Conversion of Dr. Gardner’s handout

OCR conversion of Dr. Gardner provided this handout.

 

September 12, 2011                                          Child Support Review Committee
Child Support Guidelines

I.    Child Support Formulas Across the United States

A.    There are 13 states that use the ‘Percentage of Obligor Income’ model, including Texas, Mississippi, and Arkansas.

  1. The child support amount is determined based on a percentage of noncustodial parent income only. Income can be gross or net. The percentage may be flat or vary according to income. Most of these states assume that the custodial parent spends an equal amount on the child.
  2. Example: Mississippi’s guidelines, shown below,

“..provide the percentage of the noncustodial parent’s adjusted gross income that should be awarded for support based on the number of children due support.”‘

Number of                          Percentage of Adjusted Gross Income
   Children                                             That Should be
Due Support                            Awarded for  Support
One (1)                                                        14%
Two (2)                                                       20%
Three (3)                                                    22%
Four (4)                                                      24%
Five or More (5)                                         26%

B.    There are 33 states that use the Income Shares model.

  1. According to PSI, among those Income Shares states that updated their schedules after 1991, most have updated their schedule using the Betson-Rothbarth estimates, which were not released until late 1990.2
  2. All of the Income Shares states that continue to use the Espenshade-Engel estimates have never updated or last updated their schedule prior to the release of the Betson-Rothbarth estimates, with the exception of Michigan and Rhode Island.

C.    Three states (HI, DE, MT) are based on the Melson formula and 2 states (DC, MA) use a hybrid approach.

II.    Summary of Louisiana’s use of the Income Shares model

A.    The basic principle of the Income Shares model is that it seeks to allocate to the child the proportion of the parental income that would have been spent on the child if the parents were living together.

B.    Basic Methodology:

  1. Use the Consumer Expenditure Survey (CEX) to obtain estimates of child-rearing expenditures as a percentage of total household consumption expenditures.
  2. To the basic child support obligation should be added the costs of child care, extraordinary medical expenses (in excess of $250 per year), and the child’s share of health insurance premiums.
  3. Adjust the national estimates of child-rearing expenditures to reflect Louisiana’s lower income distribution.
  4. Relate a family’s consumption expenditures to net income.
  5. Relate net income to gross income using current withholding tables for a single obligor.
  6. Incorporate a self-support reserve to ensure that the support obligation (other than the monthly minimum) does not reduce the obligor’s net income below a level necessary to maintain a subsistence standard of living.
  7. The foundation of Louisiana’s current child support guidelines are estimates of child-rearing expenditures.
  8. National estimates of child-rearing expenditures are typically developed using the U.S. Bureau of Labor Statistics Consumer Expenditure Survey (CEX).
  9. There are several different methodologies available, and in use, for estimating child-rearing expenditures. The following apply to Louisiana’s current guideline schedule:From the combined adjusted monthly gross income range of $600 to $10,000 the child-rearing estimates are based on a study completed by Dr. Thomas Espenshade in 1984. The estimates are based upon national data from 19724973 and use the Engel estimator.
  10. From the combined adjusted monthly gross income range of $10,000 to $30,000, the economic estimates of child-rearing expenditures are based on a study by Dr. David Betson. These estimates are based upon the Rothbarth estimator using national data from 1998 — 2004.Ill. Economic methodologies for estimating child-rearing expenditures.
  11. The general approach is to compare expenditures between two households that are equally well off economically, one with children and one without. The additional expenditures by the household with children are deemed to be the costs of child-rearing.
    1. The child-rearing expenditures are estimates from samples of two-parent households.
    2. The example described in Louisiana’s “Economic Basis for Updated Child Support Schedule’ written by Performance.Service.Integrity. in 2004 describes two families who are assumed to have two adults and are considered to be equally well off:
    Family A Family B
    Number of Children 0 2
    Total Household Expenditures $18,000 $30,000
    Children’s Additional Cost $12,000
    Children’s Share of Total $12,000 /

    $30,000

    =

    40%

    1. The $12,000 is considered as the marginal cost of the children.
    2. For this approach it is necessary to construct a standard of well-being that is independent of income. Only with such a standard can two families be considered as equally well off, one with children and one without, even though they have different incomes.

    B Rothbarth estimator.

    1. This estimator uses the proportion of family expenditures on luxury goods as a standard of well-being. The Rothbarth approach estimates child expenditures based on the level of household expenditures on adult goods (e.g. adult clothing, alcohol, tobacco).
    2. According to the US DHHS Lewin/ICF Report, the primary basis of the Rothbarth methodology is that it is theoretically most likely to understate child-rearing expenditures. However, this has been contested by more recent studies.
    3. Dr. Betson conducted his first study in 1990 using date from the 1980-86 CEX. Since then he has completed three additional studies:

    a. In 2002 he updated his estimates using CEX data from 1996 — 1998.

    b.ln 2006 Oregon commissioned a study in which Dr. Betson updated his estimates using 1998 — 2003 CEX data.

    c. NEW: In 2010 California commissioned Dr. Betson to update his estimates using CEX data from 2004 through 2009.

    C.Engel estimator.

    1. Under this standard, total expenditures devoted to food are deemed to be a valid indicator of economic well-being. The Engel approach estimates child expenditures based on total household expenditures on food.
    2. Thus, if two families of different size spend the same proportions of their incomes on food, they are deemed to be equally well off.
    3. According to the US DHHS Lewin/ICF Report, the primary basis of the Engel methodology is that it is theoretically most likely to overstate child-rearing expenditures.

    D. Wisconsin

    1. The third most frequently used economic estimate is based on Wisconsin’s interpretation of a 1981 summary article of child-rearing costs.
    2. Wisconsin uses a flat percentage of gross income to determine child support. The amount of the obligee’s income has no effect on the child support order amount.

    E. USDA estimates

    1. The USDA’s Center for Nutrition Policy and Promotion (CNPP) develops economic estimates for the major categories of child-rearing expenditures.
    2. No states uses the CNPP estimates as the basis of its child support schedule. The CNPP only considers three income ranges (low-income, middle-income, and high-income).

    IV. Converting net income to gross income

    A. The following assumptions are made to simplify the conversion process:

    1. All income is treated as earned income subject to taxes;
    2. All income is assumed to be earned by a noncustodial parent with no dependents; and
    3. Only adjustments for federal and state taxes and FICA are considered.
    1. For federal taxes, two federal withholdings are assumed (the employed withholding guide for federal taxes does not separate standard deductions from exemptions, each is considered one withholding).
    2. For state taxes, the one personal exemption is assumed.
    3. “In modeling differential tax impacts associated with different family situations including the new child tax credit, we have found that adjustments to account for the actual tax impacts generally serve to increase the total net income available for support, increase the total support obligation, and, except in unusual circumstances (e.g. all income is earned by the custodial parent), increase the noncustodial parent’s share of that obligation” (PSI 2004).

    B. Net income is computed independently using CEX data on gross income and on itemized deductions for

    1. Federal, states, and local taxes, including personal property taxes;
    2. Social security (FICA) taxes; and
    3. Union dues, which are considered to be mandatory expenses. Thus,

    Net Income = Gross Income — taxes — FICA — union dues

    1. To relate expenditures on children to net income, where EC = expenditures on children, C = total consumption expenditures, and NI = net income:

    EC/C X C/NI =EC/NI

     


Notes from the September 12 meeting of the 2011 Guideline Child Support Review

Meeting:

Date:           September 12, 2011
Location:    Iberville Building Room at North and Fourth in Baton Rouge
Room:         1-129
Start time:  1:15 p.m.
End time:   About 3:30 p.m.

Agenda:

  1. Survey Monkey Results
  2. Dr. Gardner:  Possible Methods for Revising Schedule
  3. Professor Spaht:  Dual Paternity
  4. Vincent Saffiotti:  Private School Tution and Daycare expenses
  5. Other Business

Attendees:

  1. Paul S. Fiasconaro designeee for K. Jacob Ruppert President of La H.O. Association
  2. Professor Spaht, ? Who is she representing
  3. Jessica Braun, designee for House Committee on Civil Law and Procedure.
  4. Tiffany Simpson, La Children’s Cabinet
  5. Gary E. Franklin, DCFS CSE;
  6. Melissa Moreau, LDAA
  7. Lisa Andry, DCFS/CSE Executive Program
  8. Lara Gardner, Economist from Southeastern Louisiana State University.
  9. Jennifer DeBlanc, Designee for the Louisiana Senate, Senator Julie Quinn’s office.

Absent, attended by phone:

  1. Judge Lisa Woodruff-White designee for the La District Judges Association

Absent:

  1. Bennett Wolfe, La Ch of American Academy of Matrimonial Lawyers
  2. Vincent Saffiotti, designee for the Louisiana State Bar Assocation’s Family Law Section
  3. Judge Pamela Baker, designee for the Juvenile and Family Court Judges
  4. Randy Trahan, designee for the La State Law Institute Marriage and Persons Advisory Committee.

It is a very hostile committee.

Public in attendance:

  1. Gregory Rattler Jr.   Mahalia Jackson Community Center
  2. Tanya James,  Mahalia Jackson Community Center
  3. Nicholas James, LaDads
  4. Glenn Hoover, Daniel Hoover’s father
  5. Angelo, LaDad member
  6. another dad,  LaDad member

I gave a handout of the initial divorce petition in the Hoover case at the begining of the meeting.

We were not allowed to speak until the end of the meeting.  The very end of the meeting when everyone was already packed up and ready to go. By this time, all of the public was gone except for Mr. Hoover and Me.

Handouts:

Agenda.

Dr. Gardner provided this handout.

Professor Spaht provided these two handouts.

Allocation of Child Support between Legal and Biological father

At the end of the meeting, Mr. Hoover  got up and spoke briefly.  He handed out  copies of his son’s final divorce judgment that awarded 100% of his sons income as child support.

I was then allowed to speak briefly.  I stated that we needed to revise the child support codes to prevent what had happened to Daniel Hoover from ever happening again.

Letter to Dr. Gardner

Dr. L. K. Gardner
Management and Business Administration
Lara.Gardner@selu.edu
(985) 549 3068

2011 Louisiana Child Support Guidelines Review

Dear Dr. Gardner,

It was a pleasure meeting you at the September 12 child support guideline review meeting.

LaDads has scanned all of the states child support reports since 2000 and made them available on the internet.  These files are downloadable from the following links, see below.  The files are semi-searchable by keyword.

2008 Report by DSS

This was the last report done.
2008 Review of Child Support Guidelines by DSS/DA

2004 Report by DSS Lisa Woodruff-White (now Family Court Judge)

The first two pages are the summary recommendations for 2004.
The Report to the legislature goes from pages 3 to 317
The Survey findings for that years start on page 268
The Low-Income Fathers and Child Support in Louisiana – Best Practices and Recommendations report by PSI starts on page 318 to page 443.  Many of these recommendations were not implemented; some were not even presented to the legislature.

2004 Child Support Review

 

2001 Task Report by Professor Spaht.

The legislature commissioned a Task Force headed by Professor Spaht to review the 2000 report.

2001 Report of the Task Force

2000 Report – split into two files

This was the first report done by Judge Lisa Woodruff-White.
In it it has the methodology of the economists hired by the state – PSI (Jane Venohr) that set the original child support tables and have done all of the updates since then (except this last update).
2000 Review of Child Support Guidelines A

Exhibits attached to the report are in the B file.  Exhibit 1 is the economists report from Jane Venohr, PhD for PSI, to the review team. It describes in detail the methodology used to create the child support tables.  Attached.
2000 Review of Child Support Guidelines B

Sincerely yours,

Nicholas James
president@ladads.org
(email and phone number redacted)

August 8 2011 meeting minutes from 2011 Child Support Guideline Review Committee

Okay folks, here are the minutes from the August 8, 2011 Child Support Guidelines Review.

You have both the original pdf that was scanned from the meeting and an OCR scan that I did with some reformatting for clarity.


OCR scan of the pdf of the meeting minutes

2011 CHILD SUPPORT GUIDELINES REVIEW
MEETING MINUTES
August 8, 2011
Iberville Building, Room 1-129 Baton Rouge, LA

Attendees:

  1. Gary E. Franklin, DCFS CSE;
  2. Paul S. Fiasconaro designee for K. Jacob Ruppert, President of LA H.O. Association;
  3. Vincent Saffiotti, designee for the Louisiana State Bar Association’s Family Law Section;
  4. Bennett Wolfe, LA Ch. of American Academy of Matrimonial lawyers;
  5. Melissa Moreau, LDAA;
  6. Jennifer DeBlanc, designee for the Louisiana Senate, Senator Julie Quinn’s office;
  7. Randy Trahan, designee for LA State Law Institute’s Marriage and Persons Advisory Committee;
  8. Judge Lisa Woodruff-White, designee for the LA Dist. Court Judges Assoc.;
  9. Judge Pamela Baker, designee for Juvenile and Family Ct Judges; Tiffany Simpson, LA Children’s Cabinet;
  10. Lisa Andry, DCFS/CSE Executive Program Director

Non-Attendees:

  1. Jessica Braun, designee for House Committee on Civil Law and Procedure

The public meeting was called to order by Gary Franklin.

Lisa Andry introduced Laura Gardner (sic  correct name is Lara Gardner), Economist from Southeastern Louisiana State University. She is under contract to do the economic study for the Child Support guidelines. Committee members introduced themselves to her.

To update the CSGuidelines, child rearing expenditures will need to be determined as they relate to net income and gross income and how child support payments are determined.

Gary will get a copy of the final report from 4 years ago.

Bennett Wolfe asked if the guidelines would be expanded?

Mr. Franklin let Ms. Gardner know of the assigned research projects.

Ms. Gardner asked if the $100 minimum support should be kept.

Judge Lisa Woodruff White is studying the minimum Child Support amount.

Mr. Wolfe said the schedule needs uniformity to reduce conflict.

Vincent Saffiotti stated that the needs of the child should be considered.

Paul Fiasconaro said four years ago dollar amounts per child combined for gross income of family were increased. $100 minimum remained the same.

There are deductions for standard withholding using gross income.

Child support schedule shows combined income.

Judge Woodruff-White explained the schedule from zero to $10,000 was based on the old. Later the schedule from 10,000 to 20,000 was added. There was concern with the legislature updating the schedule. Even though the economic data supports it, the parents at the lower end of the scale would end up having decreases in child support. There is a problem when there are multiple children and multiple family cases. We have two sets of data. Judge Woodruff White said we need an updated schedule. There is a difference in child rearing expenses and child care expenses. There is a little problem between the $7,500 and $10,000 amounts. We need the most current economic data. The custodial parent is in a better position if a realistic obligation is paid rather than if an unrealistic obligation is not paid.

Two guests from Mahalia Jackson Community Center, Gregory Rattler Jr. and Tanya James, were invited by Judge Woodruff White to attend the meeting. She gave them surveys to fill out.

Ms. Gardner asked if there were other issues.

In the current schedule, $250 is included for extraordinary expenses.

Mr. Franklin brought up self employment income.

Extracurricular expenses need to be studied.

Judge Woodruff-White said under the current schedule there is a 15% dissolution factor. Do we use that throughout the schedule? There is lots of research out there on how to deal with low income parents. There is a self support reserve for low income parents. We define what percent of the self support reserve is used because if we used 100% to factor it, that would have resulted in more decreases. Data will show that it is important to use a self support reserve for low income parents. If we are going to do it, do it where it is applicable to the schedule.

We decided to include a work incentive. That is so it encourages parents to work.

Judge Woodruff-White spoke in regard of the lower end of the schedule where there is a $100 minimum in the state of Louisiana. The last time she looked, there were very few states that had a$100 minimum and they were not low income states. We used to have a schedule that started at $600. It is now $900. Judge Woodruff White would like it if the table would start at $600 again. Then make decisions where to go from there. It is fictitiously there because we had to bump it up.

What is the scope of Dr. Gardner’s contract? Analysis and determining child rearing expenses

One is economic or one is legal. Ms. Andry said Melissa and Gary, as attorneys, can take a lead on the legal part of the final report. If that is not sufficient we can find someone to help.

Mr. Franklin is to follow up with Jessica Braun on availability of Kerry Triche.

In regard to Survey Monkey, Bob Levy was not able to print out the survey.

The committee voted to extend the survey to the end of August. (Aug. 31)

Mr. Franklin turned over the floor to Paul Fiasconaro. He found a document from 2009 on Act 378. It is used by the 24th Judicial District Court in an effort to come up with income from the self- employed. It states that suitable documentation of current earnings shall include employer statements.

Judge Pam Baker said it would be great if it’s someone who keeps good business records but not all do. Some NCPs that get paid in cash want to be set as earning minimum wage. What can be done? Issue a subpoena? It won’t show on their tax return. They need verifiable income.

During discovery, Mr. Wolfe gets documentation such as federal tax returns and paycheck stubs to establish parent’s incomes.

Judge Woodruff White asked if anyone knows what other states are doing? It may address this issue in the majority of the cases. Last time information was gathered from other states.

Judge Baker says a big problem for her, are the people who have no documents or bank accounts and pay their utility bill in cash so we can’t trace anything.

Tiffany Simpson suggested looking at a person’s mortgage or loan application which would show their income.

Judge Baker asked what documents are necessary? If there is a question on a parent agreeing to the income amount, they would fill out an income expense affidavit. But if both parents agree, they wouldn’t need to fill it out.

Judge Woodruff White said she could get with the Work Force Commission to gather information.

Mr. Franklin said Professor Katherine Spaht will give her report on Paternity next meeting.

Ms. Andry said the committee needs a report on the survey by the September meeting so we can get the final report ready since the Legislative session starts early next year. A subgroup may need to gather shortly after the 31st to get a synopsis of what was found by the survey.

The next meeting will be held on Sept. 12.

The meeting was adjourned.

FUTURE MEETINGS:
October 10, 2011         -    1:15 pm

November 14, 2011    –     1:15 pm