HOUSE BILL REPORT

HB 1685

BYRepresentatives Grimm, Holland, Locke, Silver, H. Sommers, Pruitt, Brough, May and Ferguson

Providing for state caseload forecasts.

House Committe on Ways & Means

Majority Report:  The substitute bill be substituted therefor and the substitute bill do pass.  (27)

      Signed by Representatives Grimm, Chair; Bristow, Vice Chair; Basich, Belcher, Braddock, Brekke, Brough, Butterfield, Dellwo, Ebersole, Fuhrman, Grant, Hine, Holland, Locke, McLean, Nealey, Peery, Rust, Schoon, Silver, H. Sommers, Spanel, Sprenkle, Valle, Wang and B. Williams.

House Staff:      Jack Daray (786-7136)

AS REPORTED BY COMMITTEE ON WAYS & MEANS

FEBRUARY 7, 1988

BACKGROUND:

To assist with the managing of public programs and for establishing program funding levels, most state agencies produce forecasts of caseloads to be served. These forecasts generally cover two year periods of time.  Different models and forecasting techniques are used to predict the level of service anticipated in the particular program.  Program administrators, usually in conjunction with central budget office staff, work together to determine the assumptions used to generate the anticipated levels of service in each program.  The Office of Financial Management (OFM) then reviews these forecasts prior to their release to the legislature.

The forecasted caseloads are usually available in November just prior to the release of the Governor's Biennial Budget on December 20 of each even numbered year.  The caseload forecasts are generally updated once and sometimes twice before a final legislative budget is adopted.  The timing of the forecast updates frequently do not correspond well with legislative analysis and decision making.

There have been instances since fiscal year 1980 of actual caseloads far exceeding estimated caseloads.  This has been especially troublesome in the case of the Department of Social and Health Services programs, specifically Income Assistance, Medical Assistance, and Nursing Homes.  The underestimating of caseloads has resulted in the need for supplemental appropriations and/or the imposition of reduced grant payments and/or services to clients and families to allow the affected programs to continue operating without exceeding available funding.

SUMMARY:

SUBSTITUTE BILL:  The Office of Financial Management, with the assistance of state agencies affected by caseload forecasting, is responsible for preparation of caseload forecast levels by month, appropriate time period and prior to every regular session of the legislature. The original bill placed caseload forecasting responsibility with the Economic and Revenue Forecast Council and a Caseload Forecast Supervisor to be employed by the Department of Social and Health Services.  The Economic and Revenue Forecast Council was to produce forecasts four times each year.

The Caseload Forecast Work Group is created to meet at least quarterly with the Office of Financial Management to: (1) review documentation concerning the methods, assumptions and any policy or program changes associated with caseload forecast and (2) identify the caseload levels by month or appropriate time period. The Work Group is composed of: (1) the chairs and ranking minority members of the ways and means committees of the house and senate and (2) the executive heads of the Office of Financial Management, the Department of Social and Health Services, the Department of Corrections, the Higher Education Coordinating Board, the State Board for Community Colleges and the Superintendent of Public Education, or their designees.

The specifics of caseload as defined in the original bill is expanded to include kindergarten through twelfth grade and higher education.

SUBSTITUTE BILL COMPARED TO ORIGINAL:  Responsibility for developing caseload forecasts is assigned to the Office of Financial Management (OFM) in the substitute bill rather than a caseload supervisor working with the Economic and Revenue Forecast Council as in the original bill.

A Caseload Forecast Work Group comprised of agencies most involved in forecasting caseloads and representatives of the legislature is established.  OFM is to provide information to the group on assumptions, methodologies and caseload data in the developing of biennial budgets and monitoring actual caseload data.  The original bill did not include specifics on review of data development or agency and legislative involvement in establishing caseload forecasts.

OFM is not required to develop forecasts quarterly that reflect an optimistic, pessimistic and baseline forecast as assigned to the Economic and Revenue Forecast Council in the original bill.  The substitute bill adds education caseloads to the definition of caseloads contained in the original bill.

Fiscal Note:      Requested February 2, 1988.

House Committee ‑ Testified For:    None Presented.

House Committee - Testified Against:      Gary Robinson, OFM.

House Committee - Testimony For:    None Presented.

House Committee - Testimony Against:      Gary Robinson, OFM, testified against HB 1685 citing the same reservations used in the Governor's veto of an identical version of HB 1685 passed in the 1987 legislative session (HB 1239):  (1) Caseload forecasting is an integral part of the budget development process for which OFM is responsible; (2) Connecting the official forecast timing to that of the revenue forecasts would create an artificial time frame for preparation of forecasts; forecasts need to be timed more to the cycles of the budget development and monitoring process.