BILL ANALYSIS Ó
AB 1584
Page 1
GOVERNOR'S VETO
AB
1584 (Brown)
As Enrolled August 30, 2016
2/3 vote
--------------------------------------------------------------------
|ASSEMBLY: |76-0 |(June 2, 2016) |SENATE: |38-0 |(August 18, |
| | | | | |2016) |
| | | | | | |
| | | | | | |
--------------------------------------------------------------------
--------------------------------------------------------------------
|ASSEMBLY: |79-0 |(August 23, | | | |
| | |2016) | | | |
| | | | | | |
| | | | | | |
--------------------------------------------------------------------
Original Committee Reference: HUM. S.
SUMMARY: Reinstates, as of January 1, 2018, the cost-of-living
adjustment (COLA) for the State Supplementary Program for the
Aged, Blind and Disabled (SSP).
AB 1584
Page 2
The Senate amendments:
1)Delay the reinstatement of the SSP COLA to January 1, 2018.
2)Reinsert language, found in current law, requiring the
pass-along of federal benefits, as specified, to be effective
on January 1 of each calendar year.
3)Delete provisions indexing, in 2017 and 2018, the maximum
Supplemental Security Income (SSI)/SSP aid payments to
specified percentages of the federal poverty level.
4)Make technical amendments.
EXISTING LAW:
1)Establishes the State Supplementary Program for Aged, Blind
and Disabled, which is intended to supplement SSI and provide
persons whose need results from age, blindness or disability
with assistance and services that help them meet basic needs
and maintain or increase independence. (Welfare and
Institutions Code Section (WIC) 12000 et seq.)
2)Provides that eligibility requirements for SSP match federal
SSI criteria, and requires a minimum level of SSP benefits to
be provided in order to maintain federal Medicaid funding, as
specified. (WIC 12000 et seq.)
3)Defines the California Necessities Index (CNI) to be the
weighted average of changes for food, clothing, fuel,
AB 1584
Page 3
utilities, rent, and transportation for low-income consumers,
and specifies the methods with which the computation of annual
adjustments to the CNI shall be made. (WIC 12201)
4)Requires annual adjustments, based on the CNI, to SSI/SSP
payment schedules to reflect increases or decreases in the
cost of living, as specified, but further stipulates that such
adjustments shall not be made, unless otherwise required by
statute, for the 2011 calendar year and each calendar year
thereafter. (WIC 12201)
FISCAL EFFECT: According to the Senate Appropriations Committee
on August 11, 2016, this bill could result in estimated costs to
the Department of Social Services (DSS) of $75 million to $100
million for fiscal year 2017-18 and ongoing costs of $150-200
million per year to apply a COLA to the SSI/SSP grant. These
estimates assume the COLA would raise the grant by a CNI of
3.62%.
COMMENTS:
SSI/SSP: The SSI/SSP program provides a monthly cash benefit to
needy aged, blind, and disabled individuals and couples to help
them pay for basic living expenses, such as food, clothing and
shelter. In order to be eligible for SSI/SSP, an individual
must be 65 years of age or older, blind, or have disabilities
(children who are blind or have disabilities can qualify), and
must meet certain federal income and resource requirements. The
SSI portion of the benefit is federally-funded and only provided
through an approved application to the Social Security
Administration (SSA), while the SSP portion is paid for with
General Fund dollars, and a qualified SSI recipient is
automatically qualified for SSP. The SSI portion of the grant
is meant to provide an income floor for qualifying low-income
individuals and couples.
AB 1584
Page 4
SSI/SSP grants are adjusted based on whether a recipient is
aged, blind or disabled, the individual's or couple's living
arrangement, a recipient's marital status, and a recipient's
status as a minor. The current SSI/SSP maximum grant levels are
$889.40 per month for an individual ($156.40 SSP) and $1,496 per
month for couples ($396.20 SSP), which places individuals at 90%
of poverty and couples at 112% of poverty based on federal
guidelines. The estimated SSI/SSP caseload for 2016-17 is 1.31
million cases (including 1.51 million people), which is
comprised of 28% aged persons, 1% blind persons and 71% persons
with disabilities. Over 81% of SSI/SSP cases are individual
cases.
The SSA applies an annual COLA to the SSI portion of the grant
pursuant to annual increases in the Consumer Price Index (CPI).
This federal COLA is passed through to SSI/SSP recipients in
California, which 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. During the state's economic downturn, the SSI/SSP
program was one of many safety net programs negatively impacted.
The COLA California once applied to the SSP amount was made
inoperative as part of the 2009-10 Budget Act.
The 2016-17 State Budget included a one-time cost-of-living
increase to the SSP on January 1, 2017, that is equal to the
CNI, estimated to be 2.76%.
Need for this bill: In a March 2015 Joint Hearing of the
Assembly Committee on Aging and Long Term Care and the Assembly
Committee on Human Services titled Who Can Afford to Get Old?
Senior Poverty in the Golden State, numerous aged individuals
and individuals with disabilities provided public comment about
the financial hardship they and people they know were facing
AB 1584
Page 5
due, in part, to the low SSI/SSP grant amount, which is the sole
source of income for many of them. In addition to pointing out
how the SSI/SSP grant amount has not kept up with inflation,
many members of the public spoke about how too many aged
individuals and individuals with disabilities had to make tough
decisions about which expenses they were going to be able to pay
each month, understanding that their SSI/SSP grant amounts
weren't high enough to meet even their most basic needs. More
specifically, a presentation prepared for the hearing by the
California Budget & Policy Center revealed that the current Fair
Market Rent for a studio apartment exceeds the maximum SSI/SSP
grant level for an individual in 15 counties, and exceeds 50% of
the maximum SSI/SSP grant for an individual in all 58 counties.
The California Elder Economic Security Index (EESI) is a
county-specific measure of the minimum income necessary to cover
basic expenses for people age 65 years and older. Factoring in
housing, food, health care, and transportation costs, the EESI
illustrates the shortcomings of the current SSI/SSP grant amount
for seniors. According to the EESI, a single renter living
alone in a one-bedroom apartment in Kern County needs $1,565
per month to pay for basic expenses, which increases to $2,193
needed for a couple renting that same apartment. In San Diego
County, the amount needed is $2,031 for a single elderly renter
and $2,629 for a couple. The minimum income is even higher in
Alameda County at $2,170 for a single elderly renter and $2,888
for a couple. By reinstating the COLA in order to increase the
monthly SSI/SSP grant amount, the author of this bill seeks to
eventually better align the income of individuals who are unable
to work with the actual costs of their needs.
According to the author, "Aged, Blind and disabled Californians
need our help. Eye-watering recession-era cuts to the SSI/SSP
program plunged over 1 million Californians into poverty, and
their only way 'out' is through the actions of the Governor and
the Legislature. There is no 'Do-Over' for SSI/SSP recipients
AB 1584
Page 6
whom due to age, blindness or disability are unable to enter the
work-force, or re-train to acquire new skills. They are at the
mercy of state policy. [This bill] advances a first-step toward
total restoration of recession era cuts. By increasing the
state portion of the SSI/SSP grant, California's eligible aged,
blind and disabled adults will have financial resources to
manage California's unusually high costs of living, while
stimulating needed economic activity in communities hit hardest
by the recession."
PRIOR LEGISLATION:
AB 474 (Brown) of 2015, would have, beginning with the 2015-16
fiscal year, required the state maximum SSP grant to be annually
adjusted such that the maximum SSI/SSP combined payment would
have equaled 112% of the federal poverty level. It died in the
Assembly Budget Committee pursuant to the Constitution Article
IV, Section 10(c).
GOVERNOR'S VETO MESSAGE:
I am returning the following five bills without my signature:
Assembly Bill 492
Assembly Bill 885
Assembly Bill 1584
Assembly Bill 1770
AB 1584
Page 7
Assembly Bill 1838
Each of these bills make changes to a worthy program that
results in increased funding, a few of which received increases
in this year's budget. These bills are an end run of the budget
process, and would commit us to spending an additional $240
million every year.
The budget process allows for all spending proposals to be
weighed equally through public hearings, negotiations and,
finally, approval of a balanced budget. This is the best way to
evaluate and prioritize all new spending proposals, including
those that increase the cost of existing programs. This process
is even more important when the state's budget is precariously
balanced.
The budget process begins again on January 10, 2017, which is
the appropriate time to discuss these proposals.
Analysis Prepared by:
Daphne Hunt / HUM. S. / (916) 319-2089 FN:
0005095
AB 1584
Page 8