Wednesday, February 24, 1999

The Honorable E. Clay Shaw (R-FL-22^nd)
2408 Rayburn House Office Building
Washington, DC 20515

Dear Mr. Shaw,

Accompanying this letter are two exhibits (1 and 2) concerning the experience of the State of Florida with child support collection. Exhibit 1 is Kathleen Parker’s commentary that appeared in the Orlando Sentinel on January 24, 1999. Exhibit 2 is a response to this commentary by Donna O’Neal whose title is Taxpayer Education Director for the Florida Department of Revenue (ONEALD@dor.state.fl.us).

Parker’s basic point is that Florida’s collection effort is largely a total waste of money. In their test , two very large firms, Maximus, and Lockheed-Martin, were contracted to perform two tasks: 1) to investigate a number of cases and close those that were uncollectible, for whatever reason; and, 2) to collect whatever they could. According to the Parker article, the specifics of which are agreed to by O’Neal, Lockheed was assigned 101,325 cases and closed 37,270, for which the company was paid roughly $2.2 million. For its efforts during 14 months, it managed to collect $137,839 in child-support payments. Maximus closed 46,692 of 89,560 cases and was paid $2.25 million. It got 12 individuals to cough up a total of $5,867.

According to O’Neal, the companies were hired for two different and unconnected tasks.

The first was to try to collect child support from a backlog of cases. Through the end of November 1998, the companies collected a total of $162,285 for which they were paid $38,948 – or approximately $1 paid for every $4.17 collected. Their payments came from state and federal budget dollars, not actual child support collections.

The second task involved having the companies go through the state’s computer database of child support cases to identify and close invalid cases – cases that would never produce a collection. These included duplicate cases, those in which the client no longer sought our services, cases in which the child had reached adulthood and other similar uncollectable accounts. For this task, which follows strict federal case closure standards, the companies were paid approximately $50 per case – the national average for this type of work – for a total payment of approximately $4.5 million. (Exhibit 2)

Basically, O’Neal argues that the whole experiment was a grand success. The companies collected $4.17 for every $1.00 spent and for only $4.5 million, they closed almost 84,000 cases out of nearly 191,000 total. This, according to O’Neal, is good because these cases would never have yielded any collections, and therefore, the State of Florida saved money in the long run.

O’Neal’s portrayal of this scenario is fallacious and completely disingenuous. There are two main problems with her analysis. First, the two functions: closing cases and collecting from backlogged cases, cannot be separated. In order to get to the cases that yield a collection, you’ve got to get through all the cases that never will. In other words, the entire process must be considered in the aggregate. This means that the costs of the operation must be viewed in aggregate as well. Basically, Parker is correct in her criticism. Florida spent $4.5 million to collect about $162,000.

Second, Florida’s experiment proved what ANCPR and many others have alleged all along. The $34 to $50 billion of uncollected child support that is supposedly out there, doesn’t really exist. Those large estimates of uncollected child support are aggregate numbers. They are the result of totaling all the outstanding, uncollected cases in all states. It is reasonable to assume that most states have a similar proportion of bad or uncollectible cases in their files as were found to be bad in Florida. In other words, 44% of those cases should be closed. This would bring the total owed down to about $15 billion. However, Maximus collected only an average of $489 per case. It is safe to assume that those 12 individuals from whom Florida collected that money owed much more (perhaps many thousands more) than was actually collected. Factoring this in, it would seem that the real amount that is even remotely collectible on a national level, is probably less than $5 billion.

This is really remarkable, since the annual budget for the Office of Child Support Enforcement is nearly equal to the amount that is possible to collect. In other words, if they spent nothing on child support collection, they would collect about what they are collecting now. This is further corroborated by the fact that with all the increase in collection powers that have been added in the last fifteen years, and with all the increase in spending to collect this money, the ratio of dollars spent to dollars collected has remained essentially unchanged.

The child support collection programs in America are failing our children, not because they are failing to collect enough money, but because they are spending billions and accomplishing nothing but driving many thousands of parents into exile. This has the effect of depriving millions of children of a meaningful and ongoing relationship with their non-custodial parent. How much more proof do we need? It is time to re-think our entire approach to Family Law. Children need the involvement of both parents. They need this involvement much more than they need child support.

Driving parents into exile and criminality with sole custody awards coupled with exorbitant child support orders does absolutely nothing beneficial for the children. How does harming a parent help that parent’s child? How does posting parents’ pictures on wanted posters in super markets and on the internet help the children? How does jailing a parent help a child? How does effectively cutting off all contact with the non-custodial parent help a child? How does inflicting an unprecedented assault on every citizen’s privacy and constitutional rights help our nation’s children?

In reality the $4 billion budget for child support collection has other, very troubling consequences and concomitant costs. The emphasis on child support in the debate about child well-being has the effect of providing a formidable financial incentive for divorce and the extremely costly and divisive custody battles that ensue. There is also ample evidence that the actual cost of raising a child is much less than the average child support award. As radical feminist Karen Winner, in her book Divorced From Justice, writes "There is accumulating evidence that men are challenging their wives for custody of the children precisely because it is cheaper to keep them than to pay child support."

It is common knowledge, supported by extensive studies, that parents who are able to maintain a close relationship with their children after divorce willingly support their children. The best way to accomplish this on a nation-wide basis is with a presumption of shared parenting (joint physical and legal custody). We need to concentrate our efforts on this front, and completely de-emphasize child support collection. Doing so would benefit the children much more than devising ever more draconian enforcement procedures that turn otherwise decent and hard-working parents into criminals.

Wishing you all the best,

Lowell Jaks

Executive Director, ANCPR

Cc: Kathleen Parker

Donna O’Neal

Assemblyman Rod Wright (D-Los Angeles, Ca)

Exhibit 1:

Deadbeat dads more myth than reality

By Kathleen Parker (803) 432-6468

Commentary

Published in The Orlando Sentinel, Jan 24 1999

Forget plastics. Forget computers. Tell your kids to become deadbeat-dad bounty hunters and keep those divorces coming.

Today's best business opportunities may well lie in the pursuit of deadbeats -- even if they don't actually exist -- and the collection of child-support payments, which service is financed by, guess who, you, the ever-drowsy taxpayer.

In Florida last year, taxpayers paid $4.5 million for the state to collect $162,000 from deadbeat parents, mostly fathers, and clean up the child-support bureaucracy. The money went to two private companies -- Lockheed Martin IMS, a New Jersey subsidiary of the huge defense concern, and Maximus Inc., a consulting firm in Virginia. Both companies conduct similar services in other states as well.

Typically, as was the case in Florida, the companies are paid $50 for every file they close, plus a commission on money collected.

Lockheed was assigned 101,325 cases and closed 37,270, for which the company was paid roughly $2.2 million. For its efforts during 14 months, it managed to collect $137,839 in child-support payments. Maximus closed 46,692 of 89,560 cases and was paid $2.25 million. It got 12 deadbeats to cough up $5,867.

Broken down, the state of Florida, using state and federal funds, paid about $1 for every $4 collected, according to Donna O'Neal, spokesperson for the Florida Department of Revenue.

How can so much be spent for so little, and why are taxpayers footing the bill?

The answer to the first question is because bureaucracies are inept. Many of the Florida files closed out by Maximus and Lockheed were duplicates or outdated files, i.e. deadbeat dad was dead, children were grown, and so on. O'Neal notes that this mess preceded the Department of Revenue's stewardship of the child-support system.

In addition, most of the custodial parents contacted didn't want or need the state's help to collect payments, said Bob Johnson, vice president of Maximus. Under law, custodial parents on welfare have no choice but to accept state-ordered collection services, while non-welfare recipients have the option of declining the state's help.

The answer to the second question is, you'll have to ask President "Paladin" Clinton, who, despite such questionable spending, has promised to spend $46 million more of your money during the next five years to help investigators and prosecutors track and prosecute deadbeats. The president also has pushed for states to deny deadbeats a driver's license, to withhold wages and -- this is a hoot -- lottery winnings. Those oily shysters -- always winning lotteries and never sharing.

Meanwhile, back on Earth, the dastardly deadbeat dad is, alas, more myth than reality. It's so much easier, after all, to despise a man who abandons his children than it is to find fault with a man who, though he may suffer certain, um, weaknesses, shows up for parent/teacher meetings, if not impeachment hearings.

What Maximus and Lockheed Martin learned in the process of tracking down non-paying parents is that most who don't make child-support payments are, in a word, broke. You can't give what you don't have.

According to the Census Bureau, only 10 percent of non-custodial fathers fall into the "deadbeat dad" category. Fathers with joint custody pay 90.2 percent of all child support ordered. Those with visitation rights pay 79.1 percent of all child support ordered. Forty-four percent of those with no visitation rights support their children financially. Which is to say, the deadbeat-dad problem isn't quite the plague we've been led to believe it is.

Parents who abandon their children are the worst kind of skunks. But spending $4.5 million of taxpayers' money to collect $162,000 of somebody else's plainly stinks.

Kathleen Parker's column is distributed by Tribune Media Services. Her column also appears Wednesday in the Sentinel's Living section. She can be reached at Kparker@Kparker.com on the Internet. Ms. Parker’s phone number is: (803) 432-6468

Exhibit 2

Mr. John Smith

Dear Mr. Smith:

I have been asked to respond to your e-mail of January 30 regarding the syndicated column by Kathleen Parker that appeared in The Orlando Sentinel. Unfortunately, Ms. Parker’s column has resulted in widespread misinformation that would upset any citizen if it were true. However, Ms. Parker’s column was wrong.

Before Ms. Parker wrote her column, she called my office in order to verify statistics that had been reported by the Associated Press on December 28. I informed her that the Associated Press was running a retraction. She chose to ignore that information.

The correct story is that the companies were hired for two different tasks. The first was to try to collect child support from a backlog of cases. Through the end of November 1998, the companies collected a total of $162,285 for which they were paid $38,948 – or approximately $1 paid for every $4.17 collected. Their payments came from state and federal budget dollars, not actual child support collections.

The second task involved having the companies go through the state’s computer database of child support cases to identify and close invalid cases – cases that would never produce a collection. These included duplicate cases, those in which the client no longer sought our services, cases in which the child had reached adulthood and other similar uncollectable accounts. For this task, which follows strict federal case closure standards, the companies were paid approximately $50 per case – the national average for this type of work – for a total payment of approximately $4.5 million.

Deleting these invalid cases from the computer database provides two benefits to Florida taxpayers. First, it enables the Department of Revenue to more accurately monitor our employees’ performance on valid cases, ensuring that we work more efficiently and

effectively. Second, we avoid spending time and taxpayer dollars pursuing fruitless cases that will never produce a penny for Florida’s children.

Unfortunately, the misinformation that has been circulated in the news media leaves the impression that child support collection in Florida is a failure. On the contrary, child support collections have increased by more than 50 % since the program was transferred to the Department of Revenue in July 1994. For the first six months of the 1998-1999 fiscal year, collections have set a record high of $310.1 million.

In the past few years, Congress and the Florida Legislature have given the Child Support Enforcement Program new and expanded enforcement tools for those who refuse to accept their financial responsibility to their children. Our authority to suspend driver licenses has motivated more than 14,000 individuals to start paying child support in order to avoid losing their driving privileges.

Employers now must report hiring information to us so individuals can’t hop from job to job to avoid paying support. The state’s computerized database of criminal arrest warrants now also includes those who are in contempt of court for shirking their child support obligations. This means that a law enforcement officer doing a simple traffic stop anywhere in Florida will now know if the individual is wanted for back-due child support.

Of course, we know that we can always do better at getting more money to more children more quickly. Clearly, our challenge is to boost collections using all the enforcement tools available. This year those efforts will produce about $620 million for Florida’s children.

I hope that I have clarified the facts and provided some insight into the Child Support Enforcement Program.

Sincerely,

Donna O’Neal

Taxpayer Education Director ONEALD@dor.state.fl.us

cc: Larry Fuchs