This report summarizes a three-year study of the implementation, impacts, and costs of the Arizona Works Pilot Program, a program that privatized Arizona’s Transitional Assistance for Needy Families (TANF) program. Beginning on April 1, 1999, the TANF program in most of Eastern Maricopa County was administered by MAXIMUS, Inc., a private company. During these three years, MAXIMUS, Inc. was responsible for operating the TANF program and its welfare-to-work program, child care for TANF families, Transitional Child Care, the state-funded General Assistance program, and the Food Stamp Employment and Training program. The goal of the impact study is to compare the performance of Arizona Works and the performance of EMPOWER Redesign, the publicly administered TANF program in the comparison area, which is the rest of Maricopa County. The study also examines a version of Arizona Works in Greenlee County, although this program lasted only a few months.
During the period from April 1, 1999 through March 31, 2002, Arizona Works and EMPOWER Redesign also differed because only Arizona Works received performance incentive payments and because the two programs had some different rules regarding time limits, the size of the monthly TANF grant, the treatment of earned income in the determination of grant levels, and other issues. The impact study considers the possible effects of privatization, the performance incentives, and differences in the program rules, and also attempts to take into account the pre-existing differences in the characteristics of the caseloads and neighborhoods served by the two programs.
In June 2002, the state’s plan for the privatization of TANF services changed dramatically with the passage of Senate Bill 1037. Under this legislation, responsibility for determining TANF eligibility and benefits was restored to the Arizona Department of Economic Security (DES) on October 1, 2002. The Arizona Works contractor continued to retain responsibility for case management and employment services. The legislation also removed program rules specific to Arizona Works and applied the EMPOWER program rules to the Arizona Works Pilot area, as of October 1, 2002.
This report covers only the period from April 1999 through March 2002, when Arizona Works applied some unique program rules and was responsible for TANF eligibility determination. Because of extensive changes to the program, some of the findings of this study are unlikely to persist in the future. This evaluation nevertheless provides some insights about the possible effects of privatized TANF services with performance measures. (author introduction)