BILL ANALYSIS Ó SB 23 Page 1 Date of Hearing: August 19, 2015 ASSEMBLY COMMITTEE ON APPROPRIATIONS Jimmy Gomez, Chair SB 23 (Mitchell) - As Introduced December 1, 2014 ----------------------------------------------------------------- |Policy |Human Services |Vote:|5 - 2 | |Committee: | | | | | | | | | | | | | | |-------------+-------------------------------+-----+-------------| | | | | | | | | | | | | | | | |-------------+-------------------------------+-----+-------------| | | | | | | | | | | | | | | | ----------------------------------------------------------------- Urgency: No State Mandated Local Program: YesReimbursable: Yes SUMMARY: This bill repeals the maximum family grant (MFG) or "family cap" rule under the California Work Opportunity and Responsibility to Kids (CalWORKs) program. Specifically, this bill: SB 23 Page 2 1)Repeals the MFG rule and expressly prohibits denial of aid or denial of an increase in the maximum aid payment to a CalWORKs applicant or recipient due to a child being born into the applicant's or recipient's family while the family is receiving CalWORKs aid. 2)Prohibits requiring an applicant or recipient of CalWORKs aid to do any of the following as a condition of eligibility: a) Divulge that any member of the assistance unit is a victim of rape or incest. b) Share confidential medical records related to any member of the assistance unit's rape or incest. c) Use contraception, choose a particular method of contraception, or divulge the method of contraception that any member of the assistance unit uses. 1)Specifies that any increased benefit payment resulting from this bill will occur after January 1, 2016, and a CalWORKs applicant or recipient will not be entitled to a retroactive benefit payment increase as a result of the repeal of the MFG. FISCAL EFFECT: 1)Increase in CalWORKs grant costs in the range of $188 million to $220 million (GF) annually based on data from county consortia indicating 13.3 percent of all children in CalWORKs households (134,900 children) are currently impacted by the MFG rule. 2)Potential future additional CalWORKs grant costs of $3.5 million to $4.1 million (GF) for every 2,500 children born into CalWORKs families each year who otherwise would have been subject to the MFG rule, with annual costs cumulatively increasing in subsequent years. 3)Potential reduction in CalFresh benefits (Federal Funds) for a SB 23 Page 3 percentage of families due to the increase in CalWORKs grant levels under the repeal of the MFG rule. While many families may not experience a reduction due to their limited or lack of income, for every 10 percent of families that are impacted, CalFresh benefits could decline by up to $5.6 million to $6.6 million annually. 4)Ongoing potential cost savings in averted administrative hearings related to challenges to MFG determinations. At an estimated cost of $1,025 per hearing, elimination of 250 hearings per year would result in cost savings of over $250,000 (GF) per year. 5)Potential minor offset to CalWORKs grant cost increases due to child support payments considered countable income in lieu of being provided to the CalWORKs family under the MFG rule. 6)One-time costs (GF), likely significant, for automation changes necessary to implement eligibility changes. COMMENTS: 1)Purpose. According to the author, in explaining the need for this bill as it pertains to the health of California's families, "As states have realized the long term health consequences of denying services to infants, there has been a movement to repeal MFG policies. California must protect the health of children born into extreme poverty and repeal this draconian and ineffective rule. The MFG rule has not led to changes in birthrates among poor women, but has resulted in women being forced to make desperate decisions that endanger the health and safety of themselves and their children." This bill seeks to repeal the MFG rule not only because it has been proven ineffective, but also because of the adverse effects it has on families in poverty and the dignity of women in general. SB 23 Page 4 2)Background. Existing law establishes guidelines for determining a family's maximum aid payment under the CalWORKs program, including all eligible family members, as well as the level of aid to be paid. Existing law, under the maximum family grant (MFG) rule, prohibits, with some exceptions, an increase in CalWORKs aid based on an increase in the number of needy persons in a family due to the birth of a child, if the family has received aid continuously for the 10 months prior to the birth of the child. The current MFG rule, which denies aid ($128 per month on average) was adopted as part of the 1994-95 state budget agreement after it was rejected by the voters in 1992. It has not been amended since its original enactment. The original legislation was based on the belief that increasing welfare grants for children born into AFDC families may provide an incentive for families to have additional children to increase their monthly grant. By limiting the grant amount, policy makers believed families would be dissuaded from having additional children and therefore reduce the amount of "intergenerational" poverty. More recent studies have since debunked the belief that increasing welfare grants encourages parents to have additional children. Beginning in the early 1990s, 24 states implemented family cap rules. Today, just 16 states still have family cap rules in place, including California. In 2002 and 2003, Maryland and Illinois repealed their policies and were followed by Wyoming, Nebraska, Oklahoma, Kansas, Maryland, and Minnesota. This is the fourth attempt to repeal the MFG rule in California since 2007. 3)Arguments in Support. This bill has a wide range of supporters. The arguments for repealing the MFG rule range from documenting the misguided notion that denying aid dissuades families from having children, to exposing the effects of poverty and deep poverty on children, to outrage SB 23 Page 5 regarding the personal indignity experienced by women confronted with an antiquated rule that requires them to expose extremely personal, and sometimes traumatic, information based on stereotypical and discriminatory thinking regarding women on aid. While the near-term costs of eliminating the MFG rule are significant, more broadly, the long-term effects of its repeal are unknown but could significantly reduce the costs of the projected lifetime physical, mental, and social impacts related to children raised in poverty and the long-term economic and societal effects linked to this policy. 4)Prior Legislation. a) SB 899 (Mitchell) 2014, was nearly identical to this bill. It was held in the Senate Appropriations committee. b) AB 271 (Mitchell) 2013, was substantially similar to this bill. It was held in the Senate Appropriations committee. c) AB 833 (Yamada) 2011, would have eliminated the family cap exclusion, as of January 1, 2012, for any child with a disability under the federal Individuals with Disabilities Education Act (IDEA). It died in the Assembly Human Services Committee. d) AB 22 (Lieber) 2007, was substantially similar to this bill. It was held in the Assembly Appropriations committee. e) AB 473 (Brulte) Chapter 196, Statutes of 1994, created California's maximum family grant (MFG) rule and required California to obtain a federal waiver to implement it. SB 23 Page 6 Analysis Prepared by:Jennifer Swenson / APPR. / (916) 319-2081