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A Disability Policy Research Forum

Mathematica Policy Research Presents. A Disability Policy Research Forum. On The Air. January 20, 2010 12:00 to 1:30 pm. "Is a Makeover Needed for Federal Funding of Vocational Rehabilitation Services?". Speakers: Todd Honeycutt, Mathematica Policy Research

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A Disability Policy Research Forum

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  1. Mathematica Policy Research Presents A Disability Policy Research Forum On The Air January 20, 2010 12:00 to 1:30 pm

  2. "Is a Makeover Needed for Federal Funding of Vocational Rehabilitation Services?" Speakers: Todd Honeycutt, Mathematica Policy Research Yunsian Tai, Government Accountability Office Carl Suter, Council of State Administrators of Vocational Rehabilitation Disability Policy Research Forum January 20, 2010

  3. Closures Are the Tip of the Iceberg: Exploring Variation in Who Receives State Vocational Rehabilitation (VR) Services David Stapleton ● Todd Honeycutt ● Bruce Schechter Presented at the Disability Policy Research Forum Washington, DC January 20, 2010

  4. Acknowledgments • This research was sponsored by the Department of Education’s (ED’s) National Institute on Disability and Rehabilitation Research under a grant to Cornell University (no. H133B031111—Rehabilitation Research and Training Center on Disability Demographics and Statistics).

  5. Disclaimer • The contents of this presentation do not necessarily represent the policies of ED or any other federal agency (Edgar, 75.620 [b]).

  6. State VR Agencies • VR represents the largest employment-related federal expenditure for persons with disabilities • Researchers have studied VR acceptance rates, services, and closures/outcomes but not the extent to which the larger population with disabilities receives VR services • The latter could vary due to state-level demographic and economic factors as well as agency-level variables

  7. Research Questions • Nationally, what proportion of people with disabilities exit the VR program after receiving services? • Across demographic, educational, and disability subgroups • How much do states vary in the proportion who exit after receiving VR services? • Across demographic, educational, and disability subgroups

  8. Data Sources • RSA-911 • VR administrative data • Fiscal year 2007 • American Community Survey (ACS) • Nationally representative survey conducted by the Census Bureau • State and subgroup estimates • Calendar year 2007

  9. Methods • Closure ratios • Numerator = closures after service receipt (RSA-911) • Those who have completed an individualized plan for employment, received VR services, and exited with employment (status 26) or before becoming employed (status 28) • Denominator = estimated number of people with disabilities (ACS)

  10. National Closure Ratio of 1.3 Percent in 2007

  11. Closure Ratios • Some numbers are likely underestimated • Those receiving VR services in a given year • Those interested and eligible for services • Those who could benefit from services • Closure ratios are higher for some subgroups • Males • 18- to 24-year-olds • Black individuals • Those with higher education • Considerable state variation

  12. Closure Ratios Vary from State to State

  13. Closure Ratios by Sex and Age

  14. Closure Ratios by Race, Ethnicity, and Education

  15. State Variation in Closure Ratios • State variation reflects how well consumer needs are met at the local level • Closure ratio for Vermont is six times that of Washington State • Some states have higher closure ratios for specific subgroups (e.g., transition youth) • Some subgroups are less likely to receive services in any state (e.g., older working-age population)

  16. Closure Ratio Is Inversely Proportional to Disability Prevalence Source: RSA-911/ACS; www.ilr.cornell.edu/edi/disabilitystatistics.

  17. Closure Ratio Is Proportional to Federal VR Funding Source: RSA-911/ACS; GAO 09-798.

  18. Conclusion • Starting point for further comparisons across states and subgroups to understand the state and agency predictors of closure ratios • High ratio does not imply high performance, and vice versa

  19. Conclusion (cont’d.) • Should VR agencies direct resources to groups with lower closure ratios? • What role does funding play? • Federal VR funding is based on total state working-age population and per capita income, not state disability population and local costs of services

  20. Contact Information David Stapleton Center for Studying Disability Policy Mathematica Policy Research 600 Maryland Ave, SW, Suite 550 Washington, DC 20024 (202) 484-4224 dstapleton@mathematica-mpr.com www.DisabilityPolicyResearch.org

  21. Contact Information (cont’d.) Todd Honeycutt Mathematica Policy Research P.O. Box 2393 Princeton, NJ 08543-2393 (609) 945-3397 thoneycutt@mathematica-mpr.com www.DisabilityPolicyResearch.org

  22. Vocational Rehabilitation Funding Formula Presentation to the Disability Policy Research Forum Mathematica Policy Research January 20, 2010 Yunsian Tai

  23. Our Requesters • Rep. George Miller, Chair Rep. John Kline, Ranking Member House Committee on Education and Labor • Rep. Howard McKeon

  24. The Current Funding Formula • The minimum allotment is 1/3 of 1% of total VR funds appropriated ($9.5 million minimum in FY2008). • The allotment percentage cannot be less than 33 1/3% or higher than 75%.

  25. Key Components FY1978 Allotment Per Capita Income Factor Squared Per Capita Income State Population • The minimum allotment is 1/3 of 1% of total VR funds appropriated ($9.5 million minimum in FY2008). • The allotment percentage cannot be less than 33 1/3% or higher than 75%.

  26. Research Questions 1. To what extent does the current Vocational Rehabilitation (VR) funding formula meet generally accepted equity standards? 2. What are options for revising the formula to better meet these standards?

  27. Equity Standards for Funding Formulas • Beneficiary equity: Federal funds are distributed so that each state, with their federal funds, can provide the same level of services to each person in need. • Requires measures of need population & cost of providing services. • Taxpayer equity: Federal funds are distributed so that each state, with both state and federal funds, can provide the same level of services to each person in need. Also, states contribute about the same proportion of their resources to the program. • Requires measures of need population, cost of providing services, & state resources.

  28. Scope & Methodology • Analyzed numerous data series • Data sources: Census Bureau, Bureau of Labor Statistics, Department of Housing and Urban Development, Department of the Treasury, Department of Education • 3 experts on disability data reviewed portions of our work (Andrew Houtenville, Mitch LaPlante, David Stapleton) • Conducted survey of 80 VR agencies (93% responded) • Interviewed disability experts, advocacy groups, officials at 11 VR agencies in 9 states, and representatives of state rehabilitation councils in 5 states

  29. The Current VR Funding Formula Falls Short of Meeting Equity Standards • Beneficiary equity is not met. • The formula’s measure of need population is imprecise. • Lacks a measure of cost of services. • Taxpayer equity is not met. • The formula’s measure of state resources is not comprehensive. • In FY2008, 27 percent of VR funds were distributed based on states’ fiscal year 1978 allotments.

  30. General Population is an Imprecise Measure of States’ Need Populations Percentage of Each State’s Population in Working Age with a Disability, 2007 DC 6.5 percent or less 6.6 to 7.6 7.7 to 8.7 8.8 percent or more National: 7.6% Source: GAO analysis of Census Bureau’s American Community Survey data

  31. Example of Two States with Similar Populations but Different Working-Age Disability Rates, 2007 Source: GAO analysis of Census Bureau’s American Community Survey data

  32. The Formula Does Not Account for State Differences in the Cost of Services • We estimated costs based on average state wages and rents • Bureau of Labor Statistics (BLS) data on wages (Quarterly Census of Employment and Wages – Education, Healthcare, and Social Assistance Industry Sector) • Housing and Urban Development (HUD) data on rents (Fair Market Rents) • Costs vary among states: • Idaho’s costs: estimated to be13% belowthe national average • Massachusetts: estimated to be 13% abovethe national average • By not taking into account cost differences, VR allocations purchase fewer services in states that have higher costs.

  33. Estimated State VR Allotments Per Working-Age Person with a Disability, Cost-Adjusted, Based on FY2008 Funding DC Less than $115 $115-128 $129-150 More than $150 Median: $128 Source: GAO analysis of data from Education, Census Bureau, BLS, HUD, and responses to GAO survey.

  34. The Formula Does Not Capture Certain Taxable Resources • The formula’s measure of state resources is limited to per capita income. It does not capture: • Certain types of corporate income • Certain types of income produced within a state that is received by out-of-state residents • The Treasury Department’s Total Taxable Resources is a more comprehensive measure. • Per capita income particularly understates the resources of energy-exporting states (Alaska, Wyoming) and states with numerous corporate headquarters (Delaware).

  35. State VR Agency Opinions on the Funding Formula • 62% expressed the opinion that the formula is appropriate. • Opinions on the different elements of the formula varied. • Some state officials felt that the current formula does not provide them with adequate funds. • Among states with below median allotments per working-age person with a disability, 72% had a VR agency under an order of selection in FY2008, compared to 52% of states with above median allotments.

  36. Options for Introducing Greater Equity for Taxpayers or Beneficiaries • Partial Beneficiary Equity Formula • Need population • Full Beneficiary Equity Formula • Need population, cost of services • Taxpayer Equity Formula • Need population, cost of services, state resources

  37. Redistribution of Funds under Three Formula Options Source: GAO analysis of data from Education on VR grants in FY2008, Census Bureau’s 2006 and 2007 American Community Survey, Treasury’s Total Taxable Resources data, BLS’ Quarterly Census of Employment and Wages, HUD’s Fair Market Rents data, and responses to GAO survey. * Our formula options would retain the same minimum allotment that the current formula provides, 1/3 of 1% of the total appropriation for the VR program. In FY2008, 6 states received the minimum allotment.

  38. Survey Responses on Options for Revising the Formula • Our survey asked state agencies to provide their opinions on three approaches generally based upon the equity standards. • Most state agencies expressed reservations about options roughly based on partial beneficiary and taxpayer equity standards. • Opinions were split on an option roughly based on full beneficiary equity: • 45% expressed support • 47% expressed disapproval

  39. Options for Phasing in Changes to Minimize Disruption to State Programs • Phase-in Period: Combination of old and new formulas for a set period of time, with a gradual increase in funding based on the new formula each year. • Hold Harmless Provision: Set limits on the amount of funds a state can lose.

  40. Our Report GAO, Vocational Rehabilitation Funding Formula: Options for Improving Equity in State Grants and Considerations for Performance Incentives, GAO-09-798 (Washington, D.C.: Sept. 30, 2009)

  41. Carl Suter, Discussant

  42. Q & A

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