Testimony
Of the
COUNCIL OF STATE ADMINISTRATORS OF VOCATIONAL REHABILITATION
(CSAVR)
for the
Subcommittee on Labor, Health and Human Services,
Education and Related Agencies
Of the
Committee on Appropriations
Of the
United States House of Representatives
In Conjunction with the
Hearing Held on May 13 and 14, 2003
Council of State Administrators of Vocational Rehabilitation’s
(CSAVR) Recommendation for the FY 2004 Appropriation
for the Public Vocational Rehabilitation (VR) Program
Mr. Chairman and Members of the House Appropriations Committee:
This testimony is submitted on behalf of the Council of State Administrators of Vocational Rehabilitation (CSAVR) in conjunction with the hearing that was held on May 13 and 14 before the Subcommittee on Departments of Labor, Health and Human Services and Education and Related Agencies of the House Appropriations Committee. The CSAVR is composed of the chief administrators of the State VR Agencies serving individuals with disabilities throughout the United States and the territories. These agencies constitute the state partners in the State-Federal program of rehabilitation services provided under Title I of the Rehabilitation Act. State VR agencies provide employment, training, rehabilitation and support services to over 1.2 million individuals with disabilities annually. In FY 2001, these agencies placed 233,000 individuals with disabilities in competitive employment.
The CSAVR, founded in 1940 to furnish input into the State-Federal Rehabilitation Program, provides a forum for state administrators to study, deliberate, and act upon matters affecting the rehabilitation and employment of individuals with disabilities. The Council serves as a resource for the formulation and expression of the collective points of view of state rehabilitation agencies on all issues affecting the provision of quality employment and rehabilitation services to persons with significant disabilities.
CSAVR’s Recommendation for the FY 2004 Appropriation
For the Public Vocational Rehabilitation Program
The FY 2002 appropriation for the Public VR Program was $2.48 billion, an increase of 3.4 percent over the FY 2001 appropriation. The President’s request for FY 2003 proposed to combine the funding for four discretionary programs (Projects with Industry, Supported Employment State Grants, Recreation Projects, and Migrant Farm Worker Projects) into the appropriation for the Public VR Program. While the President’s proposal for FY 2003 would have resulted in an increase above the mandated CPI increase for VR (i.e., 2.1 percent for FY 2003), the CSAVR does not support the consolidation of these discrete programs that address the needs of specific target populations and that complement the services and supports available through the Public VR Program.
The President’s budget recommendation for FY 2004 was based on the passage of his 2003 budget which recommended the consolidation of the four discretionary programs; hence, he proposed the mandated CPI increase above his 2003 recommendation. Based on the internal and external challenges facing the Public VR Program and the increasing numbers of individuals seeking assistance from VR, the CSAVR recommends an appropriation for FY 2004 that would include an increase of $253 million above the FY 2003 appropriation for the Public VR Program. This represents an increase of approximately 10 percent above the FY 2003 appropriation.
The Public Vocational Rehabilitation Program
The Public Vocational Rehabilitation (VR) Program is one of the most cost effective programs ever created by Congress. It enables hundreds of thousands of individuals with disabilities to go to work each year and become tax-paying citizens. Each year, the Program assists over 1.2 million individuals with disabilities by providing employment, training, rehabilitation, and supports services to eliminate barriers to employment. Of those served each year, more than 230,000 enter competitive employment. The basic funding mechanism for the Program, which requires a state match of 21.3 percent, creates a state-federal partnership that has worked for over 83 years and has assisted more than 14 million individuals with disabilities to engage in employment and become tax-paying citizens.
Those individuals who received assistance from the Public VR Program in FY 2001 will:
¨ Earn approximately $3.5 billion in wages in their first year of work;
¨ Pay back the cost of their rehabilitation services, through taxes, in just 2-4 years;
¨ Benefit the combined Federal and State tax treasuries by$2-4 in revenues for every VR dollar spent over subsequent years of work;
¨ Benefit themselves with $10 in earnings for every VR dollar spent over their subsequent years of work; and
¨ Save the Federal Treasury or the Social Security Trust Fund $5 for every dollar spent, totaling approximately $655 million in savings in Federal Fiscal Year 2002.
The Rehabilitation Act mandates that the annual Federal appropriation for the VR Program grow at a rate at least equal to the change in the Consumer Price Index (CPI) over the previous fiscal year. While this mandate was intended to create a floor for the VR appropriation, Congress has not appropriated funds above the mandated CPI increase for a significant number of years. This is particularly problematic because the formula used to distribute these funds, which is based on a state’s per capita income and population, results in significant variations in the increases in individual State’s allotments. When the increase is limited to the CPI increase and the formula is applied, not all states receive increases that are equal to the annual rate of inflation.
Challenges Facing the Public VR Program
Over the last ten years, the Public VR Program has faced a number of external challenges that have been compounded by these minimal increases in Federal funding.
Special Education: The federal appropriation for special education increased by approximately 332 percent between 1993 and 2003. During the same time period, the federal appropriation for the Public VR Program increased by only 26 percent. Increases in special education funding have increased the demand for VR services as special education students leave school and seek adult services, including vocational rehabilitation. Many of these students will need VR services when special education services end, in order to participate in post secondary education and go to work. State VR agencies are severely under-funded to meet these demands.
Impact of the Workforce Investment Act of 1998 (WIA): As states implement WIA’s One-Stop approach to the delivery of employment and training services, increasing numbers of individuals with disabilities are being referred from generic employment and training programs to State VR Agencies for services. In addition, many states are asking State VR Agencies to provide financial assistance with expenses that are not authorized expenditures for the Public VR Program (e.g., setting up resource rooms for potential job seekers and providing accommodations for individuals with disabilities who have not been determined eligible for VR services). While VR’s involvement in State Workforce Investment Systems is critically important, WIA has placed yet another financial burden on an already strained program, reducing the percentage of VR funds that are available to provide services and supports to eligible individuals with disabilities.
Impact of the Ticket to Work and Work Incentives Improvement Act of 1999 (TWWIIA): TWWIIA was designed to address disincentives to work found in Social Security’s disability programs [Social Security Disability Insurance (SSDI) and Supplemental Security Income (SSI)] and to increase employment opportunities for individuals enrolled in these programs. Research has shown that less than one half of one percent of these individuals leave the Social Security disability rolls each year as a result of paid employment. Provisions in TWWIIA that provide extended Medicare and Medicaid coverage to such individuals when they enter or return to the workforce is expected to encourage more beneficiaries to seek employment. As the Ticket to Work Program is fully implemented over a three year period, many people receiving tickets will go to the Public VR Program for information and assistance. With a key feature of the Ticket Program being an outcome payment system and with private providers who are approved to function as employment networks under the program having the ability to choose who they serve, SSDI and SSI recipients with the most significant disabilities and most costly service needs will be referred to the Public VR Program where they are presumptively eligible for services.
To date, 4 million tickets have been mailed to beneficiaries. Of those receiving tickets, 16,000 are using them to access services to go to work. Of the 16,000 tickets being used, 14,000 have been assigned to State VR Agencies. Presently, 87 percent of the tickets in use are assigned to State VR Agencies. With only minimal increases in VR funding over the last decade, this situation creates yet another challenge for the Public VR Program.
Temporary Assistance for Needy Families (TANF): Most states have had significant success in reducing their TANF or welfare to work caseloads, with a reduction of as much as 40 percent in some states. While welfare caseloads have been shrinking, the composition of the remaining caseload has changed. A recent General Accounting Office (GAO) report found that individuals with disabilities and family members of individuals with disabilities represent approximately 44 percent of the remaining TANF population. Many of these individuals have previously unidentified or undisclosed disabilities. Many have multiple and significant barriers to employment. State welfare agencies are increasingly turning to State VR Agencies for assistance in meeting the needs of individuals with disabilities who are left on the TANF caseloads. With only minimal increases in funding, State VR Agencies are not equipped to deal with the increase in referrals from State welfare agencies.
Impact of Assistive Technology: During the past decade, assistive technology has become a fundamental tool, making it possible for individuals with disabilities, including individuals with the most significant disabilities, to participate in training and employment programs and seek employment opportunities in the competitive labor market. Some State VR Agencies report that the number of customers benefiting from the use of assistive technology has doubled in recent years. While the cost of some assistive technology has decreased, specialized products needed by relatively small groups of individuals with disabilities remain costly. Additional costs are incurred because products used by individuals with disabilities need to be maintained, repaired and updated. In addition, individuals receiving assistive technology from State VR Agencies often need to be trained on how to use that technology. As a result of these factors, the overall expenditure of VR funds on assistive technology is expected to increase each year.
Impact of the Olmstead Decision: Many states are focusing on implementing the Supreme Court’s Olmstead decision, which mandates that individuals with disabilities who are residing in institutions be moved into the community whenever possible. The Bush Administration has pledged to enforce this decision vigorously. As individuals with disabilities are moved out of institutions and into local communities, many will eventually seek services from the Public VR Program to assist them in obtaining employment. With only minimal increases in VR funding, this creates yet another challenge for the severely under-funded Public VR Program.
Attracting and Retaining Qualified Counselors: The role of the vocational rehabilitation counselor is the cornerstone of the Public VR Program. As the key professional in the system, the VR counselor is responsible for interacting with individuals with disabilities who are seeking or receiving VR services to assist them in entering the workforce and becoming economically independent. During the last reauthorizations of the Rehabilitation Act, Congress mandated that in order to be qualified to serve persons with disabilities under the Public VR Program, rehabilitation counselors must obtain a Master’s Degree or meet the highest state standard for persons in that or similar professions. In many states, from one third to one half of the incumbent counselors do not meet the state standard as now required by law. Consequently, these counselors must be provided with additional education and training. With only minimal increases in funding, State VR agencies are not able to offer competitive salaries to attract and retain qualified individuals to serve as VR counselors.
Providing VR Services Under an Order of Selection
The VR Program is severely under-funded to meet the mandates in the Rehabilitation Act and the internal and external challenges facing the Program. Under the current appropriation, the Program can meet the needs of only a small percentage of eligible individuals (i.e., approximately one in twenty who could potentially benefit from VR services). Under Title I of the Rehabilitation Act, each State VR Agency is required to monitor its resource utilization on an ongoing basis and project whether or not the resources available to it, both fiscal and human, are sufficient to provide the full range of VR services to current program participants, and to provide services to the individuals who are expected to apply and be determined eligible for program participation during the upcoming fiscal year. If the State VR Agency determines that its fiscal or human resources are not sufficient to provide the full range of VR services to all individuals currently participating and projected to participate in the program, then the Agency is required by federal law to implement an Order of Selection procedure. An Order of Selection establishes a legal waiting list for services and prioritizes individuals to be served based on the significance of their disability and the number of functional limitations resulting from the disability. The greater the number of functional limitations, the more likelihood the individual will receive services. Due to the inadequacy of VR’s resources, thirty-seven (37) State VR Agencies found it necessary to implement an order of selection in FY 2002.
Longitudinal Study Proves Public VR Works
In the Fall of 2002, a Federal study commissioned by the Rehabilitation Services Administration (RSA) within the Department of Education, concluded that the Public VR Program is effective at putting people with disabilities to work in good jobs with opportunities for advancement. This “Longitudinal Study of the Vocational Rehabilitation Services Program”, that followed 8,000 VR clients over a three year period, provided that VR service contribute significantly to positive employment outcomes for people with disabilities. Results of the study show that 69 percent of clients who exited the Public VR Program achieved an employment outcome – 75 percent of whom are in competitive jobs that are in professional, managerial, technical, service or clerical/sales positions.
Individuals who completed VR services fared far better than similar individuals who did not complete services or who were eligible but did not receive services, strongly indicating that VR services are effective in assisting individuals with disabilities to obtain employment. Additional findings include:
¨ 83 percent of VR consumers who secured employment during the Study REMAINED EMPLOYED at the end of the first year of the Study.
¨ Three years after job placement, 76 percent of these VR consumers continued to be employed and had received increases in salaries and benefits.
¨ The average hourly earnings had increased from $7.33 per hour in year one to $9.62 per hour after three years.
¨ 36 percent of VR clients in competitive jobs received employer health benefits at exit; this rose to 58 percent three years later (the national average is 52 percent for all employed individuals);
¨ At exit from the Public VR Program, 32 percent of consumers were in competitive jobs earning wages at 200 percent of the Federal poverty level; three years later, 46 percent were at 200 percent of the Federal poverty level;
¨ 39 percent of consumers who participated in the Longitudinal Study had received some form of public assistance at entry to the Public VR Program; three years later, after case closure, the percentage declined to 26 percent;
¨ 44 percent no longer needed public assistance;
¨ 20.7 percent utilized assistive technology – special computerized devices, portable speech synthesizers, software – in helping to enter the workplace;
¨ the quality of the relationship between the consumer and the qualified VR counselor was significantly related to employment and earnings levels; and
¨most significantly, 66 percent of the VR clients entering competitive jobs said if they had to pay for services, they would purchase “exactly the same” services provided by the Public VR Program.
In summary, the Public VR Program in each state and territory is a strong State/Federal partnership that promotes the independence and employment of individuals with significant disabilities, and maintains long-standing partnerships with a wide array of individuals, public and private providers of vocational rehabilitation services and supports, and, of course, numerous employers and businesses.
In closing, the CSAVR would like to thank the Chairman and Members of the Subcommittee for the opportunity to submit written testimony. If you have any questions or need additional information on the successes of the Public VR Program, please do not hesitate to contact Carl Suter at CSAVR (301-654-8414).
