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Monday, March 8, 2010
Finnegan: Eliminate four agencies for $87M in savings
By News Release @ 7:57 PM :: 6906 Views :: Maui County, Education K-12, Energy, Environment

Full Text: Floor Speech by House Minority Leader Lynn Finnegan March 8, 2010

Mr. Speaker,

I rise with reservation on HB 2200 HD1. The people of Hawaii are looking to us to create an efficient government, define core services, and do everything possible to live within our means. Although I will be supporting this budget, I have reservations as I think we have not done a good enough job at accomplishing the goals that I stated.

All members of this body are aware of the significant budget predicament that Hawaii currently finds itself in.  No one disagrees on this point.  Mr. Speaker, where the members of this body disagree is their belief of how to best weather this storm.  When it comes down to it we really have to ask ourselves whether we're willing to take the appropriate actions necessary by asking tough questions.  In short, the Administration has taken steps to reinvent government versus temporarily tinker with it.

As members of the Executive Branch, each Department Director performed their executive branch responsibility by reviewing its own strengths and weaknesses, eliminating redundancies and inefficiencies, and making needed adjustments.  Indeed, the Administration performed a programmatic analysis of its own operations, taking into account the resulting impact on services of lay-offs.  In the Legislature's attempts to undo the Administration's efforts to become more efficient and reinvent government, we've reversed some of their work because of philosophical disagreements or some think partisan jockeying.  Case in point, this measure restores 1,012 positions in spite of the reality that labor costs contribute to 70% of the State's budget.  Most of these positions are not funded, but their restoration implies their future potential to be filled.  This means that despite the needs that come around when times get better, the Legislature is giving the signal to fill positions from an old plan.  This is not reinventing government.  Now is the time to really reinvent and reform government versus temporarily tinkering with it to achieve the façade of reform.

Departmental leadership is closest to the everyday running and management of the executive branch.  Often, when this Administration and its Departments try to innovate or streamline their delivery of services and programs, the legislature has an immediate gut reaction.  The Department of Human Services epitomizes the Legislature's often negative knee-jerk reaction to reinventing government.  Nationally, Director Koller has been honored for her work as Governing Magazine's "Public Official of the Year."  DHS has made a genuine effort to increase the quality of services and care while reforming the bureaucratic red tape that can often hamper the agency's mission.

There are a few strong criticisms of the Department of Human Services and the management decisions of Director Koller. The criticisms center around two programs, the Eligibility Processing Operations Division (EPOD) reorganization and the Child Welfare Services division. These two divisions service people in our state who are considered some of the most vulnerable. I am going to focus on these two areas as examples of how difficult it is to re-invent and create an efficient government.

Upon careful review of the proposed RIFs in this area that handles the EPOD program, I have come to the conclusion that we are making the wrong decision by restoring these positions in the HD1. One would think that eliminating positions in these areas would lessen services. I’m going to take the time to explain why the opposite is true.

Over the weekend I read the “Program Access Toolkit” for 2010 provided by the federal government, a guide for States Agencies on Improving Access to the Supplemental Nutrition Assistance Program or SNAP. The guidebook focuses on eligibility and access for this program.

EPOD opponents are saying that customers could no longer receive in-person help when applying for benefits. Not true. Customers could still receive in-person help on all Islands from DHS staff and community partners. Customers would have the added options of applying online or by phone, which will make it faster and more convenient to apply.

EPOD opponents are saying that customers would get trapped in an automated phone system. Again, not true. Customers who call DHS would speak directly with an eligibility worker, just as they do now. Customers could also communicate with eligibility workers via a Webcam, if they prefer. The federal government encourages phone interviews for the Supplemental Nutrition Assistance Program (SNAP).

EPOD opponents are saying that fraud would increase if interviews are not conducted in-person. Again, not true. The federal government points out that telephone interviews in the SNAP program have not produced increases in fraud, contrary to a common myth. In fact, a customer's telephonic signature (a voice recording) is considered more reliable than an electronic signature.

HGEA and certain Legislators are opposing EPOD because it would mean the loss of around 230 public sector union jobs. These positions would no longer be needed because EPOD would significantly improve the workflow in processing applications.

It is unfortunate that some union workers would face layoffs. However, we must remain focused on the prime mission of delivering benefits and services to customers as quickly and efficiently as possible.

EPOD would also generate significant cost savings for taxpayers during the worst economic downturn in State history. That would free up money to be used for other important needs.

This past Saturday there was an opinion editorial on this EPOD program stating that “Hawaii can no longer afford a ‘horse-and-buggy’ government that is labor-intensive, costly, and slow” and also states “Reform comes with a price. In this case, her proposal would close 31 offices and eliminate 230 jobs, while retaining 289 staffers. That is making her unpopular among those who would lose their jobs and the Hawaii Government Employees Association, which represents them.” Speaker, I would like to ask permission to insert this article into the journal.

The committee report also finds that DHS has used questionable judgment and quotes an article about consultant, SANDIE HOBACK. The media article this report cites is a small, online publication and they quoted a long-term welfare recipient who doesn’t like how the system works. That is no basis for calling the consultant’s competency into question. She is a nationally respected consultant who has helped many states upgrade their human services. This consultant helped Director Koller develop the SEE Hawaii Work (Supporting Employment Empowerment) program that was launched in 2005. Nearly 2000 welfare recipients have participated. 921 completed their SEE assignments and 783 or 85% have successfully obtained unsubsidized employment – many of them for the first time in their lives – and are no longer on the welfare rolls.

The second area and example of major disagreement is in the Child Welfare Division. Under Director Koller’s leadership and management the number of children in state foster care has decreased by 50%, from about 3000 in 2003 to 1400 children today – the lowest number since 1993. More importantly, Hawaii now has one of the lowest rates of child re-abuse rates in the country. Prior to implementing this new direction in 2003, DHS removed children from their biological families at up to four times the national average with no improvement in their safety. The HD1 reverses the nationally recognized strategy that was implemented by Koller by cutting purchase of contract agreements that provide prevention services that are proven to keep children safe. Remember former Rep. Mike Kahikina and the cries for help as kids were being ripped from their home.

So let’s address some comments in the committee report.


Caseloads Have Not Quadrupled


  • Child Welfare Services (CWS) caseloads have not quadrupled, as claimed in a House Finance Committee report.
  • The CWS intake data shows about a 20 percent increase in referrals being assigned for investigation, but that is nowhere near a 400 percent increase, as stated in the House report.
  • More significantly, child abuse or neglect was only confirmed in about 38 percent of the investigated cases.
  • In other words, no safety issues were identified in 62 percent of the investigated cases, so these cases were closed and do not require further CWS intervention.
  • DHS reviewed intake data in February 2010 and found that many of these cases did not have safety issues that warranted an investigation. These reports should have been responded to by community providers.
  • Part of the problem was that some CWS employees were not applying our standardized intake and assessment tool correctly.
  • This tool – which determines the most appropriate response to a report of abuse or neglect – was developed by DHS with support from the Federal Administration of Children and Families, in partnership with the National Resource Center of Child Protection.
  • Another reason for the 20% increase in investigations was the Family Court’s bypassing of CWS triage procedures.
  • These court-ordered investigations, which stemmed from temporary restraining orders and divorce proceedings, should have been addressed by providing family strengthening and voluntary case management services. Investigations were not appropriate.


CWS Investigations are Timely

  • For CWS cases assessed as having safety concerns, investigations should take place within two working days from the time the intake is assigned to a unit for investigation.
  • For cases that are not assessed as having safety concerns, investigations should take place within five working days.
  • In fiscal year 2009, CWS conducted a face-to-face contact for all cases assigned for investigation within 3.72 days – a significant improvement from the 15 days between the acceptance of the report and face-to-face contract in FY 2002.
  • The volume of intakes assigned for investigation without safety concerns, plus the unexpected retirement and departure of employees, are having an impact on the current CWS response time.
  • However, CWS is looking at strategies to ensure appropriate assignments by intake workers and to decrease assignment of intakes that can be triaged or do not require an investigation.


CWS Positions Should Not be Restored by Decreasing Contracted Services

  • CWS would appreciate more staffing, but taking services away from families and children to fund staff positions is the wrong approach.
  • In July 2003, Hawaii’s results from the first Federal Child and Family Services Review (CFSR), a federal audit of state’s child welfare systems, were dismal.
  • A major finding was that Hawaii removed children from their biological families up to four times higher than the national average without meeting safety outcomes.
  • Furthermore, many of these children were returned to their families within 100 days, meaning they should not have been removed in the first place.
  • To address these problems, Hawaii launched an aggressive, federally mandated Program Improvement Plan (PIP) for CWS.
  • One of the improvements was the implementation of a Differential Response System to better assess each report of child abuse or neglect and then determine the most appropriate, most effective and least intrusive response by CWS or a community partner.
  • CWS also expanded its partnerships with community groups to expand the array of services to support and strengthen families.
  • Because of the PIP, Hawaii passed all six national standards, which are: Recurrence of maltreatment, incidence of child abuse and/or neglect in foster care, foster care re-entries, length of time to achieve reunification, length of time to achieve adoption and stability of foster care placement.
  • More importantly, CWS has safely reduced the number of children in foster care to a 16-year low. The number dropped from about 3,000 children in 2005 to 1,400 currently.
  • Hawaii also has one of the nation’s lowest rates of child re-abuse, meaning our children are among the safest in America.
  • It would be counterproductive for the Legislature to cut CWS purchase of service contracts, which have significantly helped at-risk families.
  • These programs include: `Ohana conferencing, youth circles, family finding, family strengthening, comprehensive counseling, child protective multidisciplinary team, sex abuse treatment, Neighborhood Places, domestic violence shelters, teen shelters, substance abuse assessment and monitoring, training and support of resource families, recruitment and training of adoptive families for difficult to place children, and fingerprinting of resource families.
  • These contract cuts would impede the ability of CWS to minimize foster care placements and to reunify families, as required by federal statutes.
  • Hawaii stands to lose $35 million in federal Title IV-E funding if the Legislature cuts these community-based services.
  • Without an adequate array of services for at-risk families, an increasing number of children will be removed unnecessarily from their biological parents. That happened previously when services were slashed.
  • In 1995 and 1996, when purchase of service contracts were decreased significantly, workers were not able to refer families for services to prevent removal by ensuring the children’s safety in the home.
  • Unnecessary removal is harmful to children and is contrary to national best practices.
  • Without adequate services, even a fully staffed CWS would not be able to ensure the safety of children and comply with state and federal requirements.
  • As a result, Hawaii would be at risk of losing federal funds, and possibly facing costly legal challenges similar to the Felix case, when families are not provided access to necessary services.

Mr. Speaker, as you can tell, my perspective is much different than those of the majority.


I agree with the comments on our bond rating as stated in the committee report, but would like to put them in context of the broader national happenings. Due to the unprecedented challenging fiscal times experienced across the globe and our country, many states are also receiving negative outlooks by bond rating agencies. Hawaii has still remained favorable in the eyes of investors as Director Kawamura sold more bonds than expected, 500m instead of 312m, during its last bond sale.

However, it would not be fair to just criticize and not offer other areas that the Minority caucus could suggest for cutting.


Mr. Speaker, in these hard times we need to make hard choices. We should be looking at curbing our expenses in Medicaid. I understand that not everyone has the benefit and luxury of being able to work and we need to provide help and services to these people, but Mr. Speaker on that same token we cannot continue to furnish unlimited health coverage, through Quest, to able bodied adults. To not look at reducing costs by changing unlimited coverage to reasonable and still generous health coverage is not responsible. The Department of Human Services is recommending that those on Quest receive the benefits of those in Quest Ace/Net which would result in approximate savings of 78 million dollars.

Comparatively speaking, both public and private workers are experiencing these changes to their benefits and costs. Mr. Speaker, in these hard times we are reducing benefits for our State employees, increasing their cost of premiums, and reducing the amount of money they take home through furloughs. However this body has continually fought the Director on these changes. The truth is Mr. Speaker this change will not take away all the benefits, but curb some of the out of control spending in Quest for non-pregnant and able bodied adults. We are not suggesting that we make these changes to the Quest Expanded Access program for the Aged, Blind, and Disabled. We are just asking that able-bodied Quest recipients join in with our State Employees and Private sector employees and absorb some of those cuts. We are asking them to help us to live within our means just like we are asking of our State Employees.

Hawaii Occupational Safety and Health Division (HiOSH)

The Federal government and state government both regulate workplace safety, this is redundant. If we get rid of HiOSH, the federal government will continue to regulate workplace safety through OSHA. 25 states already do without a state workplace safety regulatory body, letting the feds do the regulating.

Because this division has a history of operational and fiscal mismanagement, as pointed out in SCR for this bill, this cut would be worth the $3,866,779 in general funds savings for FY 2011, and every year thereafter.

Office of Community Services (OCS)

The Office of Community Services is another duplicative state agency, except the duplication is work of other state agencies, departments, or other private sector entities such as workforce training and development, grant management, and provision of legal services to the indigent, to name a few. Again, these are services that are still provided by other entities.

I have friends in that agency, and many of you do too. But this is the time for hard decisions, and redundancy in government is an area we should be looking at to cut. Eliminating this office would result in savings of approximately $9,743,897 in FY 2011, and every year beyond.

For comparisons sake, this is almost the exact amount of money needed to fund the DISH appropriation bill that we just passed out of the House last week.

Office of Language Access (OLA)

Since its inception, the Office of Language Access has fallen short of its mandate, not promulgated the necessary rules to effect its purpose, and has suffered budget and position cuts by past legislatures.

More importantly, there is no federal mandate to do this service, simply an aspiration. And while it is a good aspiration, the Department of Human Services is fulfilling the aspiration on its own, without the OLA. And so can other departments and divisions.

If we haven't fully funded them in the past, there is no need at this time to continue the office. Eliminating OLA would save us approximately $305,029 in FY 2011, and every year beyond.

State Health Planning and Development Agency (SHPDA)

This is the agency responsible for the Certificate of Need program, and in years past, we have advocated for its demise, the program and the agency. 14 states have repealed this outdated program, and more are debating its demise. Because of our health care market, I would believe that private entities would apply just as much scrutiny, if not more, when it comes to the purchase of new medical technologies and equipment.

Eliminating SHPDA would save the state approximately $670,741 in FY 2011, and every year beyond.

The total savings from the cuts called for by just these 4 ideas equals $14,586,446 in FY 2011, and every fiscal year thereafter. Another way of looking at it is that we could save $87,518,676 over the current 6 year financial plan.

Mr. Speaker, Change is difficult to accomplish, but it is something we must do. We still have the second half of this legislative session to go. I hope that we can continue to look for ways to reinvent and create a more efficient government.

Rep. Lynn Finnegan addresses Hawaii State budget Part 1 & 2

---30---  Part 1  Part 2



Rep. Gene Ward addresses Hawaii State Budget Part 1 & 2  Part 1  Part 2



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