BILL ANALYSIS Ó
AB 1809
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Date of Hearing: April 27, 2016
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Lorena Gonzalez, Chair
AB
1809 (Lopez) - As Amended April 6, 2016
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Urgency: No State Mandated Local Program: YesReimbursable:
Yes
SUMMARY:
This bill eliminates the asset limit test as a requirement for
California Work Opportunity and Responsibility to Kids
(CalWORKs) program eligibility and participation.
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FISCAL EFFECT:
1)Increased CalWORKs grants, services, child care, and
administrative costs potentially in the millions of dollars
(TANF/MOE) for increased CalWORKs caseload, both new as well
as existing cases that would have otherwise become ineligible.
To the extent the CalWORKs budget exceeds available TANF/MOE
funds, any increased costs above the base MOE requirement
would be funded with General Fund. For a caseload increase of
520 cases, the estimated total costs would be $3.1 million
($0.2 million GF) in FY 2016-17 and $6.3 million ($0.4 million
GF) in FY 2017-18 and on-going.
2)Potential savings due to reduced county administrative
workload. It is estimated that a county eligibility worker
spends approximately 30 minutes per case on average
determining the value of a family's assets. The scope of this
task varies by county, but this process takes a substantial
amount of time because it must be completed for every CalWORKs
case. Counties receive a single allocation to administer their
CalWORKs programs. While this bill will save time and reduce
workload for county eligibility workers, the state will only
achieve actual savings if a county's single allocation is
further reduced. This action is unlikely given that this work
is currently underfunded and county welfare departments have
sustained hundreds of millions of dollars in cuts over the
past several years.
3)Potentially substantial future and indirect savings. The
aggregate amount of time saved by eligibility workers will be
substantial. This bill could sufficiently reduce county
workload to allow these employees to be redirected to
providing employment services, resulting in transitioning
recipients to work more quickly, thereby potentially reducing
grant costs and time on aid, resulting in significant future
CalWORKs cost savings.
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COMMENTS:
1)Purpose. The primary goal of the CalWORKs program is to move
families out of poverty toward self-sufficiency. In the early
1980s, social welfare policy shifted towards the elimination
of wealth accumulation while on public assistance. However,
in the last decade, there has been increased attention given
to the role that asset development plays in facilitating the
improved economic security of low-income individuals and their
families. Asset limits in public assistance have been
associated with low savings rates among low-income families,
which may hinder families seeking to transition off of public
assistance. According to the author, "This bill gives families
a meaningful and more realistic financial foundation needed
for survival within CalWORKs, and better ensures economic
mobility after they leave CalWORKs."
2)Background. The California Work Opportunity and
Responsibility to Kids (CalWORKs) program provides monthly
income assistance and employment-related services aimed at
moving children out of poverty and helping families meet basic
needs. Federal funding for CalWORKs comes from the Temporary
Assistance for Needy Families (TANF) block grant. The average
2015-16 monthly cash grant for a family of three on CalWORKs
(one parent and two children) is $506.55, and the maximum
monthly grant amount for a family of three, if the family has
no other income and lives in a high-cost county, is $704.
According to recent data from the California Department of
Social Services, over 497,000 families rely on CalWORKs,
including over one million children. Nearly 60% of cases
include children under 6 years old.
3)California Asset Rules. CalWORKs asset rules were enacted in
1997 when the state implemented the 1996 federal welfare
reform act. Under California's asset test for CalWORKs,
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families are limited in the value of assets or resources they
may own. The program incorporates federal food stamp rules,
which limits resources to $2,250 per household, or $3,250 if a
family has a member who is aged or disabled. Some assets, such
as the family's home are excluded from consideration in the
determination of a family's resources. A family's vehicle, if
they have one, can have a value of no more than $9,500. Also
excluded are assets that are not available to a household,
such as the cash value of life insurance policies and pension
funds.
4)Prior legislation.
a) AB 197 (Stone), 2013, AB 2352 (Hernández), 2012, and AB
1182 (Hernández), 2011, were all virtually identical to
this bill. AB 197 was held in the Assembly Appropriations
Committee, AB 2352 was held in the Senate Appropriations
Committee and AB 1182 was vetoed by the Governor.
b) AB 1058 (Beall), 2009, would have deleted the
requirement that county welfare departments assess the
value of a vehicle when determining a CalWORKs' application
or recertification. That bill was held on the Senate
Appropriations Committee Suspense File.
c) AB 2368 (Fuentes), 2008, would have exempted motor
vehicles from assets that must be considered by county
welfare departments when they are determining a family's
eligibility for CalWORKs. That bill was held on the Senate
Appropriations Committee Suspense File.
d) AB 167 (Bass), 2007, would have repealed the asset test
for CalWORKs eligibility if a household contained a member
who is aged or has a disability. That bill was held in the
Senate Appropriations Committee.
Analysis Prepared by:Jennifer Swenson / APPR. / (916) 319-2081
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