July 9, 2009
Given the Governor’s recent media blitz against CalWORKs – the state’s welfare-to-work program – and his latest proposals to slash basic subsistence payments for hundreds of thousands of California’s poorest children, Californians could be forgiven for thinking that the CalWORKs Program is somehow contributing to the state’s budget problem.
It’s not.
As we noted yesterday, the number of families receiving CalWORKs cash aid has dropped by more than 400,000 since 1995. Here’s some more food for thought:
- Total spending on “welfare” in California (including federal, state, and county funds) has fallen dramatically since the mid-1990s, when cash assistance was provided under the former Aid to Families With Dependent Children (AFDC) Program. Total spending on welfare fell by nearly one-third (32 percent) between 1996-97 and 2008-09, after adjusting for inflation. In contrast, the total state budget (including state and federal funds) increased by 48 percent during the same period, after adjusting for inflation.
- Welfare spending in California made up about 7 percent of the state budget in 1996-97. Today, it makes up about 3 percent.
- A new fact sheet from the County Welfare Directors Association and the California State Association of Counties points out that CalWORKs has actually generated more than $12 billion in General Fund savings since CalWORKs was implemented in 1998. How? By shifting federal Temporary Assistance for Needy Families (TANF) block grant funds as well as state matching funds from CalWORKs to other programs – as allowed by federal law – thereby “enabling the state to spend less General Fund.”
In short, CalWORKs has shrunk over the past decade. It has not contributed to the state’s budget woes. It has helped the state reduce General Fund spending and close past budget shortfalls. CalWORKs has given a lot, but it can’t give anymore without undermining the program’s basic purpose of reducing the number of children facing complete destitution and helping low-income families move toward self-sufficiency. Nonetheless, the Governor has dedicated himself to trying to squeeze more blood from this budgetary turnip.
– Scott Graves
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Human Services & Child Care | Tagged: California Budget, CalWORKs, State Budget | 
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Posted by cbporg
July 8, 2009
Today, Governor Schwarzenegger held a press conference to outline his proposed changes to the CalWORKs Program, including imposing stricter penalties for recipients who do not, or cannot, meet CalWORKs work participation requirements. He also seeks to reduce lifetime limits on CalWORKs assistance for those not meeting federal work requirements.
The CBP will be taking a closer look at these proposals; stay tuned. But there are some important points CBP staff want to add to this conversation right now:
- The labor market is tough. The state’s unemployment rate reached a record high of 11.5 percent in May, and individuals with limited education, that is, the very people who may rely on CalWORKs for economic security, face an even higher unemployment rate. Just because the Schwarzenegger Administration wants CalWORKs recipients to be employed doesn’t mean there are jobs available.
- Recognizing the importance of a strong safety net and the need to infuse local economies with additional funds during the recession, the federal government is offering to pay 80 percent of the cost of increased CalWORKs caseloads through the federal economic recovery bill.
- Contrary to the Governor’s claims, CalWORKs caseloads aren’t “increasing every year.” The number of families receiving CalWORKs dropped by more than 400,000 between March 1995 and March 2009. Yes, the CalWORKs caseload has gone up since July of 2007 – not surprising, given the economic downturn – but the overall trend in California slopes downward.
– Vicky Lovell
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Human Services & Child Care | Tagged: CalWORKS Program, federal work requirements, work participation requirements | 
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Posted by cbporg
July 8, 2009
California families struggling to put food on the table during a period of record-high unemployment (the unemployment rate was 11.5 percent as of May) received a boost from a new state policy that took effect last week. Under new rules issued by the Department of Social Services (DSS) that reflect a change in state law (Beall, Chapter 625 of 2008), California families with children that receive nutritional benefits through the Food Stamp Program no longer have to meet the “asset test,” which limits most households to just $2,000 in savings and other assets (with some exceptions) in order to qualify for benefits.
Now, families coping with a layoff and a significant loss of income won’t have to “spend down” their savings in order to qualify for food stamp benefits. In addition, some families that would have forgone food stamp benefits in order to preserve more of their hard-won savings are now more likely to participate in the program. Finally, families that currently receive food stamps won’t have to curtail their efforts to save for the future in order to stay under the artificial $2,000 threshold. (However, families still must continue to meet other requirements, including a stringent income test.) This policy change took effect on July 1 for current food stamp recipients with children, and counties are required to eliminate the asset test for new food stamp applicants with children by January 1, 2010. However, DSS decided not to change the rules for some households: Unlike families with children, single adults or adults who live together without kids must continue to meet the asset test to qualify for food stamp benefits.
Helping more low-income California families qualify for and retain food stamp benefits will help boost the state’s ailing economy by circulating more federal dollars through local economies. Food stamp benefits are 100 percent federally funded, and the economic recovery bill signed by President Obama in February temporarily increased benefits by 13.6 percent. This increase will raise the average household benefit in California from about $300 to $341 per month. As the Wall Street Journal noted yesterday, “the food-stamp boost [to the economy] is almost immediate,” with families redeeming nearly all benefits within a month of receipt. “The quick influx of cash into the economy reflects the often desperate situation faced by millions of households struggling to put enough food on the table.”
– Scott Graves
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Human Services & Child Care | Tagged: Department of Social Services, economy, Food Stamp Program, unemployment | 
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Posted by cbporg
July 2, 2009
As State Controller John Chiang began the process of issuing IOUs to deal with the state’s cash flow crisis, Jean Ross, executive director of the CBP, released this statement today to the media:
“California’s current cash flow crisis is a symptom of its persistent budget shortfalls, a drop in revenues brought about by the current economic downturn, and the problems in the global credit market, which make it difficult for the state to borrow money. But there’s a fourth culprit at work right now in California, one we can do something about: the state’s two-thirds vote requirement to pass a budget and tax increases. Without the two-thirds vote requirement, it’s likely that California’s policymakers would have been able to come to an agreement that could have averted the issuing of IOUs.
California is the only state in the nation that requires a two-thirds vote to pass both a budget and tax increases. Today, more than ever, we see how necessary it is to change that supermajority vote requirement to a majority vote.”
– Lisa Gardiner
2 Comments | State Budget | Tagged: California Budget, cash flow crisis, IOUs, State Budget, two-thirds vote requirement | Permalink
Posted by cbporg
July 1, 2009
California’s fiscal crisis has many immediate and clear impacts, but other serious consequences are less obvious. Recent budget cuts to basic skills education – those adult education classes that teach the English and math skills necessary for success in jobs, community colleges, universities, or vocational education – are already translating into fewer courses, teacher layoffs, and restrictions on enrollment. With more cuts being proposed by Governor Schwarzenegger, CBP Senior Fellow Barbara Baran and CBP Senior Policy Analyst Vicky Lovell argue in an op-ed in the San Francisco Chronicle today that the state’s economic competitiveness is threatened as well.
Before the budget crisis, basic skills education was starting to get the attention it deserves: Reforms were under way and funding was up. Demand for these classes was growing as students sought training for new jobs. Now, they write that “dismantling these efforts is likely to ensure that the next generation of workers will be the first in the state’s history to have lower levels of educational attainment than the generation that preceded it, threatening California’s economic future.”
– Lisa Gardiner
1 Comment | Workforce & Economic Development | Tagged: basic skills, California Budget | Permalink
Posted by cbporg
