Moving from Dependence to Independence

The Governor also keenly understood that for many on welfare, finding a job might be the easy part. Keeping a job often presented more of a challenge, particularly for working moms. The need for reliable and affordable child care services was an especially crucial concern. Edgar boosted funding for child care from $54 million in 1991 to $392 million in fiscal 1999, and the number of children cared for jumped from just over 33,000 to 130,000. The state also invested in such work-related services as transportation and job placement programs to help participants keep more of their welfare benefits while collecting a paycheck.

Illinois’ groundbreaking efforts worked and, in doing so, received national attention. A study by Tufts University Center on Hunger and Poverty released in 1998 ranked Illinois first among Midwestern states and 10th in the nation in improving the lives of poor families through welfare reform.

“We were never interested in just dumping people off welfare,” Edgar said. “Welfare reform in Illinois isn’t about punishment. It’s about encouraging, stimulating and helping people who can become self-sufficient to turn away from dependence and government and toward the pride of a paycheck.”

One of Edgar’s first plans, called Earnfare, demonstrated the administration’s resolve not to follow the well-worn route of the past. There would be no more handouts whereby the state would neither ask — nor expect — anything in return from welfare recipients. Those old-style failures were well documented, and the Governor knew that to repeat them would compound failure.

Earnfare, launched in 1992, was an example of Edgar creatively responding to those unemployed, single, able-bodied adults who had grown dependent on government aid. Through its General Assistance program, Illinois for decades had provided monthly cash payments to those who qualified, but expected very little in return.

During the 1991 budget crisis, the General Assembly scaled back the General Assistance program to free up state dollars for programs with higher priorities. Available cash assistance dropped from 12 months to no more than nine months. On July 1, 1992, General Assistance for able-bodied, employed adults — about 100,000 persons at the time ended. Community advocates and social service activists predicted disaster.

But Earnfare, a voluntary work program, would help former General Assistance recipients find state subsidized jobs for six months, earn wages and, most important, prepare for regular jobs so that they could become self-supporting and free of government aid.

The program offered single adults a new opportunity to prove themselves as dependable, capable workers to their Earnfare employers and helped them acquire new skills and abilities, making them more employable. By 1998, more than 17,000 had gone on to regular, unsubsidized jobs with 3,700 persons volunteering monthly. Earnfare was cited with an innovation award by the National Council of State Governments for creative and nontraditional methods of solving traditional problems.

“I am happy that this public-private partnership is helping to give more Illinoisans independent lives rather than lives dependent on public assistance,” Edgar said in 1995 when he accepted the award. He credited the program’s success, in large part, to more than 800 employers who hired Earnfare volunteers and started them toward regular paying jobs.

Earnfare was just the beginning. Soon after came Fresh Start, a package of welfare reform initiatives that Edgar introduced in 1993 to remove barriers to employment and provide new incentives for persons to become independent.

The Governor’s plan banished bureaucratic road-blocks. One old federal rule held that if one parent in a two-parent family on public aid worked more than 100 hours a month, regardless of income, that family no longer would be eligible for cash assistance. This forced many fathers to leave home so their abandoned families could remain eligible for aid. The state’s Family Responsibility program encouraged two-parent families to stay together and provide the emotional and financial support their children deserved. Since elimination of the marriage penalty, the number of working two-parent families on public aid has increased from 10.6 percent in 1993 to nearly 60 percent in 1998. The number of two-parent families requiring welfare assistance dropped by more than a third.

“We found a system that literally told fathers to abandon their wives and children. Today in Illinois, we tell fathers that we want them to stay with their families. Today in Illinois, we want children to have a father in the home, someone they can look up to,” Edgar said in 1994.

At the core of Illinois’ welfare reform was a project called Work Pays. Instead of disincentives that kept people on welfare, it built escape routes. Simply put, Work Pays lets recipients keep more of their wages without losing eligibility for Medicaid, child care and food stamps. The program, considered the most generous in the country, reduced state cash grants by just $1 for every $3 earned until clients’ wages grew sufficiently to live on. Recipients quickly learned they could realize more over-all monthly income if they took jobs rather than subsisting on welfare alone.

Through Work Pays, the number of welfare recipients earning income has more than tripled. By 1994, Illinois was the only major state to achieve the federal goal of having 40 percent of the caseload employed. Work Pays received national recognition for innovation from the Council of State Governments.

To tackle the problem of teen parents dropping out of school and onto welfare rolls, the Governor pushed legislation that required 9,500 teen moms to attend school and earn a high school diploma or risk losing a portion of their cash assistance. Edgar budgeted $12.8 million to provide the necessary child care and transportation to help these teens complete their education while supporting a young family.

“We all know that education is key if those teenaged parents are to be successful in making the shift from welfare to work, ending long-term dependency and breaking the generation-upon-generation cycle of welfare,” Edgar told lawmakers in his 1994 State of the State speech.

Other programs called for welfare recipients with children ages 5 to 12 to complete a six-month job search as condition of eligibility, required mothers with no children under 13 to find work or to risk having their benefits reduced, installed a family cap that barred increased assistance for mothers who bore additional children after going on welfare, required welfare recipients with drug or alcohol problems to undergo treatment, stipulated that unemployed parents work or do community service to receive welfare checks, required welfare parents to address child immunizations and family well-being, and discontinued state assistance to parents if their children were excessively truant from elementary school.

By the time Congress got around to welfare reform and President Clinton signed federal legislation on Aug. 22, 1996, to “end welfare as we know it,” Illinois’ welfare system was already moving in a new direction. Since Edgar took office, 317,000 people have made the move from welfare to work, from dependence to independence.

The new Department of Human Services (DHS), which is responsible for continuing Illinois’ welfare reform initiatives, became effective on July 1, 1997, the same day Washington turned welfare over to Springfield and other state capitals.

Sweeping welfare reform legislation passed the General Assembly in 1997, accelerating Edgar’s changes and incorporating federal reform guidelines. The law imposed a federal mandate that public aid recipients find work within two years. It also put a five-year limit on most family benefits. The Aid to Families with Dependent Children (AFDC) program was renamed Temporary Assistance for Needy Families (TANF) to underscore new time limits and work rules.

“The Edgar plan — especially by comparison to other states and within the harsh parameters imposed by the federal government – is a reasonable and thoughtful one that I think can work,” said John Bouman, director of the Poverty Law Project for the National Clearinghouse for Legal Services.

Edgar signed the legislation at the United Airlines terminal at O’Hare International Airport in Chicago to herald the company’s hiring of dozens of welfare clients, and its commitment to hire up to 200 more. Another major employer, United Parcel Service, hired more than 200 former public aid recipients, giving them good-paying, entry-level jobs on the south side of Chicago.

To further business participation in hiring those on welfare, Edgar asked dozens of Illinois’ largest employers to join in a statewide effort. Several agreed enthusiastically, including AT&T, Sears, Spiegel, Commonwealth Edison, Helene Curtis, Marriott and Dominick’s Finer Foods Inc. The state also created the Employer Clearinghouse in September 1997, featuring a toll-free number businesses can call to find qualified workers from welfare rolls.

As the state trimmed the welfare rolls, those left behind often were individuals most challenged and most difficult to place. Edgar took some of the savings the state had earned from welfare reform and in 1997 put it into a $32 million job preparation and training program, and other initiatives. The money went to private agencies providing training in basic work skills, such as showing up for work despite bad weather, being on time and cooperating in the workplace. The program, which began in 12 inner-city Chicago neighborhoods, was later expanded to the outlying parts of Chicago and then downstate.

To help rebuild poverty stricken inner cities and rural with responsible, affordable communities, Edgar promoted the federally funded caregivers, they can’t leave Empowerment Zones and Enterprise Communities Initiative. The Governor committed $50 million in state funds over 10 years to the 21 communities that submitted plans describing how they would offer jobs and opportunities for families living in poverty.

Because of the Edgar administration’s efforts, Illinois’ welfare caseloads declined by more than half to the lowest level in three decades from a high of 242,000 in 1994 to 109,000 in November 1998. In the first 12 months after Washington returned welfare to the state, 41,000 people found work and the welfare budget fell $100 million. The number of TANF families who were employed rose to 40 percent, compared to just 8 percent in 1990.

One of the state’s success stories was subsidized child care. Without it, Edgar understood that single moms who dominate welfare rolls simply would not and could not work.

“If mothers on welfare can’t leave their children with responsible, affordable caregivers, they can’t leave welfare. What’s more, we can’t let them,” Edgar said in his March 1997 budget address. “It does no good to steer moms off welfare if their babies and toddlers are going to suffer because of inadequate day care. Moreover, without adequate day care, we are going to force the working poor onto the welfare rolls because they can’t hold jobs and provide proper care to their children.”

In fiscal 1998 alone, Edgar boosted child care funding by more than $100 million, the second largest increase in the nation. Waiting lists for day care slots vanished and families made a co-payment based on a sliding scale that rose with incomes. Low-cost loans became available to those seeking to open child care facilities, and the state helped people cut red tape and get quick answers about licensing and standards. Through community colleges, welfare moms were trained as licensed child care providers, providing a double benefit of more child care and additional jobs.

For those working night shifts, the state funded child care during evenings, weekends and rotating shifts. And for those struggling to get off welfare, Edgar offered additional benefits. In 1998, subsidized day care for as many as 15,000 children was in jeopardy due to a change in income eligibility, but the Governor changed state policy, relaxing maximum income levels so these families could continue receiving the child care subsidy.

But subsidies were not enough. Edgar made sure child care was available, affordable and, more important, of high quality. The Governor increased grants from $2 million a year in 1990 to $18 million in 1998 to improve services in more than 350 licensed centers and homes.

The National Governors’ Association in 1997 recognized these innovations with its prestigious Building Block Award.

“Illinois is no longer a deadbeat state,” Edgar told law-makers in his 1998 State of the State address. “We eliminated a mountain of Medicaid debt. And, yes, we have been paying and will continue to pay our bills on time.”

Putting Medicaid on a sound financial footing also bolstered access to care for the program’s clients. Medical providers became more willing to participate in the program with timely payments.

Medicaid historically has occupied a prominent place in Illinois’ budget. It is the single largest claim on the state’s budget, accounting for nearly one of every five dollars. As Edgar understood from the beginning, any budget discussion usually begins or ends with Medicaid.

When Edgar took office, the Medicaid budget story had played like a well-worn record. Medicaid money typically ran out before the end of the fiscal year, leaving medical bills unpaid until the next year’s appropriation became available after July 1. By the following spring, Medicaid would once again run short as the cycle repeated itself.

The national recession in the early 1990s, compounded by sky-rocketing healthcare costs and an underfunded program, worsened Medicaid’s financial problems. The Governor and Illinois withstood the severest blows the economic downturn could deliver and rebounded by rebuilding Medicaid into a program now characterized by its stability. It took tough choices, strict discipline and creative approaches to remedy not only the problems facing Medicaid, but state government generally.

The Governor understood there would be no quick or easy solutions. The situation demanded innovation, additional revenue and economic reforms. The Edgar administration achieved all three.

To capture more federal dollars for Medicaid’s growing needs, Edgar launched the Medicaid Assessment Program in July 1991. This revenue-producing initiative pumped more than $4.2 billion into Medicaid by levying assessments on certain health care providers to capture additional federal dollars for Illinois.

Assessments paid by hospitals, nursing homes and of Medicaid debt. And, yes, facilities for the developmentally disabled helped pay Medicaid services delivered by the three provider groups. These assessment dollars then leveraged new matching federal dollars totaling more than $2 billion in eight years. The hospital portion of the assessment program ended March 31, 1997, while long-term care and developmentally disabled providers continue to pay an assessment, albeit smaller than originally imposed.

The assessment program fomented controversy, to say the least. But without it, the Illinois health care system faced chaos. When lawmakers considered scrapping the program in 1993, Edgar warned of “a billion dollar hole this budget cannot fill and an inexcusable loss of health care for millions of our most needy citizens.” The assessment remained.

Two years later, Medicaid funding was again the center of budget negotiations. Minus the assessment, Edgar asked whether lawmakers wanted to consider the draconian alternatives. Again the assessment survived.

But more and more money alone would not cure Medicaid’s ailments. Edgar made it a priority to “tame this budget basher” and overhaul the system

In June 1995, the Governor, chair of the Medicaid Task Force of the Republican Governors’ Association, appeared before the U.S. Senate Finance Committee and pleaded for more state control over the Medicaid program, freeing the state of micromanagement by bureaucrats in Washington.

At the time he testified, it had been about nine months since Illinois sought a federal waiver to implement a mandatory managed care program providing some cost control for about 1.1 million Medicaid clients. A frustrated Edgar was still awaiting this approval. It would not be until July 1996 that the waiver arrived.

“If we [governors] want to depart from the one-size-fits-all approach to Medicaid, we must go hat in hand to federal bureaucrats,” Edgar said. “They delay and delay on our waiver requests. And they are very reluctant, very reluctant to surrender control. You have given us the responsibility to manage Medicaid. Now give us the flexibility and freedom to do it well.”

Edgar told senators the federal government dictated benefits that were far more generous than those normally provided to working men and women through private insurance programs. At the same time, he bemoaned the state’s inability to negotiate the best possible rates from health providers.

The Illinois tab for federal mandates had grown to $480 million in fiscal 1995, Edgar said, and Medicaid spending between 1991 and 1993 had ballooned beyond the combined funding increases for education, child welfare, prisons, mental health and law enforcement.

While awaiting the federal waiver, the state introduced more voluntary managed care in Medicaid. In 1998, Edgar decided to suspend introduction of a complex mandatory program and focused on other efforts to cut Medicaid costs. The state Department of Public Aid began informing clients about options promoting primary and preventive care as opposed to costly emergency room visits for those not requiring urgent treatment.

While Washington resisted change in the 1990s, Edgar brokered other initiatives to quell a burgeoning Medicaid system. Included were short-term borrowing to pay old bills, eliminating some optional services for adults and freezing reimbursement rates for hospitals and long-term care facilities.

When Medicaid funding was stabilized and the Illinois and national economy improved, steps were taken to assist medical providers. Long-term care facilities serving Medicaid residents received a 6.8 percent across-the-board rate increase Jan. 1, 1997. The Governor proposed and the legislature approved a 3 percent cost of living increase for medical and human service providers effective July 1, 1998. About two months later, he provided a $54 million increase in reimbursements to physicians, dentists and health maintenance organizations and other providers serving enrollees in KidCare and Medicaid clients. And an additional $70 million grant went to children’s hospitals, out-patient hospital services and long-term care facilities to cope with rising costs.