Key Cuts Set To Take Effect July 1

June 30, 2009

With the Legislature still debating how to close the current budget gap, it’s worth recalling that policymakers already closed last February’s $40 billion budget gap with significant cuts to health and human service programs for low-income Californians – and some of those cuts take effect tomorrow.

  • SSI/SSP grants for low-income seniors and people with disabilities will drop by 2.3 percent, cutting the maximum grant for an individual from $870 to $850 per month. A previous SSI/SSP grant cut took effect in May, reducing maximum monthly grants for individuals from $907 to the current $870.
  • CalWORKs grants for low-income families with children will be cut by 4 percent, reducing the maximum grant from $723 to $694 per month (the same amount as in 1989) for a family of three in high-cost counties. CalWORKs grants have been frozen since 2004-05.
  • Dental services for most adults in the Medi-Cal Program will be eliminated along with seven other benefits, including eye exams and incontinence creams and washes. (Last week, a trial court judge in Sacramento County ruled against a group that sued to stop the cuts from taking effect.)

A wage cut for in-home care workers was also set to take effect tomorrow, but the workers have won at least a temporary reprieve. The February 2009 budget agreement reduced the maximum amount at which the state will share in the cost of wages and benefits for In-Home Supportive Services (IHSS) providers from $12.10 per hour to $10.10 per hour. (The state shares the cost with counties and the federal government; counties can provide wages and benefits that exceed the state limit, but they have to do so without the benefit of state dollars.) Last week, a federal judge blocked the reduction, arguing that the state had not adequately studied the impact on IHSS services. Press reports indicate that the Schwarzenegger Administration plans to ask the judge to allow the wage cut to go into effect while the ruling is on appeal.

– Scott Graves

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State Freezes Enrollment in Healthy Families Program

June 30, 2009

Yesterday, the Managed Risk Medical Insurance Board (MRMIB) voted to freeze enrollment, effective July 17, 2009, in the Healthy Families Program in order to address a projected $90 million General Fund shortfall in 2009-10. MRMIB estimates that more than 320,000 children will be prevented from enrolling in Healthy Families through June 2010 due to this action.

However, freezing enrollment is not sufficient to achieve $90 million in savings. So MRMIB may also need to drop children from Healthy Families at the time of their annual eligibility review. Children could be removed from the program as soon as February 2010, which would cause nearly 290,000 children to lose their Healthy Families coverage through June 2010.

To sum up: More than 600,000 California children could either lose their Healthy Families coverage or be prevented from enrolling in the program during 2009-10 unless MRMIB finds $90 million to keep the Healthy Families Program whole.

– Scott Graves and Raul Macias

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Posted by cbporg

Healthy Families Program: On the Ropes

June 26, 2009

Facing a potential $90 million state funding shortfall in the Healthy Families Program, the Managed Risk Medical Insurance Board (MRMIB) will meet on Monday to consider establishing a waiting list for the program in 2009-10. Healthy Families provides health, dental, and vision services to more than 900,000 California children with family incomes too high to qualify for the Medi-Cal Program.

The Legislature’s Budget Conference Committee rejected the Governor’s proposal to eliminate Healthy Families to help close the state’s budget gap. Instead, the committee took actions that MRMIB estimates would result in a $90 million state funding shortfall in 2009-10. Despite the current budget impasse in the Legislature, MRMIB will hold a public hearing “to consider whether it must make a finding that there are insufficient funds to cover” Healthy Families spending in 2009-10. The $90 million shortfall would force tens of thousands of low-income children to wait for health coverage and would cause California to lose well over $160 million in federal matching funds.

– Scott Graves and Raul Macias

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CalWORKs: The Rest of the Story

June 24, 2009

The Wall Street Journal reported on Monday that California is one of a number of states that have seen increases in their welfare (Temporary Assistance for Needy Families, or TANF) caseloads as the economic recession has deepened. However, the rising caseload is only part of the story in California. Yes, the caseload in the state’s TANF program – CalWORKs – has increased substantially, rising from about 457,000 families in April 2007, just before the current recession began in California, to about 526,000 families in April 2009 – a 15.3 percent increase. But applications for CalWORKs cash assistance increased even more rapidly, rising from about 38,000 in April 2007 to about 48,000 in April 2009, a 27.5 percent jump.

The fact that applications are rising faster than the caseload suggests that thousands of struggling families are applying for CalWORKs assistance, but are being turned away at the county welfare office due to the state’s stringent eligibility requirements. Take income, for example. A family of three in a high-cost county such as Alameda or Los Angeles currently must have a gross income of less than $1,080 per month, which is nearly 30 percent below the federal poverty level of $1,526 per month for a family of three. In addition, a family can have no more than $2,000 in assets, or $3,000 if at least one family member is at least 60 years old. (California has an asset limit even though the federal government does not require one.) While a family’s home does not count toward the asset limit, the portion of a vehicle’s market value that exceeds $4,650 does count toward the asset limit – so a low-income family that owns anything better than a clunker is likely to be disqualified from CalWORKs based solely on the value of their car.

What’s more, adults who apply for CalWORKs must be fingerprinted and have their photo taken – a requirement that most Californians probably associate more with the police department than the county welfare office. California is one of only two states with a fingerprint imaging system, and the Legislature’s Budget Conference Committee voted last week to eliminate state funding for the system as part of its revisions to the February 2009 budget agreement.

– Scott Graves

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Why Washington Should Help

June 22, 2009

In yesterday’s New York Times online commentary, Room for Debate, CBP Executive Director Jean Ross makes the case for more federal assistance to help mitigate the worst of California’s budget crisis. Jean writes, “California needs direct federal assistance in order to buy time until economic recovery boosts state revenues, as well as to allow the state to enact a much-needed restructuring plan.” Over the long-term, however, restoring California to fiscal health will require addressing the state’s dysfunctions, including its outdated tax system, the gridlock-producing two-thirds vote requirement needed to pass a budget and raise taxes, and the initiative process, which has been used to lock in state spending, reducing flexibility to respond to tough budget times.

– Alissa Anderson

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