Dip into reserves needed for welfare recipients

Tuesday, Nov. 20, 2001 | 9:52 a.m.

CARSON CITY -- In another sign of the economic doldrums in Nevada, the state reported Monday that the number of welfare recipients has climbed beyond expectations, and emergency funds will be needed to keep the checks flowing to those on public assistance.

According to the state Welfare Division, there were 23,844 people on the Temporary Assistance for Needy Families program in October, an increase of 8.9 percent from the previous month, and 34 percent higher than October 2000.

The release of the welfare numbers followed by several hours the report that October's unemployment rate skyrocketed to 6.3 percent, its highest rate in nearly a decade.

Nevada's economy was softening before the Sept. 11 terrorist attacks, but the attacks accelerated the trend.

The Nevada Legislature had estimated a monthly welfare case load of 17,818 this fiscal year. In the first four months of this fiscal year, the average monthly case load has been 21,830.

Jeanette Hills, deputy administrator of programs and field operations in the welfare division, said welfare officials would approach the Interim Finance Committee Monday to dip into a $31 million reserve fund.

The officials will initially ask for $4.5 million and will probably return next spring to seek more money.

The initial estimate was that the division would be short $10 million over the two-year biennium, but the deficit is going to be higher, she said.

Part of the increased welfare numbers is due to a change ordered by Gov. Kenny Guinn, who said that those who drew unemployment benefits after being laid off following the attacks would not have to count that money to be eligible for welfare payments.

The average payment for a family of three on welfare is $348 a month. But they are also eligible for food stamps and are covered by Medicaid, the medical program for the needy.

The Monday report from the state Department of Employment, Training and Rehabilitation said there were an estimated 64,700 jobless in October, or about 14,000 more than the previous month.

A department spokeswoman said the 6.3 percent figure was the highest since the early 1990s, when the nation and the state experienced another economic downturn.

Sales tax receipts for September are expected to be released this week, giving the state a clearer picture of its finances. The state Gaming Control Board last week reported that tax collections for the first four months of this fiscal year are down 2.1 percent.

The state's budget is based on gaming taxes going up 4.5 percent this year so there is a 6.6 percent shortfall from the budgeted amount in the early part of the fiscal year.