Current: not based on real household expenses on children, and arbitrarily under-accounts for shared parenting time

Supporting Opinion
of
CHILD SUPPORT GUIDELINES ADVISORY COMMITTEE
REVIEW RECOMMENDATION
to
THE KANSAS SUPREME COURT

"FUNDAMENTAL REASONS WHY AN IN-DEPTH KANSAS-SPECIFIC STUDY IS NECESSARY"

May 1998
by
James R. Johnston
Committee Member

EXECUTIVE SUMMARY

This paper goes into detail regarding the fundamental reasons why a Kansas-specific study is needed in order to truly develop child support guidelines that meet the federal requirement of "just and appropriate" awards in each case.
By statute, Kansas is a joint custody preference state. Such custody is ordered in the vast majority of cases. This determination presumes some degree of involvement by both parents. Feedback during public hearings had noncustodial parents claiming passionately that they are having their ability to co-parent their children hampered due to their child support obligations, while incurring many of the same expenses at their home with no recognition in the guidelines, in effect, paying child support twice. Such consideration is almost totally up to the discretion of judges who are provided little to no guidance in how to apply credits. As a result, judges too often apply no credits, unable to determine what is appropriate.
Base "economic data" utilized in the support schedule development is rooted on overall expenditures in "intact" families. Amazingly, a sample of less than 100 households actually reside in Kansas from this national survey. These studies were not developed to measure the expenditures of parents co-parenting in two separate households, and the methodology used in attributing specific "costs" from them to children is questionable at best. The government agency which provides the data used as the basis for our guideline design cautions against using it as a basis for comparison in individual cases, which is exactly what we do in Kansas.
Federal law requires that guidelines be developed to create a "rebuttable presumption" that can be appropriately challenged by comparing actual facts in a particular case to the guideline figure. The baseline data problems combined with the inability to break out the support obligation number by expenditure category (i.e. housing, food, clothing, transportation, etc.), makes rebutting the guideline technically impossible. Neither the parties or the judge, can determine if the amount in the schedule is suitable in each case, or how to weight noncustodial expenditures.
Serious unresolved problems with our guidelines have been recognized by the Committee which the review process is supposed to fully address. Until now, the Committee has continued to only look within the bounds of our existing guidelines, simply modifying the approach used since its inception. The OCSE encourages states to review models and methodologies employed against possibly better alternatives. The Supreme Court is urged to have the Committee continue their work for Kansas. It should explore other credible research that has developed in the 14 years since the original federal mandate, along with a critical look at the fundamental assumptions and data used in our guidelines.
OVERVIEW
Kansas is a joint custody preference state by statute. According to the Legislative Post-Audit study on custody decisions reported to the Kansas State Legislature in January 1987, well over 80% of the cases result in joint custody awards. It is only logical that the most significant reason a judge would order joint custody would be a recognition that both parents are going to maintain some degree of involvement with their child post-separation/divorce. Kansas, by having such a statutory preference, is stating that it is in the child’s best interests to have such involvement with both parents. As will be described below, the financial child support schedules of the guidelines are derived from data collected from overall expenditures made by intact family households throughout the country, with minimal Kansas participation. All relevant costs of raising the child are to be taken into account by the Kansas model used to develop the support obligation schedules, creating a rebuttable presumption. By asking the Supreme Court to authorize an in-depth Kansas-specific study to explicitly include consideration of the costs of parenting to the involved noncustodial parent in raising their child, the Committee recognizes that to-date such costs (especially relevant in a joint custody state), have not been considered. (They are in fact, left totally to the discretion of the Judge, with little guidance on how to consider them in determining an appropriate and just child support award.) Such a study should include a review of the fundamental logic and assumptions involved in determining Kansas child support awards.
The Committee also voted to recommend to the Supreme Court to specifically leave the guideline schedules where they are presently rather than to increase them at this time. This vote was not simply a vote deciding whether to increase the guidelines. It was more a recognition that the majority of the Committee feels that it doesn’t really know what guideline numbers or assumptions used are appropriate to determine Kansas child support obligations. Our actions and study request are consistent with the tone of the 1996 report from the Office of Child Support Enforcement (OCSE) where they said,
"Surprisingly, few States reviewed their core guideline model or methodology. Rather, guideline reviews focused on issues relating to income, adjustments to income, adjustments to the guideline amount, and deviations from the guideline amount." We need to get outside the paradigm that our existing model (using the same "economic studies") is the only way of determining appropriate and just child support awards in the state of Kansas. The reality is that the base economic studies used in child support schedule development were not planned for nor conducted with child support considerations in mind. Rather, they were designed for significantly different purposes, never intended to be specifically applied to individual situations such as child support. Highlighting this fact is that none of the studies measure what the Committee says we need to do in Kansas, and that is to fully understand the impact on both parents’ ability to continue to provide for their children in two separate households, fully considering the involved second parent’s expenses. The group which gathers the base expenditure data used in our model, the United States Bureau of Labor Statistics, cautions against the use of such generalized data to apply to any individual situation, exactly what we do in Kansas. To this point, the Committee has been reviewing the logic of the Kansas child support guidelines based entirely within the bounds of the guideline logic itself. As the Committee report to the Court states, it has gotten to the point where we can’t tell for certain what assumptions have truly been included in the model or not, each of which directly effects the child support schedule values. The Committee also, in essence, has simply gone back to see if the modified guidelines still conform to the original developer’s personal preferences. In the 14 years since the federal government mandated development of statewide child support guidelines, additional research has been conducted, including new scientific approaches that solve many of the problems both in the baseline data used in the Kansas child support model, as well as in the model itself. The flaws inherent in the current child support estimate methodologies are being addressed in this research. These should be fully explored consistent with what the OCSE urges be done regarding methodology review.
In addressing our state’s obligation in compliance with federal child support law, Kansas has opted to accept anecdotal feedback through public hearings, letters to the Advisory Committee, and various surveys, in order to understand how the guidelines are working. In this review process there were limited concerns expressed regarding the adequacy of child support awards made by the courts in Kansas. However, what was loud and clear was that noncustodial parents (of which the vast majority have been awarded joint custody of their children) feel that their costs of raising their children as the non-primary resident has been ignored and hampers their ability to co-parent. Even those parents financially able to continue their involvement with their children, feel wronged by many times having to pay "twice" for child support, covering expenses at the other household, while incurring many of the same direct expenses in the course of parenting themselves, with little or no recognition for them in the guidelines, and therefore the District Courts that apply them. The Committee, in recommending no child support schedule change along with an in-depth study of Kansas child-rearing costs directly, is recognizing that feedback.
Lastly, it would seem appropriate that if our recommendations are accepted by the Supreme Court, then our work should continue rather than recessing for any significant period of time. The Committee, including feedback from the public, has identified major problems, but has not had the opportunity to correct some of the most significant, which the review process is there to do. With the availability of new research data (as yet unexplored by the full Committee), and credible experts to help us understand it, we should aggressively work through them now, truly identifying the most appropriate approach to Kansas cases. According to federal law our review is to assure that use of the guidelines results in a just and appropriate award in every case. Therefore, as a matter of fact, the Committee has not completed the required work. I urge the Justices to keep this in mind as they critique our guideline review.
REBUTTABLE PRESUMPTION
Federal law requires that awards determined by the application of child support guidelines be rebuttable. It specifies:
"A written finding or specific finding on the record that the application of the guidelines would be unjust or inappropriate in a particular case as determined under criteria established by the State, shall be sufficient to rebut the presumption in that case." It further specifies that guidelines: "shall be reviewed at least once every 4 years to ensure that their application results in the determination of appropriate child support award amounts." As stated previously, economic studies used are based on total family expenditures in intact families, estimates of spending that might occur if the parents were living together, sharing all the expenses of a single household. Spending on children in split households has a random relationship to the combined income of the parents. The income of both parents can be appropriately considered in the award decision only if that consideration is consistent with the fact that the parents do not live together and therefore do not use their income jointly. Joint income, and table values related to joint income, have no relationship at all to family economic circumstances in the context of a child support award decision. In Kansas, even assuming that the sample of data is appropriate (and that is dubious as I will show below), individual case circumstances (those which deviate from the circumstances presumed in developing the guideline, such as separate households and continued dual parent involvement) cannot be adequately considered unless the numeric table is categorically divided (food, clothing, shelter, transportation, entertainment, etc.). Without an explicit and clear conceptual basis for the award, a litigant attempting to rebut the presumptive amount on the basis that it is unjust or inappropriate must do so without knowing what just and appropriate means.
The only way to properly apply mathematical decision models within the context of Constitutional justice is to fully disclose the nature of the mathematics, the underlying reasoning, and the assumptions in such a way as to make their review practical in comparison with the circumstances of each case. Currently the Committee reviewing the models and the underlying data, the judges making awards using the resultant support schedules, and attorneys and parents living with the results of them, are not able to directly tie the schedule to specific cases. Federal law (and the Constitution) requires a just and appropriate award in each case, and the goal for us is to construct guidelines that are sufficient to do so in every circumstance to which they are applied. It is also required that judges can identify inappropriate and unjust results and that attorneys and parents can argue for deviation when a formula fails. Kansas is a joint custody preference state by statute, which logically entails some degree of joint parental involvement. Separation/divorce inherently means separate households, therefore, use of the existing guidelines based on intact family expenditures with no inclusion of involved noncustodial parent expenditures on children, is inappropriate in at least 80%+ of the cases for which they are currently being used (representing joint custodial second households), as our guidelines have continued to fail to take such expenditures of an involved second parent into account (not to mention those sole or other types of custody decisions that also involve parental visitation resulting in expenditures as well).
BASE DATA USED IN DETERMINING KANSAS CHILD SUPPORT SCHEDULES
Upon joining the Committee, I was advised by Professor Elrod to be sure to gain an understanding of the economics utilized in the guideline development. Therefore, in an effort to understand our methodology, I researched the data base that feeds the model used in Kansas to establish the various schedules. I was astounded at what I discovered and shared the information with the rest of the Committee at our meeting on April 10th. To my surprise, most of what I shared had not been discussed to any degree with the Committee previously.
Kansas guidelines utilize expenditure data developed from the Bureau of Labor Statistics (BLS) annual Consumer Expenditure Survey (CES) in the development of its child support obligation schedules. It consists of 5,000 household surveys conducted each quarter, totaling 20,000 surveys/year. (The BLS said that the 5,000 surveyed is a staggered pool, with 5 quarters of participation. Essentially that means the whole sample is the same 5,000 households for 3 quarters, and a new 5,000 for a 4^th quarter.)
Recognizing that we are to have Guidelines appropriate to Kansas, I called the regional BLS office in Kansas City, as well as their main office in Washington, and asked how many of the sample actually came from Kansas. All they could tell me was that it was "somewhat less than 100 surveys" (with all but a few out of the Kansas City Metro area, some number from Lawrence, and none from any other cities in the state). Therefore, our guidelines, to specifically apply to Kansas child support cases, are based upon generalized data, virtually all of which comes from out of state, and again which are derived from intact family expenditures.
The BLS publishes a list of "Frequently Asked Questions" regarding the CES. Number 15 specifically asks and answers:
"What are some of the Limitations of the Data?"
"The Interview and Diary Surveys are sample surveys and are subject to two types of errors, nonsampling and sampling. Nonsampling errors can be attributed to many sources, such as differences in the interpretation of questions, inability or unwillingness of the respondent to provide correct information, mistakes in recording or coding the data obtained, and other errors of collection, response, processing, coverage, and estimation for missing data. THE FULL EXTENT OF NONSAMPLING ERROR IS UNKNOWN. (All caps added for emphasis) Sampling errors occur because the survey data are collected from a sample and not from the entire population. Tables with coefficients of variation and other reliability statistics are available on request. However, because the statistics are shown at the detailed item level, the tables are extensive."
"CAUTION SHOULD BE USED IN INTERPRETING THE EXPENDITURE DATA, ESPECIALLY WHEN RELATING AVERAGES TO INDIVIDUAL CIRCUMSTANCES. (All caps added for emphasis) The data shown in the published tables are averages for demographic groups of consumer units. Expenditures by individual consumer units may differ from the average even if the characteristics of the group are similar to the individual consumer unit. Income, family size, age of family members, geographic location, and individual tastes and preferences all influence expenditures."

Along these same lines, Committee member and economist Dr. Terrell, who has to his credit, devoted a great deal of work on the model used in Kansas, admitted to me in a letter dated April 22^nd, 1998 in answer to my request for a detailed break out of expenditure areas at various income levels, that: "Given the same total level of spending due to children, the component parts will vary from family to family. That is, families, say, with a focus on dental and health care might show above average child spending on these items, and below average spending on children’s clothing. This applies to the USDA (United States Department of Agriculture) estimated components as well, i.e., no measures of variation are presented for the component parts."
"In short, if the total amount of child support that is supposed to be spent due to children is in fact spent for that purpose, then the component parts are irrelevant. Further, about 75 to 80 per cent of expenditures on children involve jointly consumed goods, e.g., home, auto, utilities, etc… This further complicates the question of how much is spent (on average) for each spending class."
The application of this generalized data (currently utilized in Kansas) both from the federal government agency gathering the baseline data, as well as our Committee’s expert, shows no direct relationship with specific circumstances around individual child support scenarios in Kansas. The BLS explicitly discourages such application of data potentially riddled with nonsampling errors, and our Committee economist admits such detail necessary in order to potentially rebut, is not discernible from the model. Dr. Terrell is also pointing out that there are absolute limits to what can be derived from the CES. Kansas guidelines currently in use, stake their entire logic on inferences from the CES. But the CES itself has no way of telling us what the right redistribution of income actually is. It is necessary to supplement the statistical work with what the OCSE report has pointed out is missing in state reviews, the fundamental logic of the guidelines must also be further developed.
Continuing, the Kansas model takes the CES data as repackaged by the United States Department of Agriculture (USDA) in their report, "Expenditure of Children By Families" which is published each year. From the 5,000 household CES data, the USDA culls it down based on the following qualifiers:

One child of own, 17 years of age or younger in the household

Six or fewer children

No other related/unrelated people present in the household

Complete income reporters (earn taxable wages)

16,245 Total Survey-Households qualified for 1997 sample
(12,850 Husband and Wife households/3,395 Single-parent households)
There is a two child assumption per Husband-Wife household.
The country is then divided into regions; West/Northeast/South/Midwest, and a general US Rural category. (Kansas is part of their Midwest Region which also includes: Illinois, Indiana, Iowa, Michigan, Minnesota, Missouri, Nebraska, North Dakota, Ohio, South Dakota, and Wisconsin. According to the USDA, among the regions, the Midwest is the lowest for child-rearing expenses)
The Expenditure Categories are:
Housing
Food
Transportation
Clothing
Healthcare
Child care and education
Miscellaneous The expenditures for Clothing, and Child care and education only apply to children and are divided equally between them, and exclude adult-related expenses. Food expenditures are determined from the USDA Food Plans to allocate among the various family members. Healthcare expenditures are derived from the National Medical Expenditure Survey, and allocated among the family members by age, etc.
Expenditures for Housing, Transportation, and Miscellaneous goods and services however, are allocated on a per capita basis (divided equally among the members). This has the effect of minimizing the costs to adult members, while raising the level of expenditures on children. According to the USDA, this is done as they say there is no research base for allocating these expenses, and they reject the marginal cost method as well for that reason. (The study itself however, addresses the marginal cost basis in some detail in the report appendix, referring to studies that show that use of the marginal cost basis can reduce Housing expenditures by 28-44%, and the Miscellaneous category by 28%.)
The per capita methodology employed for these categories also shows problems when reviewing what is specifically included in these expenditures. For instance, Miscellaneous specifically includes such things as manicures, make-up, hair styling, health club memberships, country club memberships, etc. Surely, many of the expensive costs associated with maintaining adults should not be equally distributed amongst all family members including children since they are not costs associated with raising children. The Transportation cost share as determined by the USDA included vacation travel expenses as well as automobile transportation expenses that were calculated by subtracting the costs associated with travel to work. That is they subtracted the mileage associated with getting to work from the costs of the automobile, insurance, maintenance, etc., and then divided this amount by the number of members in a family. For instance, a car costing $12,000 the day before a baby is added to an expectant family, is allocated at $6,000 for each parent. The next day, with baby arrived, the cost of the car attributed to the baby suddenly on the scene is $4,000! Arguably, the mileage directly associated with transporting children would be more accurate than USDA estimates, which seem to be grossly exaggerated. The same type of treatment occurs for Housing. Using the expectant family example, the day before the baby’s arrival, the cost for housing is divided equally between the two adults. Upon the baby’s arrival, the cost of housing is suddenly divided equally between the adults and the baby. Are these children supposed to be buying their own cars and living in their own apartments? Or are they living in a parent’s residence and being transported sometimes, including family outings to places the parent would be going anyway? On the face of it, it is obvious that such allocations are questionable. These points have not been so obvious in the past because the estimates have not been separated to the point that anyone on the Committee understood what the numbers in the guideline mean. With today’s guidelines, and their underlying data, how in the world can parents, attorneys, and judges begin to understand them within the context of due process?
Regionalizing data creates problems as well for the specific figures used to calculate Kansas child support schedules. Tax rates differ in each of the 12 states in the Midwest region, along with differing costs of living. Although the survey says that the measure of expenditures for items is after tax (arguing that it is therefore then held constant across the country), the reality is that the level of income available based on after tax and cost of living differs across the region as income available to spend varies as a result. (This also highlights an additional area of concern regarding available income for expenditure on children in the noncustodial home, which as stated previously, remains unaccounted for and unmeasured.)
Kansas utilizes the income-shares (I-S) model based on what was developed by Dr. Robert Williams which attempts to determine the costs of raising children in the U.S. This approach increases the dollar amount allocated to raising children as income level of both parents increases, but takes into account that the actual percentage of parental income spent on a child decreases as income increases. Upon determining from the guidelines the appropriate support amount for the children, the child support is then apportioned between the parents based on each parent’s proportion of the total parent income. Additionally, Kansas similarly apportions cost for child care and medical expenses added to the basic support amount.
As stated previously, to get to the schedules that have been developed, Kansas has utilized the CES data to feed into the model. I have pointed out many of the problems inherent in that data being used to determine Kansas child support schedules. But there are also several flaws in the I-S model. First off is that actual expenditures on children by families is not addressed. The methodology used to track family expenditures do not actually track all costs per person through a marginal cost accounting basis, and thus do not reflect true costs. Again, what is reported are total "intact" family expenditures, which are then generally allocated to children, and then which are entered into the Kansas economic model based on the parameters established by the modeler (certainly not any specific individual child support case at hand). Additionally, the Kansas model also fails to account for costs incurred while the noncustodial parent exercises his/her parenting time. Lastly, the model purports to accurately reflect what it costs to raise a child in Kansas, based on a household expenditure survey sample size consisting of "somewhat less than 100" Kansas participants! (We don’t even know what circumstances exist in the small Kansas sample, such as incomes, housing situation, children’s ages, etc.) An argument may be made that since about 30% of Kansas cases involve interstate child support orders, regional and national data is fine. However, orders under the jurisdiction of Kansas, should be based on what it costs to raise a child specifically in Kansas as the starting point.
SUMMARY
The Child Support Guidelines Advisory Committee has voted to leave the current child support schedules unchanged. Questions during this review period have been raised as to the appropriateness of the methodology and economic data utilized to develop Kansas-specific support schedules. The Supreme Court and citizens of Kansas should not be concerned that Guideline support schedules were not increased, as very few public complaints are occurring about the adequacy of awards. Some may express concern that Kansas has drifted below the median point for average child support awards in the United States, however, it should also be noted that the median household income in Kansas ranks only 37^th out of the 50 states and Washington D.C. according to the United States Census in 1996, and 10^th of the 12 states considered in the Midwest Region of the USDA study cited above. Additionally, comparing child support orders across states is like comparing apples to oranges. They may call it the same, but all states are not presumptive joint custody states; all states do not use the same model; and all states are indeed not Kansas.
The Committee has also urged the Supreme Court to authorize an in-depth study of the true costs of child-rearing in Kansas, to expressly include those incurred by the second involved parent. With this recommendation, it seems appropriate to also request that the Committee remain in session, rather than recessing. To recess now would be ignoring our responsibility of ensuring Kansans that appropriate and just child support decisions will be made for each specific case. As the above has shown, that cannot be done with current guidelines in place. We should aggressively pursue looking at additional methodologies and economic data gathering that will assure appropriate and just child support awards in Kansas. Further, the Committee should fully review the fundamental logic leading to child support awards. From there, a full review of available research will better enable it to put forth a full recommendation on what Kansas-specific guidelines should look like, ultimately allowing each of the parties to a child support case in this state to be better able to exercise their full due process.
Lastly, some on the Committee have expressed a concern that it might be too costly to conduct a Kansas-specific study, to include data collection. However, this cost is arguably quite negligible compared to the impact of our current approach. Also, their inclination would then be to continue on using the same methodology and data that other states are using, falling back on the false belief that what we have today is the best we can do. To do just that would be ignoring our responsibility to be thorough in our guideline review. We can continue using today’s slightly revised guidelines while exploring options available from the myriad number of grants available to the states around child support. Because such a study would also consider the costs of the involved second parent, grants promoting visitation could also be explored, along with possible private sources. (To that end I have been in contact with Representative Todd Tiahrt’s office in Washington, asking his help in understanding where funding might be available for Kansas to pursue for this work.) This will take a great deal of effort, but we should not rest until we are confident of a set of guidelines that will allow true due process, leading to an appropriate and just child support award in each case in Kansas.