ADMINISTRATIVE OFFICE OF COURTS
300 Dexter Avenue
Montgomery, Alabama 36104-3741

(334) 242-0300 - Fax:(334) 242-2099 - In-State: 1-800-392-8077

February 17, 1999

MEMORANDUM

TO: Members of the Supreme Court Advisory Committee on Child Support Enforcement

FROM: Richard H. Dorrough Chairman

RE: Review of Proposed Changes the Schedule of Basic Child Support Obligations

Pursuant to Rule 32(G), ARJA, at least once every four years, the Administrative Director of Courts (ADC) is required to review the child support guidelines and the schedule of basic child support obligations to ensure that their application results in appropriate child support determinations. Last fall, the ADC contracted with Policy Studies, Inc. (P SI) of Denver, Colorado, to update the schedule of basic child support obligations based on current research and to incorporate changes in federal and state personal income tax rates. The ADC is submitting the proposed changes to the committee for review and recommendation.

Because of the budgetary problems facing the Unified Judicial System, and as only the issue of updating the schedule of basic obligations is being addressed, I am proposing that the committee complete its review and formulate its recommendations by mail.

Attached is a copy of PSI's report, along with a proposed schedule of basic child support obligations. This report provides detailed information on the proposed schedule, the assumptions upon which the schedule is based, and the actual construction of the tables.

The reformulating of the schedule to comply with the more current Betson-Rothbarth economic estimators does decrease some child support obligations based on the change in the estimated expenditure on children as an average proportion of household consumption. The changes in these percentages from the Espenshade estimators (which are currently used) to the Betson-Rothbarth are shown on page 35.

As set forth in this study, one of the most significant changes is the updating of the self-support reserve from $447 net income (or $508 gross) to $671 net income (or $750 gross). The result of the change is to decrease the amount of the child support obligation for gross monthly incomes of under approximately $1,000. (See discussion on page 36 of the report.)

As Alabama ranks 38th in personal income and is 17 percent lower than the national average in personal income, Dr. Jane Venohr, with PSI, suggested that we may wish to consider a self-support reserve of $550 net income (or $616 gross). (This is approximately 17 percent lower than the national poverty level.) Accordingly, PSI generated an alternative schedule based on the adjusted self-support reserve. A copy of this alternative schedule is enclosed.

Another anomaly generated by the self-support reserve is that in some instances an increase in the oblige's income can increase the obligor's support obligation. This anomaly only occurs in those sections of the chart impacted by the self-support reserve. These are the shaded areas on the proposed schedules. Rather than the two alternatives offered on page 24 of the report, I would propose that the commentary be amended to advise parties and the courts that the obligation amounts set forth in the shaded areas are affected by the use of the self-support reserve and may be grounds for rebutting the guidelines (particularly in cases of significant downward modifications or increases because of the anomaly) where their strict application would be manifestly unjust or inequitable.

Both proposed schedules extend the chart to include gross combined incomes up to $15,000. This is a change which the committee had previously requested.

Please review this report and the schedule and return the enclosed comment sheet no later than March 12, 1999, to the attention of Bob Maddox, 300 Dexter Avenue, Montgomery, AL 36104-3741. The responses will be compiled and provided to you in a later mailing. If you have any questions concerning this matter, please call Bob Maddox or Peg Walker at 1-800-392-8077.

RHD/bm
Enclosure

My comments:
Neither Bob Maddox nor Peg Walker are on the CS Committee. Both individuals were at the Access Committee meeting February 26, 1999. They are employees of AOC.

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