The Governor’s Spending and Government Efficiency (SAGE) Commission issued an overdue presentation to the Governor on December 15, 2011.  Tucked away on page 42, is one proposal the Governor needs to embrace with open arms: taking over the administration and payment of the State Supplement to the federal Supplemental Security Income (SSI) program, which will save about $90 million annually.

In September 2011, over 685,000 New Yorkers who are either aged or disabled received combined federal and state payments of just over $380 million monthly, including a state supplement of $53.3 million (pages 19 and 20).

New York has always contracted out the state supplement payment process to the Social Security Administration, which combines the monthly federal and state payments into one deposit or check. The annual cost of this service is exorbitant — nearing $90 million and rising each year based on inflation. New York and a few other states including California and New Jersey are outliers in still contracting with SSA for what is a reasonably simple payment process.  Forty-four states offer a state supplement (page 7) and the majority of them administer it themselves.

While at OTDA, I was one of many recommending this takeover, but it either fell on deaf ears or died in budget negotiations.  New York’s SSI state supplement is more complicated than those of most states, with multiple categories of payments. But, assuming the responsibility from the feds will still be relatively simple. Upfront one-time costs over 18-24 months for building and maintaining the state payment system will be vastly outweighed by the annual long term savings. Most of the information to operate the supplement in-house will still be fully available from the Social Security Administration.

Some, including legislators, may resist — claiming that the change will confuse recipients because they will receive two deposits monthly instead of one. However the total amount going into their account will still be the same. SSI is currently moving fully from the last vestiges of check writing to direct deposit for all recipients, leaving no rational excuse for not moving forward at a time when the state needs to realize any and all savings to close structural deficits.