The Byzantine world of California welfare funding

Limiting support for parents on welfare to two years instead of four unless they work at least 30 hours a week is trumpeted by Gov. Jerry Brown as one of this year’s cost-saving budget reforms.

It isn’t.  

Nearly all of the $470 million saved in the state’s welfare program during the current fiscal year actually comes from encouraging as many as one-fifth of adult recipients not to work.

Under the new eligibility rules, adults who start receiving aid on or after January 1, 2013 through the state’s 14-year-old CalWORKs program will lose their state support check if they don’t find a job that meets the weekly minimum hours within 24 months.   

Losing that state support represents a $122 reduction in the $638 maximum monthly check for a family of three living in the state’s urban areas. The average grant for a CalWORKs family is $463, down from $514 last year, according to the latest state statistics.

“It’s an extremely significant reduction in the time to provide the full array of welfare-to-work options and the support needed to take advantage of those options,” said Frank Mecca, executive director of the County Welfare Directors Association of California.

The Democratic governor insists the more restrictive policy is required to rein in state costs and return CalWORKs to its original purpose – moving poor families off the dole and into jobs that make them economically self-sufficient.

“With limited resources available, the CalWORKs program was refocused to prioritize those resources to help families most likely to become employed,” said Michael Weston, a spokesman for the state Department of Social Services, which administers the $5.1 billion program, of which $3.6 billion comes from the federal government.

Others note that another purpose of CalWORKs is to provide a safety net for children living in poverty who the state says represent 78 percent of those receiving assistance under the program.

This year’s budget actions come on the heels of last year’s 8 percent cut in maximum monthly grants — dropping aid for a family of three from $694 to the current $638 – as well as shortening eligibility for adults from five years to four and reducing spending for substance abuse and mental health services.

The $638 maximum, which is $30 lower in rural counties, is almost $60 less than the same family was receiving in 1989 when George Deukmejian was governor. Except with inflation $638 buys 53 percent less than it did 25 years ago.

Even with a maximum of $484 in monthly assistance from CalFresh, formerly the state’s Food Stamps program, a family of three on welfare receives just under $13,500 annually – more than $5,500 below the federal poverty line of $19,090 for the same sized family.

On Page 32 of the summary of the budget Brown signed June 27, the Democratic governor says the rule changes approved by lawmakers this year will cut nearly $470 million in costs to the program, which aids 1.4 million Californians, 1.1 million of them children, according to the state’s most recent statistics.

The $470 million in savings doesn’t come from any of the policy changes listed under “CalWORKs Refocus” on Page 32 of the summary.

In fact, there are administrative costs in the tens of millions to implement the new eligibility rules – although the budget summary doesn’t say so.

Of the $470 million savings, $444 million is generated by continuing to exempt from existing work requirements single parents with a child under the age of two or two children under age six.

This “temporary exemption” has been in place for two years; 2012 makes three.

A May 2012 study by the Public Policy Institute of California, using 2009 numbers, says the exemption has doubled the families not working from 11 percent to 22 percent of the caseload.

Chief among the reasons such an exemption is attractive to the state is that parents who aren’t working or seeking a job don’t need vocational services or childcare, which is more expensive the younger the child.

The exemption continues through the end of 2012 when the federal work requirements take effect.

But even after January 1, 2013, as part of this year’s budget deal, CalWORKs recipients can still win a one-time exemption from work requirements to care for a child two years of age or under.

The same PPIC study found 26 percent of CalWORKs families had a child under age two and 19 percent had two children under age six.

Brown contends that imposing the federal work rules after a recipient has had two years to avail themselves of state-subsidized training, college courses and other job readiness programs will save money in the long run by reducing the number of Californians receiving aid in a shorter period of time.

The PPIC study shows that half of current CalWORKs recipients have received assistance for two years or less but that 20 percent of CalWORKs families have gotten aid for more than five years.

“Long stays are relatively longer for families with greater disadvantage – for example families with parents who lack a high school degree and those in which parents have never been eligible for a grant or work services,” the study says.

Critics of the arbitrary two-year cut-off say it’s those recipients needing the most intensive assistance who would fall from the rolls, increasing their poverty.

“There’s this focus on the virtues and vices of parents and what’s fair to incentivize or penalize their behavior but children are more than two-thirds of the people benefiting from this program and the research on the impact of poverty on children and its huge cost to society is pretty stark,” Mecca told Capitol Weekly.

Others question whether there are jobs to be had in a state with nearly 2 million unemployed and an unemployment rate predicted by the UCLA Anderson Forecast to stay in the double digits through most of 2013.

“Many of us represent counties where unemployment is double digit. Los Angeles County is over 11 percent,” said Assemblywoman Holly Mitchell, a Los Angeles Democrat who chairs the lower house’s Health and Human Services budget subcommittee. “Where are these jobs?”

The work requirements vary depending on the parent‘s situation. The weekly hours for a two-parent household are 35. For a single parent, 30 hours. And for a single parent with children under 6, 20 hours.

If current work participation levels continue, a large percentage of parents will lose state aid in 2015.

PPIC’s May 2012 study found 27 percent of CalWORKs families were working. Those who were working logged an average of 22 hours each week. Seven percent of all families were working between 20 and 29 hours weekly and 8 percent, 30 or more hours.      

The budget that was adopted differs sharply from Brown’s January proposal, laid out on Page 116 of his summary, which would have reduced CalWORKs spending by nearly $ 1 billion.

Mitchell describes the final deal as “the lesser among a multitude of evils.”

Brown initially proposed placing those families that didn’t meet work requirements after two years into a “Child Maintenance” program that would have lowered the maximum grant for a family of three to less than $400.

Lawmakers rejected the idea.

Brown would have imposed the new rules on current CalWORKs parents. Lawmakers made the program prospective.

The Leg
islature also gave counties the power to offer extensions beyond the 24-month cut-off to up to 20 percent of CalWORKs parents to help them complete their educational training or find a job.

Extensions can be based on several factors including high unemployment in the area, participation in a still uncompleted treatment or vocational program or overcoming a learning disability.

“The budget package is a hybrid that tries to be conscious of both goals of CalWORKs—encouraging employment while ensuring a basic level of subsistence for families in the state,” said Mark Newton, who supervises health and human services issues for the Legislative Analyst’s Office.

“So, as with the governor’s January budget proposal, there are elements designed to promote work. But relative to the governor’s January proposal, there are less severe reductions in assistance to those who likely need the most support to become self-sufficient.”