BILL ANALYSIS                                                                                                                                                                                                    Ó



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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