BILL ANALYSIS
AB 2205
Page 1
Date of Hearing: April 19, 2006
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Judy Chu, Chair
AB 2205 (Evans) - As Introduced: February 22, 2006
Policy Committee: Human
ServicesVote:4 - 2
Urgency: No State Mandated Local Program:
Yes Reimbursable: Yes
SUMMARY
This bill requires the Department of Social Services (DSS) to
establish automatic eligibility for food stamp benefits for any
Medi-Cal recipient who receives any services funded by the
Temporary Assistance for Needy Families (TANF) block grant.
Specifically, this bill:
1)Requires DSS to establish a program of categorical eligibility
for food stamps for anyone receiving Medi-Cal services as long
as that individual is receiving services funded by the federal
TANF block grant.
2)Requires that the director of DSS implement the program only
after receiving federal authorization to do so and only if
implementation does not result in a loss of federal financial
participation.
3)Holds counties harmless for any federal food stamp error rate
penalties that may result from this implementation.
FISCAL EFFECT
1)Administrative Costs. Providing categorical eligibility to
families receiving Medi-Cal could cost up to $20 million
annually for administering the additional cases. Of that
amount, 50 percent would be paid by the federal government.
The remaining $10 million would be shared by the state and
counties (70% state and 30% county).
2)Increased Federal Dollars for California. Assuming that 25
percent of the new cases are zero-benefit cases, in exchange
AB 2205
Page 2
for an approximately $7 million state administrative
investment, Californians could receive almost $200 million in
federal food stamp benefits. Further, this bill would allow
the children in these families to be eligible for free school
meals, which are primarily federally funded. Over $30 million
dollars in additional federal funding could flow to the state
to provide these children with free school lunches and
breakfasts. Finally, several million dollars in increased
federal child welfare services funds could be received by the
state.
3)Increased Sales Tax Revenues. In addition to increased
federal funding, the state could expect to receive additional
state GF revenues due to increased sales tax. Studies show
that low income families spend approximately 45 percent of
their income on taxable goods. By providing these families
with food stamps, 45 percent of the money previously used by
the family to purchase food would now be used for taxable
goods. Based on this assumption, the state could expect to
receive up to $5 million in additional sales tax revenue.
4)TANF Impact . In order to be categorically eligible for food
stamps, these new families would need to receive some type of
TANF funded service. This service may be as minimal as
providing families with a brochure that outlines available
TANF employment services. The cost of printing additional
copies of existing publications would be minimal.
COMMENTS
1)Rationale. This bill seeks to remove barriers to low income
families and children for participation in the food stamps and
school meals programs. The bill envisions that Medi-Cal
families currently not receiving food stamps would receive or
have access to a TANF-funded service (such as a brochure
describing available job services). This would trigger
categorical eligibility for food stamps, without the need to
make a new application or meet certain eligibility conditions
that are applied to food stamps but not Medi-Cal, such as the
$2,000 resource limit. According to studies of states that
have adopted this policy, somewhere between 50,000 and 150,000
people (over 70 percent of them children) are likely to
benefit from providing categorical eligibility to Medi -Cal
recipients
AB 2205
Page 3
2)Food Stamp Participation. California remains one of the lowest
states in terms of food stamp participation. Currently over 2
million Californians eligible for food stamp benefits are not
receiving them. Among the reasons cited for this lack of
participation are bureaucratic barriers that make
participation difficult and the rule denying aid to families
with over $2,000 in assets.
3)School Meals Program . School meal programs are also
underutilized. Only half of students receive lunch at school,
and 18% receive school breakfasts. Some low-income children
with incomes between 133% and 185% of the federal poverty
level, currently ineligible for food stamps, may not receive
school meals because their families cannot afford the 40 cents
required for a reduced price lunch and 30 cents for breakfast.
The children in these new food stamps households would now be
eligible for free school meals.
4)Additional Federal Child Welfare Services Funds. The federal
government awards funding to states through the Promoting Safe
and Stable Families (PSSF) program that can be used in the
Child Welfare Services program for efforts to reduce the
incidences of child abuse and neglect, and to promote
stability and permanency for at-risk children within families.
The federal government sets a capped amount for funding and
then awards those funds to states and territories based upon
the number of children in each state who are receiving food
stamps. Despite serving over 25 percent of the national child
welfare caseload, California receives less than 15 percent of
the federal PSSF funds because of the low food stamps
participation rate. To the extent this legislation increases
food stamps participation among families with children, even
those families receiving no benefits, California's share of
the PSSF funding should increase. California would likely
receive several million more dollars in PSSF funding from
implementing categorical eligibility.
5)Zero Benefit Cases . Despite categorical eligibility, the
amount of benefits for which the household would be eligible
would depend on its income. It is possible that some families
would be ineligible for benefits, even though they would have
status as a food stamp household. That status would still
permit qualification for free school meals for the children in
the no benefit cases and would count toward increased federal
PSSF funding. Those cases, however, would also be retained on
AB 2205
Page 4
each county's caseload and incur some minor administrative
costs.
6)Related Legislation. This categorical eligibility option was
contained in the original version of AB 696 (Chu) and passed
the Assembly with that provision. That issue was deleted in
the Senate Appropriations Committee, and the bill, containing
only a repeal of the finger imaging requirement, was vetoed.
In 2002, AB 2415 (Keeley), contained a provision for categorical
eligibility along with the requirement to implement quarterly
reporting in the CalWORKs program. That bill was held in the
Assembly Appropriations Committee because quarterly reporting
was implemented through the budget.
Analysis Prepared by : Julie Salley-Gray / APPR. / (916)
319-2081