BILL ANALYSIS Senate Appropriations Committee Fiscal Summary Senator Christine Kehoe, Chair 510 (Evans) Hearing Date: 07/13/2009 Amended: 04/02/2009 Consultant: Jacqueline Wong-HernandezPolicy Vote: Human Services 3-2 _________________________________________________________________ ____ BILL SUMMARY: AB 510 provides that, as of January 1, 2009, any month in which CalWORKs program participants are excused from participation in welfare to work activities because the necessary supportive services are unavailable due to insufficient funding in the CalWORKs program will not be counted as a month of receipt of aid, as specified. _________________________________________________________________ ____ Fiscal Impact (in thousands) Major Provisions 2009-10 2010-11 2011-12 Fund Extends CalWORKs time limit Unknown; likely millions of dollars General in certain circumstances _________________________________________________________________ ____ STAFF COMMENTS: This bill meets the criteria for referral to the Suspense File. This bill stops the 60-month lifetime limit for an adult to receive CalWORKs cash aid in any month when a county has granted CalWORKs recipients a "good cause" exemption from participating in CalWORKs activities, because the county cannot provide the necessary job or child care service. This bill would increase the length of time those adults could ultimately continue to receive cash aid. CalWORKs provides cash grants and welfare-to-work services to families whose incomes are not adequate to meet their basic needs. A family is eligible for the one-parent component of the program if it includes a child who is financially needy due to the death, incapacity, or continued absence of one or both parents. A family is eligible for the two-parent component if it includes a child who is financially needy due to the unemployment of one or both parents. In 2009-2010, it is estimated that 1 million people per month, including children, will be served by the CalWORKs program. CalWORKs was created by the state in response to the 1996 Personal Responsibility and Work Opportunity Reconciliation Act (PRWORA), which required states to develop new programs that encouraged families to move toward self sufficiency through education, training, and work experience. Additionally, the federal law implemented a 60-month (lifetime) time limit for families receiving aid. In California, the 60-month time limit only applies to adults who are removed from the caseload. The children remain in the safety-net program for as long as their families are income-eligible. Adults in the CalWORKs caseload must meet an hourly participation requirement each week. For single parents the weekly participation requirement is 32 hours. For two-parent families the requirement is 35 hours per week. The participation hours can be met through unsubsidized employment, subsidized employment, certain types of training and education related to work, and job search (for a limited time period). Page 2 AB 510 (Evans) Existing law allows counties to exempt individual CalWORKs recipients from meeting the participation requirements for "good cause". Most commonly, this exemption is granted for illness, disability, age, of some limitation on the individual to participate. Under current law, the state provides a single allocation to county welfare departments with funding to cover CalWORKs employment services costs, child care costs, and the cost for the counties to administer the program. Within that single allocation, counties have the discretion to spend their money as they deem necessary to best meet the needs of their CalWORKs participants. Counties are not required to spend a set amount of money for services, child care and administration. Cash aid to families is not part of the single allocation. The counties' single allocation funding has been cut in the state budget over the past several years, and counties must provide services with less money, or cut services. In a January 2009 letter, the California State Association of Counties and County Welfare Director's Association (CWDA) advised DSS that counties will, on a case-by-case basis, be granting voluntary "good cause" for non-participation to recipients for whom the necessary supportive services cannot be provided. This authority is allowable under current law. By suspending employment services, the counties will likely save tens of millions of dollars over the course of a year. However, the counties can suspend services and grant "good cause" exemptions from participation under current law. The 60-month time limit would still continue without this legislation. Because the savings can be achieved with existing county authority absent this bill, this bill would uniquely incur expenses to the state by allowing an adult an additional month of CalWORKs eligibility for every months of "good cause" exemption due to county services cuts. Most of these costs would likely be incurred in future years, because these months are added to the end of the time limits. This extension applies only to the adult portion of a family's aid (since children are not part of the 60 month time limit), and would likely cost the state $139,000 per month (in the future) for every 1,000 cases that fall into this exemption category. Currently, 830,000 families receive CalWORKs aid and services. If just 1% were exempted for 3 months, the state could eventually pay more than $3.5 million. This assumes that those adults would stay on the caseload for the full 60-months and require additional months. The precarious budget situation and California economy may force counties to suspend their employment services activities for many months, and allow them to grant "good cause" exemptions for the duration of the cuts they have sustained. Thus, the total expense to the state for any exemptions pursuant to this legislation is unknown, but will likely be substantial.