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State of Play: Pay for Success and Evidence-Based Policy, December 2018

Jessica Crawford
Director, Coalition Engagement and Communications
America Forward

Lee Foley
America Forward Policy Adviser
Capitol Hill Partners

Pay for Success and evidence-based programs, projects, and policies have been designed to address a large range of issues, including early childhood education, workforce development, homelessness, recidivism, and child welfare.

The following brief includes federal, state, and local updates on significant policy and practice-related efforts that are of interest to the Pay for Success and evidence-based community.

If you have additional information or resources you would like to see included in future Pay for Success or other America Forward issue briefs, please email the America Forward team at America_Forward@newprofit.org.

Federal Pay for Success and Evidence-Based Updates

America Forward and its Pay for Success and evidence-based Task Force and our broader Pay for Success and evidence-based network continue to engage with Congress to advocate for the inclusion of evidence and outcomes in federal legislation. We also continue our work with the Administration and its agencies tasked with executing on enacted Pay for Success and outcomes legislation to ensure our priorities are effectively implemented. Below are the latest federal Pay for Success and evidence-based updates.

Administration Updates

Social Impact Partnerships to Pay for Results Act (SIPPRA):The Bipartisan Budget Act of 2018, enacted earlier this year, included SIPPRA, a comprehensive Pay for Success bill which directs federal resources to states and local communities to support innovative Pay for Success arrangements. SIPPRA implementation efforts are currently underway, including conversations with staff at OMB and Treasury, as well as naming members of the Commission on Social Impact Partnerships, which was established to advise the Department of Treasury on SIPPRA. All indications are that the U.S. Department of Treasury is on track to issue a SIPPRA grant notice in February 2019. Please stay tuned!

Maternal, Infant, and Early Childhood Home Visiting Program (MIECHV): Language to reauthorize the MIECHV program for five years, including the Pay for Outcomes provision, was included in Section 50601of the Bipartisan Budget Act of 2018. A MIECHV Formula Grant opportunity was announced by HRSA earlier this year and a list of those awarded may be found here.

Family First Prevention Services Act:Also included in the Bipartisan Budget Act of 2018was the Family First Prevention Services Act. This legislation provides sweeping reforms to Federal funding and support for child welfare services with a particular emphasis on defining and redirecting funds to evidence-based interventions. Stay tuned for additional updates as we head into the new Congress.

Re-employment Services and Eligibility Assessment (REA) Program:REA is an initiative of the U.S. Department of Labor focused on accelerating unemployment insurance claimants’ return to work and the training and other strategies used are encouraged to be evidence based. The Bipartisan Budget Act of 2018 codified REA and outlined a funding mechanism to fully fund the program over 10 years. The bill authorizes first year funding of $117 million in FY18 and then bakes in mandatory side auto increases over ten years topping out at $750 million. By the middle year of the authorization, states will be required to have at least 25 percent of their expenditures be on evidence-based strategies and by the end of the authorization that requirement will have risen to 50 percent.  The Secretary is authorized to award outcomes-based payments to successful state strategies.

Every Student Succeeds Act

When the Every Student Succeeds Act (ESSA) was enacted in 2015, the America Forward Coalition worked closely with Congress to shape key elements of the bill, including the development of language and advocacy around the addition of Pay for Success language and authority.  As the drumbeat of ESSA implementation moves ahead, the America Forward Coalition has engaged throughout this process, including holding an ESSA Title IV, Part A, Student Support and Academic Enrichment (SSAE) grant program webinarwhich provided broader implementation support for members on how to approach and engage Local Educational Agencies (LEAs) on partnership activities, which can also be used to support Pay for Success. The Coalition also submitted comments on a proposed set of questions the Department of Education (ED) plans to use to survey States on their (and their LEAs’) use of SSAE funds for different activities in support of the program’s three goals. In the upcoming Congress, the under its new Democratic leadership, the House Education and Labor Committee has expressed interest in conducting a series of oversight hearings, including on ESSA implementation. Stay tuned for additional updates as we head into the new Congress, and the House Education Committee announces its members.

Strengthening Career and Technical Education for the 21stCentury Act:Signed into law this summer, the Strengthening Career and Technical Education for the 21st Century Act – also known as Perkins V – includes a number of provisions that promote innovation, modernization and the alignment of workforce skills with labor-market needs (see our full summary here). Notably, the legislation also includes the first-ever federal authorization of Career and Technical Education (CTE) funding for Pay for Success. Read more about this change in our blog post entitled, Pay for Success Arrives in Career and Technical Education.

Congressional Updates

Investing in Opportunity Act: Introduced on a bicameral, bipartisan basis, this legislation amends the Internal Revenue Code to authorize the designation of opportunity zones in low-income communities and to provide tax incentives for investments in those zones, including deferring the recognition of capital gains that are reinvested in the zones and reduction of capital gains tax liability for long term investments. The language of the bill was included in the Tax Cuts and Jobs Act of 2017and established this new community development program to encourage long-term investments in low-income urban and rural communities. The chief executives of every U.S. state and territory had up to 120 days from enactment of the legislation to designate up to 25 percent of the total number of qualifying low-income census tracts in a state as Opportunity Zones. All states and Territories have now designated their Zones. Resources are available from the Economic Innovation Group(EIG) who has been a leading voice on this initiative. You can also view EIG’s Coalition letterto the U.S. Department of Treasury detailing its comments and recommendations for realizing Congressional intent with implementation of Opportunity Zones.

Fund for Innovation and Success in Higher Education (FINISH) Act: In July, Senator Orrin Hatch (R-UT), Michael Bennet (D-CO), and Todd Young (R-IN introduced the Fund for Innovation and Success in Higher Education (FINISH) Act. The legislation seeks to harness evidence and innovation to expand access to higher education and help high-need students complete their degree. America Forward partnered with Results for America and Knowledge Alliance on this legislation. View our letter of support here. The bill includes many evidence-based provisions, including a new tiered-evidence innovation fund to test, replicate, and scale innovative higher education solutions; authorizing five Pay for Success pilot projects in higher education; and a one percent set-aside of funds to evaluate and improve programs. Learn more about this legislation here. America Forward, along with Results for America and Knowledge Alliance will work with champions of the FINISH Act in the 116thCongress on the reintroduction of this important legislation. Please stay tuned!

State and Local Updates & Opportunities

California

The Alameda Justice Restoration Project is first Pay for Success in Alameda County. The Alameda County District Attorney, in tandem with various County partners, is pioneering Alameda County Justice Restoration Project (ACJRP) to demonstrate that community-based justice initiatives led by a coach with lived experiences in incarceration and community reintegration can meaningfully improve recidivism and self sufficiency outcomes. The project will serve 125 participants released from jail in Alameda County. The Reinvestment Fund has committed $1.19M to fund the project, with the State of California and Alameda County pledging $1.37M for success payments.

Delaware

In 2018 Governor John Carney signed Senate Bill 242, allowing state government to enter into Pay for Success contracts that will incentivize private funding of economic development and social impact initiatives. Under terms of the contracts, the state would protect taxpayer dollars by reimbursing private funding only if the initiatives reach stated goals, and achieve progress for Delawareans.

Oregon

The Way Home: Lane County Reentry Collaborative launched in 2018 to provide 125 Oregonians who were formerly incarcerated in state prison with permanent supportive housing and case management, with outcomes payments tied to reduced recidivism and increased housing stability.  Year 1 of the project is structured as a Pay for Success project, with the Oregon Community Foundation providing up to $500K in upfront funding and HUD/DOJ making outcome payments. Years 2 and beyond will be structured as an outcomes contract to be issued directly by the state to the service provider.

Virginia

SkillSource Group in Northern Virginia became the first community in the nation to leverage new Pay-for-Performance (P4P) provisions in the 2014 Federal Workforce Innovation and Opportunity Act (WIOA). The three-year initiative, which has already enrolled participants, aims to serve a total of 100 out-of-school and unemployed foster care and justice-involved young adults through mobile outreach and enrollment in the community and targeted case management. Programming addresses key barriers to engaging hard-to-reach young adults in the region and aims to provide much needed support to this vulnerable population.

Washington

The Department of Children, Youth, and Families is partnering with hundreds of contracted service providers around the state to provide vital services to children and their families. The new agency expects to issue more than 1,000 contracts each year to purchase approximately $1 billion in client services over a biennium budget. The legislation that created the agency, House Bill 1661, requires that contracts be “performance-based,” with a focus on quality and outcomes.

Also in Washington State, the King County Outpatient Treatment on Demand project has resulted in promising performance improvements in its first year. The project aims to improve access to outpatient mental health treatment across 23 service providers funded by the Division of Behavioral Health and Recovery. In the first year of the program, the rate of assessment offers within 1 day increased from 63% to 77%, the rate at which people received assessments within 4 days increased from 55% to 67%, and the rate at which people started routine care within 7 days increased from 54% to 61%. Critically, these are population-level changes affecting 21,000 people annually.

Pay for Success and Evidence-Based Resources

What we’re reading

Can pay for success help reduce the number of people with mental illnesses in jail?[Urban Institute]

Bipartisan Recommendations for Evidence-based Policymaking Advance Through Senate[Bipartisan Policy Center]

Free advice for Tony Evers: How he could make Wisconsin state government work better[Journal Sentinel]

“Government by guesswork” is not solving the nation’s social problems. A fundamentally different—evidence based—approach is needed (part one in a series)[Straight Talk on Evidence]

Paul Ryan: The Good, The Bad, The Truly Disappointing[Roll Call]

This Week’s ESSA News: States Rethinking Report Cards, Using Data to Inform School Oversight, Targeting Classrooms for Additional Support & More[The 74 Million]

Time for action to improve government data analysis[The Hill]

What Works Cities Certification[Results for America]

Helpful Links

Evidence-Based Policymaking Primer[Bipartisan Policy Center]

Social Impact Partnership to Pay for Results Act(SIPPRA) [Urban Institute]

Save the Date! America Forward Pay for Success and Evidence-Based Policy Network Call

Please join America Forward on Monday, January 7, from 12:30-1:30 p.m. ET for our next America Forward’s Pay for Success and Evidence-Based Policy Network call.

We will focus on the following items during our time together:

  • SIPPRA implementation update
  • Opportunity Zones
  • Family First
  • Pay for Success in Education (Career and Technical Education and Every Student Succeeds Act)
  • Additional updates on Federal, State, and Local Pay for Success and evidence-based policy

Please contact Jessica Crawford at Jessica_Crawford@newprofit.org for call details or to learn more about the America Forward Coalition.

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