California Budget Bites

The Assembly and Senate Budget committees took action Wednesday to rescind or reduce several cuts to children’s programs that were passed in March and were set to take effect in 2011-12. The committees’ actions mitigate the impact of deep cuts to child care and the CalWORKs welfare-to-work program that have been made in recent years. The Assembly Budget Committee and the Senate Budget and Fiscal Review Committee voted to:

• Rescind the cut to CalWORKs “child-only” grants. In March, the Legislature voted to reduce child-only grants – those provided on behalf of children in a household, not adults – by up to 15 percent for kids who have received cash assistance for more than five years. This cut was expected to reduce cash assistance for more than 325,000 children in 2011-12. The Budget committees repealed the child-only grant cut, but left in place a separate 8 percent reduction to cash assistance that will affect all CalWORKs families beginning July 1, 2011.

• Restore $50 million in funding for CalWORKs employment services and Stage 1 child care. Counties provide a range of services to help parents move from welfare to work, including job training, job search assistance, and child care. In March, the Legislature reduced funding for these services by $427 million in 2011-12. This cut was expected to cause more than 15,200 CalWORKs families to lose Stage 1 child care. The Budget committees restored $50 million, reducing the 2011-12 cut to $377 million – equivalent to the cuts implemented in 2009-10 and 2010-11. Roughly 12,600 CalWORKs families could lose Stage 1 child care in 2011-12 under the smaller reduction approved by the Budget committees.

• Restore child care for 11- and 12-year-olds during traditional work hours. In March, the Legislature voted to restrict child care to children age 10 or younger during traditional work hours – Monday through Friday, 6 a.m. to 6 p.m. This change was expected to cause 5,500 11- and 12-year-olds to lose child care in 2011-12. The Budget committees repealed the cut.

• Reduce funding for preschool and most child care programs by 11 percent rather than by 15 percent. The 15 percent cut to slots approved in March – which did not apply to CalWORKs Stages 1 and 2 child care – was projected to cause more than 35,000 children to lose access to child care and preschool in 2011-12. The 11 percent cut adopted by the Budget committees would cause a smaller number of children – roughly 25,500 – to lose access to child care and preschool in 2011-12.

• Rescind the 10 percent rate cut for “Title 5” child care and preschool providers. Title 5 child care and preschool providers – those who contract directly with the California Department of Education – receive a “standard reimbursement rate” (SRR) to support their operations. The SRR, which was last increased in 2007-08, is a statewide fixed rate per child that is set at $34.38 per day for child care programs and $21.22 per day for part-day preschool programs. In March, the Legislature voted to reduce those rates by 10 percent in 2011-12, a cut that came on top of the separate 15 percent funding reduction described above. Many providers suggested that the combined impact of these cuts would lead to layoffs or the closure of child care and preschool centers. The Budget committees repealed the SRR cut, effectively freezing the SRR at the current level in 2011-12.

• Rescind the cost-shift to families. In March, the Legislature increased the fees that families pay for child care and preschool by 10 percent in 2011-12. The Budget committees repealed that increase.

No agreement has been announced on a 2011-12 spending plan, so it is uncertain whether all of these restorations will remain part of the final budget package. However, the Assembly and Senate have moved in the right direction by mitigating deep cuts to key public structures for low-income children and their families – CalWORKs, child care, and preschool – which will help keep more parents working and more children in good hands.

– Scott Graves

The reductions approved by the Legislature this week to help close the state’s massive budget shortfall will have a deep and lasting impact on Californians – from working families who need affordable child care to youth struggling to pay for college to people with disabilities hoping to live independently in their own homes. But perhaps no group of Californians has been more deeply affected than low-income families with children who rely on cash assistance from CalWORKs, the state’s welfare-to-work program, to help keep a roof over their heads.

The Legislature cut CalWORKs grants by 8 percent, which comes on top of a 4 percent reduction implemented in 2009. As a result, the maximum CalWORKs grant for a family of three in high-cost counties has dropped by $85 per month – from $723 in 2009 to $638, approximately the same amount ($633) that a family of three received in 1987, without adjusting for inflation. In addition, the Legislature cut “child-only” grants – those that are provided on behalf of children, but not their parents or guardians – by an additional 5 percent to 15 percent, depending on the length of time on aid. This additional cut would affect approximately 150,000 families with more than 300,000 children, according to state data. What’s more, nearly three-quarters of those families will face the maximum 15 percent reduction, which would be in addition to the 8 percent cut. Bottom line: More than 100,000 very low-income families will lose nearly one-quarter of the income that they rely on to pay the rent and buy clothing and other necessities. This translates into a loss of as much as $120 per month for a single parent with two children living in a high-cost county, such as Alameda or Los Angeles.

The Governor said the cuts needed to help bring the state budget into balance would be painful, and he was right. Now that the cuts have been made, we sincerely hope our elected leaders move just as quickly to implement the other half of a balanced solution by putting the Governor’s proposed temporary tax extensions before the voters and eliminating extremely costly and ineffective programs – with redevelopment and enterprise zones at the top of the list.

– Scott Graves