Arizona Works is a four-year, pilot welfare reform program currently operating in the eastern part of Maricopa County, and soon starting in Mohave County. It has several important features that distinguish it from the state's regular welfare program EMPOWER Redesign, and make it one of the most innovative welfare reform programs in the nation.
- It is one of two welfare reform in the nation (Wisconsin is the other) where the entire administration of welfare services is privatized.
- Privatization allowed the state to set performance goals, and create incentives for the private contractor to meet those goals. Although common in government contracts for roads or garbage collection, performance-based contracting for a social service such as welfare is relatively rare because it is more challenging.
- Arizona Works has tougher work requirements for welfare recipients. The list activities officially considered as work under EMPOWER includes not only what is commonly thought of as work, but also looking for work; training for work; preparing for work; and working toward a high school diploma or general equivalency degree. The list of activities considered work under Arizona Works is limited to work: either in a full-time, subsidized or trial job.
- Under Arizona Works benefits are flat grants, unaffected by family size or income, while under EMPOWER, payment amounts are adjusted for family size, income and the cost of housing. The use of a flat grant was purposefully designed to resemble a wage.
- The Arizona Works legislation mandates a 10 percent saving in administrative costs. The competitive bidding process for the Arizona Works contract led to additional savings. At a bare minimum the private contractor will operate the program for 22 to 34 percent less than DES would have needed.
This report is an examination of Arizona Works after its first year of operation. It looks at the success of the private contractor for Arizona Works, MAXIMUS Inc., in meeting the performance goals laid down in the contract; and the fate of former state workers who went to work for MAXIMUS.