Archive for Sunday, May 9, 2004

Bill contains provision attacking outsourcing of SRS work

May 9, 2004


— Workers outside the United States could not handle telephone calls from Kansans who have questions about food stamps, under a budget bill legislators approved Saturday.

The measure would require the Department of Social and Rehabilitation Services to renegotiate its $1.7 million-a-year contract with Arizona-based eFunds Corp. to administer the food stamp program, SRS spokesman Kyle Kessler said. The agency does not know whether contract costs will increase.

The ban on outsourcing would apply only to the food stamps program and would take effect Jan. 1, 2005. SRS also would be required to make it possible for people who receive cash assistance from Kansas or other states to work in any center answering Kansans' calls about food stamps.

The prohibition on outsourcing was included in a larger bill completing a $10.3 billion state budget legislators already have approved for the fiscal year beginning July 1.

The Senate passed the budget cleanup bill, 30-5. The House approved the measure, 95-19, sending it to Gov. Kathleen Sebelius.

Outsourcing surfaced as an issue in March, after some legislators learned that Kansans' calls about food stamps were answered by workers in India.

"Why are we outsourcing jobs overseas?" said Rep. Tom Holland, D-Baldwin City, author of the outsourcing ban in the budget cleanup bill. "We could be doing the work right here in Kansas."

The Department of Social and Rehabilitation Services signed a contract with eFunds Corp. in September 2002 to handle food-stamp benefits and take clients' calls.

In its 2003 annual report, eFunds said it has two customer call centers in India and that about 3,100 of its 5,400 employees are outside the United States.

In March, Sen. Mark Taddiken, R-Clifton, persuaded fellow senators to add a ban on outsourcing of food stamps work to a bill containing the bulk of the next fiscal year's budget. Under Taddiken's proposal, the ban would have taken effect on July 1.

SRS Secretary Janet Schalansky then told legislators that the ban would raise the cost of the eFunds contract by about $640,000 -- or 38 percent -- because the company would have to set up a center in Kansas.

Legislators then dropped Taddiken's proposal from the budget, but the issue remained alive because many legislators liked the idea of attacking outsourcing.

"Sending taxpayers' dollars overseas isn't good policy when you have Kansans here on unemployment who are qualified to do the job," Taddiken said during an interview Saturday.

Kessler said the latest version of the outsourcing ban is better than Taddiken's proposal because it gives SRS more time to renegotiate its contract with eFunds.

"We don't know yet what the fiscal effects will be," Kessler said. "There could be some costs."

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