BILL ANALYSIS Ó
AJR 35
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Date of Hearing: May 18, 2016
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Lorena Gonzalez, Chair
AJR
35 (Brown) - As Introduced March 17, 2016
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|Policy |Human Services |Vote:|6 - 0 |
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Urgency: No State Mandated Local Program: NoReimbursable: No
SUMMARY:
This measure requests the federal government to change its
policy in order to allow California to equitably end the
Supplemental Nutrition Assistance Program (SNAP) cash-out
policy, administered through the SSI/SSP programs, in such a way
as to maximize benefits and participation while at the same time
mitigating or eliminating harm to low income families and
approximately 60,000 medically needy children who would
otherwise lose benefits.
FISCAL EFFECT:
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1)Ongoing costs of approximately $135 million (federal funds)
for increased CalFresh benefits to the approximately one
million individuals who would become eligible for CalFresh
benefits by the elimination of the cash-out policy.
2)Unknown potential savings to the State due to a reduction in
SSP benefits to 1.3 million SSI/SSP recipients.
3)Unknown costs/savings (federal funds) associated with the
approximately 300,000 SSI/SSP recipients in mixed households
where there would be a simultaneous gain in eligibility and
potential loss of CalFresh benefits within the household due
to the loss of the SSI/SSP income disregard.
COMMENTS:
1)Purpose. According to the author, "The Federal SNAP, known as
CalFresh in our state, supports millions of low-income
Californians. Unfortunately, 1.3 million SSI/SSP recipients
are ineligible for CalFresh benefits because of a policy known
as 'cash-out.' This policy, which only impacts California,
started in 1974 when the federal government began the combined
federal-state SSI/SSP program. A $10 food-stamp benefit was
traded for a $10 cash benefit due to the extreme
administrative costs of delivering the $10 food stamp benefit.
This policy made sense in the mid 1970's, but today, it is
hurting our poor vulnerable populations because the $10 cash
benefit has been decimated by decades of budget and fiscal
changes. While ending the program would solve this problem,
doing so without a change to federal policy would reduce
benefits for approximately 58,000 medically dependent
children. A federal change would allow California to provide
CalFresh benefits to SSI/SSP recipients and maintain the
current benefits for medically dependent children."
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2)Background. California's cash-out policy started in 1974 when
the federal government began the combined SSI/SSP program. At
that time, states were allowed to increase their SSP instead
of administering food stamps to SSI/SSP recipients. California
opted for the "cash-out" policy which allowed California to
cash out SNAP benefits to SSI/SSP recipients by including the
estimated values of SNAP benefits, approximately $10 per month
in California at the time, within SSI/SSP benefits, thereby
reducing administrative and other expenditures. However, this
tradeoff also prevented SSI/SSP recipients in California from
being eligible for SNAP. California remains the only state
with a cash-out policy still in place.
Over time, the criteria for maintaining the cash-out program
have changed. Instead of the inclusion of a discrete, or
"extra" $10 for food purchases in the SSP, California's
cash-out policy is now based on the state's implementation of
federal cost-of-living adjustments (COLA) to the federal SSI
benefit. Passing through the federal COLA to SSI/SSP
recipients in California allows SSI/SSP grants to remain at
the minimum level allowed under federal law for individuals
and couples, thereby allowing the state to maintain its
federal Medicaid funding.
3)Tradeoffs. Today, 1.3 million SSI/SSP recipients in California
are ineligible for SNAP (CalFresh) due to the cash-out policy.
About 80% of these SSI/SSP recipients in California (primarily
live-alone seniors) would, on average, be eligible for more
CalFresh benefits than the $10 monthly bump they receive in
SSP. They would see a net benefit from California's
elimination of the cash-out policy because they stand to gain
higher levels of food assistance by becoming eligible for
CalFresh.
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However, at the same time, maintaining the cash-out policy has
direct benefits for families where only one person or a
portion of the household receives SSI/SSP (usually a disabled
adult or child, or elderly household member) but the rest of
the family is eligible for CalFresh or other benefits. This
is because in these "mixed" households the SSI/SSP income is
not counted when determining the household's CalFresh
eligibility and level of benefits. These households could see
their nutrition assistance reduced or eliminated if the
SSI/SSP income is now counted for purposes of determining
household CalFresh eligibility and benefit levels.
Currently, according to the author, it is estimated that
approximately 60,000 medically needy children in mixed
households may be detrimentally impacted by ending the state's
cash-out policy.
4)Past Efforts. In the early 1990's, USDA rejected two separate
proposals from California to end cash-out without taking
benefits sway from "mixed-status" households - i.e. households
in which some members receive SSI/SSP and some do not. USDA
raised both policy and legal questions regarding the suggested
approaches.
This resolution requests the federal government to change
federal policy in order to allow California to equitably end
the SNAP cash-out policy in a way that avoids harm to families
that would lose benefits from should the cash-out policy end.
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Analysis Prepared by:Jennifer Swenson / APPR. / (916)
319-2081