Program Review and Investigations Committee


Minutes of the<MeetNo1> 7th Meeting

of the 2001 Interim


<MeetMDY1> April 16, 2001


The<MeetNo2> 7th meeting of the Program Review and Investigations Committee was held on<Day> Monday,<MeetMDY2> April 16, 2001, at<MeetTime> 10:00 AM, in<Room> Room 131 of the Capitol Annex. Senator Katie Stine, Chair, called the meeting to order, and the secretary called the roll.


Present were:


Members:<Members> Senator Katie Stine, Chair; Representative Gippy Graham, Co-Chair; Senators Charlie Borders, Brett Guthrie, Ernie Harris, Paul Herron Jr, Vernie McGaha, Dan Seum, and Ed Worley; Representatives Adrian Arnold, Sheldon Baugh, Dwight Butler, Jack Coleman, Charlie Hoffman,  and Dottie Sims.


Guests:  Ann Swango, PACE; Natalie Wilson, Chair, Child Support Guidelines Commission; David Cathers, Child Support Guidelines Commission; Louise Graham, Child Support Guidelines Commission; Tom Mercer, Deputy General Counsel, Cabinet for Families and Children.


LRC Staff:  Ginny Wilson, Ph.D., Committee Staff Administrator, Program Review staff,  Lowell Atchley, Judy Fritz, Greg Hager, Alice Hobson, Joseph Hood, Doug Huddleston, Margaret Hurst, Dan Jacovitch, and Susan Spoonamore, Committee Assistant.


Minutes of the January 11, 2001 meeting were approved by voice vote upon motion made by Rep. Graham and seconded by Sen. McGaha.


Joseph Hood, Program Review Staff member, presented a memorandum to the Committee containing conclusions and recommendations based upon staff’s monitoring of the operations and conduct of the Child Support Guidelines Commission. ( a copy of the Memorandum can be found in its entirety in the LRC Library File)


Rep. Arnold asked if the Cabinet compensated the Commission members for any expenses and whether members receive a salary.  He also asked if county attorneys, judges or state officials are on salary when they serve on the commission.


Mr. Hood stated that the members do not receive a salary or any reimbursement for expenses and he did not know if the attorneys, judges or state officials were on salary. There is a Commission on Child Support Enforcement established in the Department of Law that includes the Attorney General, Secretary of the Cabinet for Families and Children, Director of AOC, Director of Division of Child Support and five other members appointed by the Governor, who do receive travel expenses.


Rep. Arnold asked if the Commission called meetings as needed. 


Mr. Hood stated that it appears that the Commission meets as needed and, whenever they meet, they set the next meeting date. Whereas, the statute requires the Commission to have regularly scheduled meetings. 


Sen. Borders asked if it was true that the Commission does not have the power to enact changes based on what they observe.  If the Commission sees a need for a change then they can only make recommendations to the Legislature.


Mr. Hood stated that was correct.


Sen. Seum asked if the Commission has the ability to recommend legislation and if so, has it been done in the past.  He also asked that if the federal government gets involved in the process, does it hinder the ability of the legislature to make adjustments on particular issues?


Mr. Hood responded that the Commission does have the ability to recommend legislation. As a requirement of the federal government, the guidelines are to be based on specific numeric tables with the intent being to identify the appropriate amount needed to raise a child.


Sen. Seum asked if there was anything in the process to help fathers in good-standing.


Mr. Hood stated that there was not.


Rep. Coleman asked if the Commission can reprimand attorneys or judges if the guidelines are not being followed or if they are being manipulated.


Mr. Hood stated that the Commission has the responsibility to make a report to the General Assembly as to whether the guidelines need to be changed and whether the guidelines are being followed.


In summarizing, Mr. Hood stated that based on staff’s review of the Commission, it should be noted that the Commission has a complicated task and has no budget. The Commission needs to have a regular meeting schedule in order to comply with the law, since it requires that the Commission give the public notice of what its regular meeting schedule is.  By  law, the Commission is required to respond to an open records request within three days to either make the information available or specifically state why it can not.  Lastly, the Commission needs to establish regular operational procedures.


Rep. Baugh asked if there were any provisions or procedures to collect child support payments from a person who has moved to another state.


Mr. Hood stated that was not a part of the study. But, there are procedures and provisions to collect from individuals who are out of state. 


Rep. Baugh said it was his understanding that the Kentucky Attorney General is in contact with other Attorneys General in order to collect child support payments.  In reality, does this ever happen?


Mr. Hood responded that it does happen. 


Rep. Baugh asked if there were any provisions to collect child support if the non-custodial parent was being paid wages with cash rather than check?


Mr. Hood stated that this is certainly a problem, but is not an issue for this Commission.


Rep. Graham asked if the child support guidelines table reflected the income and cost of living for people in Kentucky, and is there an adjustment for someone living in California versus someone living in Kentucky. The numeric tables should take into account the lifestyle and cost of living for Kentuckians.


Mr. Hood  stated that child support guidelines are based on that person’s income. There is no adjustment for cost of living, no matter where a person lives.


Rep. Graham stated that any Commission or Board carrying the word Kentucky in front of it should have operation procedures in place and the people should be heard.


In conclusion, Mr. Hood presented the Recommendations to the Committee (a copy of the recommendations can be found in the LRC Library file).


            Ann Swango, of PACE stated that there was previous testimony from Steve Veno who said that there were unlimited resources to subsidize what was needed to comply with CFR 302.56. Now we are hearing comments that the Commission has no money. Recently the Commission contracted with Louise Graham, who is an attorney not an economist, for consulting services and the Commission is hiring court reporters to do full documentation at public hearings. There have not been any discussions at the Commission meetings as to where the funds were coming from with which to pay Louise Graham or the court reporters. Then, all of a sudden Robert Williams with Policy Studies, Inc. appears at a Commission meeting to answer public questions, but the minute a public citizen asks Mr. Williams a question, a Commission member states it is inappropriate. You never know what is going to happen at a Commission meeting because things change between one meeting and the next. The consistency of conforming with any operational guidelines is not there. The Commission is supposed to be uniquely aware of the underlying economic data and how it applies to Kentucky. How can we ask the Commission to give recommendations about economic information to the Legislature when not one member of the Commission could be considered an expert witness in a court of law. In closing, Ms. Swango stated that if you want to have a Commission that is open to the public then you have to have a Commission that is qualified to deal with the issues and that is economic based and tax based.


            Natalie Wilson, Chair, Child Support  Guidelines Commission stated that she does not understand what it is that people are complaining about. She commented on Mr. Hood’s statement that the big picture is that the Commission has a complicated task but does not have a budget, staff or reimbursement for expenses.  She said she never cared about budgets, or staff or expenses. Ten years or so ago, it never occurred to me that this Child Support Guidelines Commission, would be controversial. The Commission would sit down and reason things out together and then the Commission would present the recommendations to the General Assembly who would then have the responsibility of dealing with the recommendations. A lot of what the Commission is getting blamed for is the result of people who call up their legislators and complain or weep over the telephone instead of trying to deal with the issue where it needs to be taken care of, in the courts.  If a person cannot afford to hire a lawyer to represent them in court, then he can go the courthouse and pick up a pro se packet in order to get a hearing before a judge to review the level of child support. The Commission cannot be expected to act on the basis of individual stories about things that need to be done for individual cases. The Commission is here to deal with the statistical figures and issues that are so closely related to the issue of the child support guidelines. The Commission agrees with the need to have a procedure and operations policy.  Ms. Wilson also said that until today, she did not know that the Commission was supposed to have a regular meeting schedule. The Commission has never met on a specific date of each month.


 Ms. Wilson also told the Committee that the Commission hired Robert Williams of Policy Institute to review the guidelines to make sure they are based on current updated figures regarding the cost of raising children in an intact family. The Commission wants to know whether the guidelines take into account the current tax laws of the United States and Kentucky. Twelve years ago, the guidelines were built upon the expenses of raising children in Kentucky. The Commission adopted what is called an income shares method which makes an assumption that both parents have an obligation to contribute to the support of their children. There is no indication at the present time that there will be a change in that underlying philosophy. Both parents have an obligation to contribute to the support of their children. Nobody believes that child support and visitation should be tied together. The Commission deals with the dollar figures on that chart and those figures are based upon good statistical economic analysis.  Ms. Wilson stated that even though she was not an economist, she could see how those things work. The Commission is in the process of revising the guideline schedule which should be ready to present to the General Assembly by September or October. The Commission is  not going to pass the laws, and we hope that the work we are doing will help the General Assembly to know what laws to pass. 


            Tom Mercer, Assistant General Counsel, Cabinet for Families and Children told the Committee that, in addition to being an Assistant General Counsel, he is also the designee for the Cabinet Secretary, Viola P. Miller, as a member of the Commission. By statute, the only connection that the Cabinet for Families and Children has with the Commission is the fact that the Secretary of the Cabinet for Families and Children  or her designee is to be made a member of the Commission. The Cabinet does provide some funding and staff support in as much as the Commission does not have any. It is a responsibility of this State to have such a review procedure and the Commission fulfills that responsibility.  The Cabinet for Families and Children has the job of making sure the guidelines are in compliance with state and federal law with respect to child support. The Cabinet’s sole interest in the Commission and the work of the Commission is that the child support guideline obligations which are established  result in an amount that is fair and equitable to children and the parties involved.  The complaints heard here today are complaints that are generally heard throughout the nation about child support, but these issues are not resolvable by your Child Support Commission and as it is not their task.


            Sen. Borders stated that there was no one on this Committee who implied that children should not be supported.  That is why we are all here and why we are taking this issue to heart. Yes, constituents do call me upset about their situation and I assume that there are others out there with the same problem. He also stated that he would expect the Commission to hear from these individuals. Maybe the legislature needs to give the Commission a budget, but he suggested that the legislature give it to another Commission. Apparently the legislature has empowered this Commission to do something it is not capable of doing.  I don’t think you understand where we are coming from and that is not meant to be personal. As legislators, we represent 100,000 people in rural Kentucky and we hear from these people on a daily basis. We need to step to the forefront and look at the existing laws on the books and make it very very clear what the intent of the law is. If we need to change some laws or if we need to give another Commission a budget to carry out the process then we need to do that because the legislature has empowered this Commission to do something that you are not capable of doing.


            Natalie Wilson responded that the business of the General Assembly is to hear testimony from a lot of people and to understand what their problems are. The Commission has nothing to do with custody determinations or the law as to who should get custody. The Commission is charged with bringing recommendations to the General Assembly at least every 4 years.


            Sen. Borders asked how the Commission can make recommendations if they do not encourage people to come before them with their problems or concerns.


            Ms. Wilson stated that they do encourage people to come forward and talk about the issue that the Commission is supposed to deal with.  The Commission deals with one simple issue and the issue is whether or not the dollar figures on the child support guidelines table that appears in KRS Section 403.212 and 211 are based upon the correct of information. I agree with you that we need a lot of things done with our domestic relations law and family law, but it is not the Commission’s responsibility to do that.


            Rep. Coleman stated that he agrees that the Commission needs to deal with the numbers, but the numbers have to be based on a very explainable, fair, equitable position. We need a family court system in Kentucky. Also, I do not know if the Commission has the authority, but you should have the authority to listen to these people because they are coming to us and obviously we are not being able to meet their needs. The Commission should also be able to have the oversight to see that things are being judicially implemented. This is a very emotional issue and it is not getting better and in fact it is probably getting worse.


             Ms. Wilson stated that the Commission does not deal with enforcement. The Commission is supposed to come up with the numbers and see that those numbers are built upon fairness and fact. Through a survey of the commissioners and judges, the Commission needs to know whether the numbers are being used properly or if there are substantial deviations and if there are substantial deviations, then we want to make recommendations for changes.       


            She also stated that she was sure that there are groups studying the issues of marital law and family law. She could not imagine a court ever upholding a recommendation that would come out of the Commission  pertaining to custody.


            Sen. Seum stated that maybe child support should be based on the 40-hour workweek.


            Ms. Wilson explained the McGinnis rule. It is Judge McGinnis’ position that

if a man is working a 50 hour week, then the child support established at the time of the divorce should be based upon what he was earning prior to the divorce on the assumption that his children were being supported at that level. If, however, his child support was based on a 40 hour a week job and then he remarries again and has another child and another family, then the first wife would not be entitled to an increase based upon his second job for the children of the second family, because, says Judge McGinnis, he went out and got that second job in order to support his second family.  There are other judges who say that if the man had stay married and supported the woman and children from a salary of two jobs, then these children would have an increase in their standard of living. Therefore the children should be entitled to a standard of living increase since he now has two jobs. That is not something that the Child Support Commission Guidelines deals with.


            Sen. McGaha stated that it is critical that the Commission be open to receive testimony from the public, even if the Commission thinks it may not be something that they are responsible for.  He asked, does the Commission have adequate resources in which to operate?


            Ms. Wilson responded that she did not think the Commission had any resources other than to call  Joyce Metz and tell her that the Commission needs to have a meeting so she can fix the agenda and send out the notices. Since the Commission does not start the meeting until 6:00 o’clock at night we do not want the meeting to go on until midnight and we do not want to have 25 people who want to tell their personal story on that particular night. We can set aside a meeting for another time when we can listen to personal stories. So many people come before the Commission with an issue other  than child support. What they want the Commission to do is take care of a particular problem where perhaps a judge in their district  made a bad decision or perhaps they were not properly represented.


            Sen. McGaha stated that he disagreed. It is important for the Commission to know that there are judges out there who do not respect what you are doing. It is also important that the Commission know what is being perceived,  and what actions are being taken  and what variables are being taken from these charts.


            Ms. Wilson stated that the Commission, on a regular basis, tries to find out from the courts and the court records if the judges are abiding by these particular guidelines.


Sen. McGaha pointed out, that when the Commission goes by the court records it shuts the people out. That is the whole point. You are shutting the testimony out. 


            Ms. Wilson stated that the Commission should not dedicate a portion of every meeting to hearing that kind of discussion.


            Sen. McGaha asked if Ms. Graham had been hired as a consultant and if the Cabinet had agreed to pay for the service.


            Ms. Wilson responded that she had.


            Ms. Graham stated that Steve Veno called her and told her that the Commission wanted to hire her as a consultant. He told me that they pay their contract attorneys $45.00 a hour and they would put a cap of $5,000 on it.  She agreed to do the work.  He sent her a contract, she signed it and sent it back and has not heard another word. 


            Sen. McGaha asked if Ms. Graham thought the Commission needed a budget.


            Ms. Wilson stated that all the people who are on the Commission are people who have an interest in this area of law. The people who are going to be appointed under the change in HB123, need to be paid and have their expenses paid because they are not people who would normally would be expected to give their time and service to this Commission.


            Sen. McGaha explained that was not what he was talking about. I am talking about hiring an economist.  I think Ms. Swango is right on target. You need some economist to come in here and talk to you and you need to listen with all three ears. I am not talking about travel expenses, I am asking if you need any money in order to get additional information to you?


            Ms. Wilson stated that to do the kinds of things that the Commission is doing this year takes a lot of time and energy and I think we would be helped greatly if we had somebody who felt that they were responsible for helping to guide us.  That is why I asked Steve Veno to give us Louise Graham for some extra time this fall.  Getting this new study ready and to the General Assembly is going to require a lot of time and I thought that would be the most efficient way for the Commission to do it.  Yes, obviously it would be nice to have a line item budget and to know that there was a particular secretary somewhere who was doing nothing but our work or a particular consultant who could be called and be asked to come in and explain what the meaning of the PSI study is versus what the meaning of Mark Lane study is and to pull together figures so we could have columns that would say exactly what each proposed guideline schedule would come up with. 


            Mr. Mercer stated that he thought Ms. Wilson’s answer was a yes.


            Sen. McGaha said, “Beats me.” 


            Sen. McGaha asked if the chart was based on national figures or based solely on Kentucky figures.


            Ms. Wilson stated the chart was put together by Kentuckians working off of other studies that had been done in other parts of the country, but that the chart grew out of a study that was done by Kentucky members of the Commission. If this group or the General Assembly wants to give the Commission the money to hire more consultants or do a new study maybe then perhaps that is a place where money can be specifically applied. 


            Sen. McGaha stated that the Commission needs a line item for an economist. 


            Ms. Wilson stated that the chart is not being used, per se in all other states of the United States. That chart is not the guidelines support schedule for California or New York, it is for Kentucky.


            Sen. McGaha asked if the figures were the same or different. It could say Kentucky at the top and be Kentucky’s, but are the figures the same?


            Ms. Wilson stated that they are not.


            Mr. Hood stated that his previous comment was directed to the fact that the underlying data was from the United States Agriculture Department. They used national underlying data for their numbers. This is not California’s schedule, but this is national economic data on costs. 


            Sen. McGaha asked if there was Kentucky specific data on which to base a chart.


            Mr. Hood stated that he thought there was. 


            Sen. Stine asked if the information on the chart was Kentucky specific or national data.


            Mr. Hood said that, to his knowledge, it was national data.


            Sen. Stine asked the Committee to look at page 11 and specifically section 6 where it talks about an open forum. There is an actual need for some open forum and perhaps some of this economic information could be presented to the Commission free of charge, so individuals would be able to come and share their information. Also, where it states that procedures should include predictability – I ask the Committee to consider recommending that the Commission provide a regular forum,  allowing involvement of the members of the audience and then continue the involvement of the members of the audience in the Commission meetings.


            Sen. Stine also asked that the members of the Program Review and Investigations Committee look at the recommendations and make their own determinations as to whether or not they feel there should be amendments. If so, contact Ginny Wilson, and share those thoughts with her so at the May meeting the Committee will be prepared to adopt or reject or amend the recommendations. 


            Rep. Coleman asked Ms. Graham what the details of her contract were.


            Ms. Graham stated that she is to review the Williams’ report and she is presently reviewing a report that was put out for the State of Georgia by Mark Rogers and is reading a second report written by Laura Morgan and Mark Leno who do use underlying data from the U.S. Department of Agriculture. It was her opinion that the Commission needs to look at the impact of using everybody’s different numbers. She is working on a report, which involves taking the numbers and calculating the child support using different methodologies.  She is also looking at different levels of income and at different ways that people could compute the child support. Then, she is going to create for the Commission, a list of issues. For example, the Commission  will probably want to go back and look at the issue of whether or not child support should be based on a net after tax-basis or a before-tax basis. Nationally people do it both ways and they tend to use a higher percentage of net after-tax income on a lower percentage of gross income. But if, in fact, child support is based on net income, and if that creates a difference in the Commonwealth so that people feel more comfortable, then there may be something to be gained by using net income. If that route is chosen, then recommendations will have to be considered on how you get from gross income to net income. I am simply trying to help the Commission to  ask the questions so they go through the steps to consider how different systems would analyze child support and then they can vote upon making the recommendations.  I do not have a vote; I am not a Commission member.


            Rep. Coleman asked Ms. Graham what her background is.


            Ms. Graham stated that she graduated from the University of Texas at Austin and has an undergraduate degree in Latin American studies with a minor in economics. She  has a law degree from the University of Texas and has taught at the University of Kentucky for too long to contemplate.  She teaches UCC, Uniform Commercial Code.


            Rep. Coleman stated that something is needed that is fair and simple so that it could be understood and explained to people when they call.


            Ms. Graham said she knows that custody is an issue, but the Commission’s charge does not empower it to investigate custody, although the Commission certainly listens to people, as far as I can tell, about their custody problems. The second thing is that it would be an unusual situation, although you as the legislature would be the ones to adopt the rules.  The Commission is only going to recommend and you are going to adopt.


            Upon voice vote, motion made by Sen. Worley and seconded by Sen. Harris to discuss the Recommendations at the next meeting was approved.


            Sen. Stine asked that Committee members look over the list of study topics that were in the folder, including a background summary on the Review of the Impact Plus Program to consider for an additional study. 


            Dr. Ginny Wilson updated the Committee on the ongoing studies.  Dr. Wilson told the Committee that the Impact Plus Program would be a more focused effort because it would be taking in one program within a Cabinet. It would be a much more doable project in a limited time frame. 


            Sen. Stine asked Dr. Wilson to estimate how many man-hours it would take to review the Impact Plus Program.


            Dr. Wilson said that two staff could be allocated to this review and a report given to the Committee at the November meeting. 


            Rep. Graham stated the program has been up and running for 3 years and when it was first approved it was supposed to be cost neutral and expenditures for Impact Plus were expected to be offset by reductions in the expensive placements of children in psychiatric hospitals. However, reductions have since been outpaced by the growth of spending for the program.  A review of this program could be something that will be very helpful to us as legislators.


            Upon roll call vote, motion made by Rep. Graham and seconded by Sen. Seum to conduct a review of the Impact Plus Program passed unanimously.


            A motion was made by Sen. McGaha and seconded by Sen. Worley to conduct a study of Prevailing Wage.


            Sen. Stine asked Dr. Wilson how long it would take staff to complete a study of Prevailing Wage.   


            Dr. Wilson stated that it would be a complex issue. This issue has been looked at before in the Economist’s Office and it was determined that reliable data is very sparse. She said that staff may not be able to come up with a definitive estimation of the particular costs of prevailing wage on constructions costs because the data has not been collected that would allow staff to make a definitive estimate. However, staff can go back and revisit the data and continue to update the estimate, but it is likely to be a fairly broad estimate. 


            Sen. Stine asked that the motion be amended to include that impact information be obtained from school superintendents regarding the effect and whether or not there really is an increase; and to also include whether or not the wage that is calculated is actually the prevailing wage in that area with specific attention paid to border areas. 


            Sen. Worley asked that the motion also be amended to include impact information from large and small reputable contractors as to their bids on public projects prior to prevailing wage and after prevailing wage.


            Sen. McGaha asked that the motion also be amended to include local governments.


            Motion made by Sen. McGaha and seconded by Sen. Worley to conduct a study of Prevailing Wage was amended to include: (1) impact information from School Superintendents regarding the effect of prevailing wage and whether or not the wage that is calculated is actually the prevailing wage in an area with specific attention paid to borders areas; (2) study to include impact information from large and small reputable contractors as to their bids on public projects prior to prevailing wage and after prevailing wage; and (3) that the study include input from local governments. Upon roll call vote, motion as amended  passed with 12 members voting yes and 2 members voting no.


            Upon voice vote, motion made by Sen. Seum and seconded by Sen. McGaha to conduct a meeting with the Crime Victims’ Compensation Fund at the next meeting passed.


Meeting adjourned.