How the Legislature Proposes to Cut Welfare by $1.1 Billion

Of the approximately $12 billion in spending reductions proposed by the Legislature in its budget, $1.1 billion fall on the 1.4 million Californians – two-thirds of them children – who receive aid under CalWORKs, the state’s welfare program.

Gov. Jerry Brown’s January budget plan contained $1.5 billion in cuts to welfare recipients, including a 13 percent reduction in monthly support checks and a limit of four years – instead of five – for parents and children to receive assistance.

The Democratic majority Legislature embraced most of the Democratic governor’s proposals but was more generous to the 1 million children within the system.

Lawmakers approved a modified version of the biggest welfare savings put forward by Brown – reducing from five to four the number of years a person can get a cash grant.

To save $833 million, Brown wanted to apply the 48-month limit retroactively to both parents and children. So, if family had been receiving aid for four years as of July 1 they would be off the rolls.

According to the Department of Social Services, which administers CalWORKs, Brown’s plan would have caused 115,000 families and 234,000 children to lose cash assistance.

The Legislature imposes Brown’s four-year limit on adults but does so beginning June 1. Under the legislative proposal, grants continue for children.

Budget savings for the upcoming fiscal year is $158 million.

Currently, the maximum monthly grant for a family of three is $694. If the parent is removed from the rolls, the grant for the two children is $561. In a two-person family, the grant for one child is $345.

However, Brown and lawmakers both agree that the maximum grant should be reduced. Brown proposed a 13 percent drop. Lawmakers settled on 8 percent – the largest percentage one-time cut ever backed by the Legislature.

In so-called “high cost” counties, the maximum monthly grant for a family of three would fall from $694 to $638.

Families in “low cost” counties would see the maximum grant reduced from $661 to $608 per month.

Both reductions are offset by a slight boost in payments under the state’s Food Stamps program, now called CalFresh, of $25 in high cost counties and $17 in low cost counties.

The cuts net the state $300 million, the Legislature estimates.

A two-person family in a high cost county would see their grant fall from by $49 from $561 to $512. The same family in a low cost county would fall from $464 per month to $427.

A family of six currently receives $1,057 in high cost counties. Under the Legislature’s proposal, the family would instead receive $972.

The maximum CalWORKs grant for families of 10 or more is $1,278 in high cost counties. It would fall by $102 each month.

Low and high cost counties were established by law more than 15 years ago during the administration of GOP Gov. Pete Wilson. Their cost of living has not been re-assessed since.

Roughly 60 percent of the 58 counties are high cost, the remainder low cost.

All of California’s counties that touch San Francisco Bay or the Pacific Ocean – except Humboldt and Del Norte – are high cost counties. Inland counties, including Sacramento, are low cost.

Recipients will also see another drop in monthly support from not being able to earn as much outside income without affecting their grant.

Today, the first $225 a welfare recipient earns from working doesn’t count toward determining the size of their monthly grant. Nor does 50 cents of every dollar above $225.

The Legislature proposes instead disregarding the first $112 of outside income and 50 percent of every dollar between $112 and $225 so every working recipient would see a loss of $56 each month.

A $45 million cut is proposed for CalLearn, an incentive program to encourage pregnant teens or parenting teens to stay in school.

The Department of Social Services, which administers CalWORKs, expects 12,969 teens each month to be in the program during the fiscal year starting July 1.

Among the incentives is a $100 bonus per report card, if the teen is making “satisfactory progress.” There’s also a $500 bonus when they graduate. There’s a $100 sanction if no report card is turned in or for failing to make “satisfactory progress.”

For the past two years, the state has reduced the money it sends to counties to administer CalWORKs by $376 million. Those cuts were supposed to stop in the fiscal year beginning July 1.

Instead, lawmakers continue the reduction but make it $427 million instead.


Filed under: Budget and Economy

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