manner consistent with CETA regulations.

Impact on Quality of Proposals and Project Sponsors

Approximately 63% of survey respondents have asked for proposals in line with the new AAW guidelines. Half of them stated that they had changed the standards for project approval. Basically, prime sponsors said they are giving more weight to salary levels for the jobs requested and less weight to type of position, project content, and/or the ability of participants to transition into unsubsidized employment.

When asked, "Does the prime sponsor intend to use agencies that have not been used in the past which have lower entry level positions?," only 33% of respondents said they were turning to new community-based organizations. One explanation for this low percentage is that primes have already turned to CBO's in large numbers to create jobs. Of primes who said they are not turning to new agencies, approximately 14% reported that more than 75% of their jobs are already in CBO's; an additional 17% of respondents said that CBO's now account for 50-75% of their worksites. In general, the capacity of CBO's to absorb increasing numbers of PSE workers is extremely limited without additional supervisory and administrative staff.

AVERAGE ANNUAL WAGE INDICES AND AVERAGE PUBLIC SECTOR ENTRY-LEVEL WAGES

Table II shows the distribution of FY 1980 average annual wage indices of survey respondents. Table III presents the distribution of survey respondents' average entry level wages in the public sector (within the CETA maximum). HR 5914, introduced by Congressman Myers, allows prime sponsors to determine their own average wage based on the average of entry-level public sector positions in their area, within their CETA maximum; Table III, then, gives an indication of what average wages would be under the Myers' amendment.

Average Entry Level Wage in the Public Sector
(within CETA maximum)

Senator NELSON. Thank you very much.
Commissioner MacIlwaine?

STATEMENT OF HON. PAULA MacILWAINE, COMMISSIONER, MONTGOMERY COUNTY, OHIO, REPRESENTING THE NATIONAL ASSOCIATION OF COUNTIES

Ms. MACILWAINE. Mr. Chairman, my name is Paula MacIlwaine. I'm president of the County Commission of Montgomery County, Ohio. I chair the committee on welfare reform jobs of the Employment Steering Committee of the National Association of Counties. I, too, am accompanied by Jon Weintraub, who is our associate director and legislative coordinator of NACO.

We wish to commend the distinguished chairman, Mr. Nelson, and members of your committee, for your outstanding leadership in pushing welfare reform in the 96th Congress.

Welfare continues to be the single largest expense of the Nation's counties, more than $11 billion last year funded from property tax. The problems which the current systems creates for taxpayers, recipients, and county governments that fund and administer welfare programs have not changed. The Nation still needs a more rational system that can deliver income support and employment opportunities in a humane and efficient manner, and counties still need fiscal relief.

There are 18 States in this country where counties share a very large burden of these costs. The counties in these 18 States are responsible for 50 percent of the AFDC case load nationally, and my State of Ohio is one of these.

Counties in New York spend 50 to 65 percent of their budgets on welfare, while the burden for California counties averages about 35 percent. In Ohio, that figure is 15 percent.

What would fiscal relief mean to my county, Montgomery County, Ohio? The unemployment rate in my county was 6.6 percent in December of 1979, while the State of Ohio was 5.9 percent, and the national was 5.6 percent.

In 1978, we spent $2.5 million of local tax revenue on welfare. In 1979, we spent $3.6 million, a 44-percent increase. If you include the $2.8 million for medical care that we spend annually, we spend approximately $6.48 million on public assistance, and this was in 1979.

We can't increase taxes to meet these costs, so other services must be curtailed or eliminated to meet the increasing demand of welfare benefits on our budget.

Counties spend approximately $3 billion national on general assistance. We feel that additional fiscal relief in relation to the general assistance cost could be improved at a tremendous costbenefit ratio if the CETA average wage was increased or eliminated to make participation in a regular CETA PSE job more attractive.

Clearly the average wage provision has been shown to be major national problem. Surveys by NACO, USCM, the State of Massachusetts, and DOL regional offices, confirm the problem and only vary in their estimates in their magnitude of the problem.

Many prime sponsors are forced to pay wages below the poverty level because of the average wage restrictions. Studies have clearly

shown that PSE jobs in local government have two or three times better transition rate than those in CBO's, yet PSE jobs in most local governments are a thing of the past, thanks to the average wage. If transition is still important, we urge you to alleviate the average wage problem. We'd be happy to work with you on this amendment with the committee staff.

We need an amendment to S. 113, S. 112, to insure that local CETA prime sponsor government is not held liable out of the general revenues for mistakes in eligibility determination made by the welfare system. The fiscal relief we would get from this bill could be eaten up by this liability.

We're concerned with the heavy reliance on States for the job search function, while recognizing that the important role States play, we would prefer a first right of refusal in administration of the job search function on the part of counties in at least the 18 States where counties administer welfare. This first right of refusal would put counties through their effective performance on the job search function and more control of their fiscal relief.

NACO would also prefer that clients in any part of the CETA system be immediately eligible for a tax credit. This eligibility would expedite placement in the private sector.

NACO is concerned with the impact on funding of CETA titles II-D and VI that funding for public service jobs in the new part E of title II will have. While we fully support the use of public service jobs for welfare clients, we're concerned that the balance be maintained, and PSE jobs for welfare jobs should not subsume the existing PSE program. Possibility the subcommittee could create this balance by including language similar, in effect, to section 112(b)(1) of the current CETA law.

Section 112 creates a balance between titles II-B and II-C, and title II-D of CETA by capping the amount that can be appropriated for II-D at 60 percent of funds for all title II.

Balance is necessary between your new title II-E and the existing titles II-D and VI. A balance must also be achieved within title II to insure adequate funding for titles II-B and II-C, the backbone of the CETA system.

It is our perception that additional language is needed to insure balance with CETA.

We do not support the amendments to title II-D in section 4 of S. 1312. All PSE jobs for welfare recipients should be in title II-E. Reporting same program management and ability to measure program impact all demand funding these jobs in a separate title II-E without mortgaging title II-D.

It is too soon for us to know the anticipated dollar impact of the proposal on counties, yet the intent of the bill is clearly to guarantee substantial fiscal relief. We strongly support such a guarantee and would like to see the fiscal relief passed through the counties at that pay for FDC and SSI supplements. We further support a clear and continuing hold-harmless to prevent States and counties from experiencing high welfare costs resulting from program changes.

In conclusion, we want to reemphasize that the National Association of Counties continues to support a reform welfare and employment system that is more humane and beneficial to recipients,

more rational to administer, and more fair to taxpayers. We are confident that this subcommittee will fashion a bill from the proposal before us that can be enacted and that will move us much closer to welfare reform. We pledge NACO's support and assistance in your efforts, and we are enclosing a brief section by section comments for your perusal, and appreciate this opportunity to testify before your subcommittee.

Senator NELSON. Thank you very much, Commissioner, for your testimony. We may have some written questions to submit later, which I assume you will be prepared to respond to.

Ms. MACILWAINE. Yes. If I might just add, Senator Nelson, we have one of the demonstration projects in our county to test this piece of legislation. Although the results are a little unclear at this time since we only began the program 7 weeks ago-

Senator NELSON. Is the demonstration of――

Ms. MACILWAINE. It's of the job search and job assistance program, and also the second part to the program. We are taking general relief recipients. We have already put 382 of these people through the program since January 8. Actually, they have 2 more weeks in the job search. We have been able to place 25 percent of these in private sector positions in our county, even though our unemployment rate is substantially high; and we have also dropped another 35 percent off the welfare rolls, and are saving our county about $18,000 a month with just the short time that we've been involved in the program. So, we believe very strongly that this program can succeed, and we hope that with the current funding cuts that are going on in this city that the demonstration projects are not the first to go. We feel that they are going to provide good results, and will show that this particular piece of legislation can be effective throughout the whole country.

Senator NELSON. How many did you place in jobs?

MS. MACILWAINE. Twenty-five percent so far. We're only in the sixth week of job search. Most of the positions, we're placing people through newspaper want ads, and various entry level positions in our community. Our participants on general relief only get $101 a month. They're single adults, and at $3.10 an hour, which is the minimum wage in entry level positions in our community, substantially higher than what they get on general relief. We require that-and through this program, the demonstration-if they miss more than two sessions of the particular program, then they are taken off the welfare rolls; and we've had very good attendance; and those who have not come, we have dropped 35 percent of those participants off the rolls.

Senator NELSON. Thirty-five percent of those who have not come to what?

MS. MACILWAINE. We require that they participate in the program. If they do not come to the active job search program, which is an all-day program, if they miss more than two unexcused absences, they are taken off welfare.

Senator NELSON. And how many were taken off?

Ms. MACILWAINE. Thirty-five percent of our participants so far have been dropped, and we've put about 382 through. We have 382 enrollees at this point.