States Struggle to Fund Crime Victims’ Compensation Programs

February 10, 2009

On a June night two summers ago, Debra Rabideau-Stevens tried to break up a fight between two women at a northern Wisconsin tavern.

The husband of one of the women grabbed her wrist, snapping it in two places. Four operations later, she has racked up more than $31,000 in medical bills.

With no insurance and no job, the former cook turned to Wisconsin’s crime victim compensation fund. But the cash-strapped program has covered less than half of her expenses, leaving her to fend off as many as eight creditor calls a day.

“I respond to them and try to explain to them,” said Rabideau-Stevens, 47, of Ashland. “But it just doesn’t help. It’s a nightmare.”

Around the country, state programs designed to help crime victims rebuild their lives are running out of money as claims increase, medical expenses rise and lawmakers cope with the recession. Several states’ programs face deficits or have cut benefits.

Not every state is in the red. But program coordinators say this could be the beginning of deeper problems as legislators desperate for money to shore up budget deficits eye compensation funds.

“Given the awful situation they’re in now, states are looking at moving that money away into other parts,” said Steve Derene, executive director of the National Association of Victims of Crime Act Assistance Administrators. “It’s dire for everybody on all fronts.”

Each state offers crime victims and their survivors money to cover damages that include lost wages, counseling, dental and medical bills and funerals. Maximum payouts vary, but range around $25,000. The programs provide about $450 million each year to about 200,000 victims, according to the National Association of Crime Victim Compensation Boards.

Some states rely on legislative appropriations of tax dollars or criminal penalty assessments to pay for compensation. Others make offenders pay surcharges and fees. The federal government chips in, too, matching state expenditures with grants. However, the grants typically lag two or three years behind expenditures.

More people are turning to the programs as they lose their jobs and benefits, coordinators say. The number of claims approved nationwide grew about 31 percent over the last decade, from 117,486 in 1998 to 172,378 in 2007, according to U.S. Justice Department figures.

Over that same period, medical reimbursements grew 42 percent, from $131.4 million in 1998 to $228.8 million in 2007. Funeral expenses went up 26 percent, from $26.9 million to $36.8 million.

“The money just doesn’t go as far as it used to. If you got punched in the face and you went into the emergency room for medical services, they used to give you an X-ray. Now they’ll give you a cat scan or two or three,” said Kathy Matson, crime victim compensation program officer in Montana.

States with money dedicated to compensation are holding their own. California, Florida, Texas and New York pull money straight from offenders and their programs remain in the black.

But states that depend on legislatures to devote dollars to compensation are hurting as lawmakers struggle to fill other shortfalls. Illinois, Minnesota, Montana, North Dakota and Wisconsin either face deficits or have cut benefits. Wyoming’s compensation fund is solvent, but its reserves are depleted and officials may consider reducing benefit levels.

“The state budget crises have placed pressures on all government programs. Those funded through legislative appropriation are as vulnerable as any other program,” said NACVCB executive director Dan Eddy.

Minnesota lawmakers appropriated about $2 million a year over the last decade for compensation, said Marie Bibus, director of that state’s compensation program. The state has avoided deficit spending, but has slashed benefits. In July 2007 the state cut its medical coverage from 70 percent to 50 percent and funeral coverage from $7,500 to $6,500.

Montana also relies on a legislative appropriation to run its program. That state has run a deficit for at least the last two years, Matson said. The program has spread payments out over years and last summer dropped its overall benefit cap by half, she said.

“It’s the only way we can make the program work,” Matson said.

Wisconsin legislators have earmarked $1.2 million for compensation every fiscal year since 2003 but has run a deficit every year since then but one. It exhausted the allocation each of the last four years within six months as the money went to pay a backlog of claims. In 2007 and 2008 the state burned through the money in two months.

Even states that have met their claims are wary as state revenue plummets in the recession and people lose jobs and insurance, making them more likely to turn to compensation programs if they become crime victims.

California paid out $81.2 million in compensation payments in the year that ended June 30, 2008. Last year lawmakers pulled $50 million out of the restitution fund into the state’s general fund, said Miles Bristow, a spokesman for the California Victim Compensation and Government Claims Board. The fund remains solvent, but it might be targeted again as California faces an $8.4 billion shortfall in its next budget.

Lois Flaig, 58, of Shawano, Wis., helped her three young nephews apply for compensation from the state after their house burned down last year, killing their mother. Prosecutors say their father set the fire to kill their mother.

State officials told her program payments were frozen.

“They lost everything, from their eye glasses to their contacts, to their medication, all their personal belongings. Their father is in jail for setting the fire,” Flaig said. “I understand everything is being cut back, but darn it all, these three boys have lost everything and they’re not going to get anything.”

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