BILL ANALYSIS                                                                                                                                                                                                    



          SENATE COMMITTEE ON APPROPRIATIONS
                             Senator Ricardo Lara, Chair
                            2015 - 2016  Regular  Session

          SB 1373 (Stone) - CalWORKs:  welfare-to-work:  supportive  
          services
          
           ----------------------------------------------------------------- 
          |                                                                 |
          |                                                                 |
          |                                                                 |
           ----------------------------------------------------------------- 
          |--------------------------------+--------------------------------|
          |                                |                                |
          |Version:  March 31, 2016        |Policy Vote:  HUMAN S. 4 - 0    |
          |                                |                                |
          |--------------------------------+--------------------------------|
          |                                |                                |
          |Urgency:  No                    |Mandate:  Yes                   |
          |                                |                                |
          |--------------------------------+--------------------------------|
          |                                |                                |
          |Hearing Date:  April 18, 2016   |Consultant:  Jolie Onodera      |
          |                                |                                |
           ----------------------------------------------------------------- 


          This bill meets the criteria for referral to the Suspense File.




          Bill  
          Summary:  SB 1373 would require a standard allowance of $100 per  
          month for transportation costs to be advanced to CalWORKs  
          welfare-to-work (WTW) participants at the beginning of each  
          month, as specified. This bill would additionally require a  
          standard allowance of $500 for books and supplies to  
          participants assigned to an educational activity full time, and  
          would require the standard allowance to be adjusted annually for  
          inflation, as specified.  


          Fiscal  
          Impact:  
            Transportation standard allowance  :  Major ongoing increase in  
            CalWORKs supportive services expenditures in the tens of  
            millions of dollars annually from the CalWORKs Single  
            Allocation (Federal Funds/General Fund) for transportation  
            costs, based on the difference between the $100 monthly  






          SB 1373 (Stone)                                        Page 1 of  
          ?
          
          
            standard allowance and the average monthly transportation cost  
            of $87 for 66,000 current participants, as well as an  
            estimated increase in the current utilization rate of 57  
            percent under advance payment in lieu of reimbursement for  
            these costs. To the extent the Single Allocation would not  
            have been fully expended, the costs imposed by this bill would  
            be funded by a combination of unspent federal TANF funds that  
            otherwise would have been reallocated and carried forward to  
            future years, and unspent funds that would have reverted to  
            the General Fund. Any costs expended above the Single  
            Allocation would be borne entirely by the General Fund.  
            Book/supplies standard allowance  :  Future ongoing increase in  
            CalWORKs supportive services expenditures for the specified  
            ancillary services in the millions of dollars annually from  
            the CalWORKs Single Allocation (Federal Funds/General Fund).  
            While the average cost of books and supplies is estimated to  
            be comparable to the proposed standard allowance, to the  
            extent the requirement to provide a standard allowance in  
            advance results in greater utilization (current rate is less  
            than 12 percent) of this supportive service currently serving  
            15,000 participants than through the existing reimbursement  
            process, could result in additional increases in expenditures.
            Annual adjustment by the California CPI  :  Ongoing future  
            annual increases potentially in the millions of dollars. As  
            drafted, it is unclear whether the annual adjustment is to be  
            applied only to the standard allowance for books/supplies or  
            additionally to the transportation allowance. For context, a 2  
            percent adjustment on the existing transportation standard  
            allowance of $100 would increase costs at the current  
            utilization rate by nearly $1.6 million.
            CalWORKs program impact  :  Potential reduction in sanction  
            rates and improvement in work participation rates to the  
            extent the provision of necessary supportive services are made  
            available and provided timely to a greater number of CalWORKs  
            WTW participants.  
            County administration  :  Potentially significant increase in  
            county administration costs, potentially state-reimbursable  
            (General Fund) to the extent the mandate imposed on counties  
            to provide advance payment to all participants, irrespective  
            of need, as well as to allow participants to choose the method  
            of submitting reimbursement claims results in additional  
            workload, resource needs, and changes to existing  
            reimbursement claim processes. As there is currently no  
            statewide standard for accepting, processing, and issuing  
            advance payments, the administrative impact to each county  
            could vary widely.    






          SB 1373 (Stone)                                        Page 2 of  
          ?
          
          


          Background:  Existing state law establishes the California Work Opportunity  
          and Responsibility to Kids (CalWORKs) program to provide cash  
          assistance and other social services to low-income families  
          through the federal Temporary Assistance for Needy Families  
          (TANF) program. CalWORKs program costs are funded through a  
          combination of federal TANF block grant funds, state, and county  
          funds. 
          Under existing law, necessary supportive services are required  
          to be made available to participants engaged in welfare-to-work  
          activities, including transportation costs and ancillary  
          expenses, which include the cost of books, tools, clothing  
          specifically required for the job, fees, and other necessary  
          costs, as provided in the welfare-to-work plan entered into  
          between the county and the participant. (WIC   
          11323.2(a)(2)-(3).)


          Existing law requires payments for supportive services to be  
          advanced to a participant wherever necessary, and when desired  
          by the participant, so the participant need not use his or her  
          own funds to pay for these services. (WIC  11323.4(a).)




          Proposed  
          Law:  This bill would require a county to provide a standard  
          allowance of $100 per month for transportation costs to be  
          advanced to CalWORKs welfare-to-work participants at the  
          beginning of each month. Additionally, this bill:
           Allows a participant to opt out of the standard allowance for  
            transportation costs at any time and make a reimbursement  
            claim for the actual costs of transportation, and may submit  
            this claim to the county by mail, in person, or if the county  
            already has the technological capacity to do so, via the  
            county's internet website.


           Requires a participant who has been assigned to an educational  
            activity full time, as defined by the postsecondary school, to  
            receive a standard allowance of $500 per semester for  
            ancillary expenses. For participants assigned to educational  
            activities part time, as defined by the secondary school, the  
            bill requires a standard allowance of $250 per semester to the  






          SB 1373 (Stone)                                        Page 3 of  
          ?
          
          
            participant.


           Requires the ancillary expenses standard allowance to be paid  
            no later than 15 days before the start of the semester to  
            ensure the participant has the funds necessary to purchase  
            books and supplies required by the educational institution.


           Allows a participant to opt out of the standard allowance for  
            books and supplies at any time and make a reimbursement claim  
            for the actual costs of books and supplies, and may submit the  
            claim to the county by mail, in person, or, if the county  
            already has the technological capacity to do so, via the  
            county's internet website.


           Requires the standard allowance to be adjusted annually for  
            inflation by the California Consumer Price Index.


           Authorizes the Department of Social Services (DSS) to  
            implement the provisions of the bill through an all-county  
            letter or similar instructions, and requires the letter or  
            instruction to be issued no later than April 1, 2017.




          Staff  
          Comments:  By advancing a standard allowance for transportation  
          costs and for ancillary services to CalWORKs WTW participants  
          assigned to educational activities, as well as adjusting the  
          standard allowances annually for inflation, this bill could  
          result in significant increases in CalWORKs employment services  
          expenditures in the tens of millions of dollars annually. Within  
          the Single Allocation, counties have the discretion to expend  
          funds as they deem necessary to best meet the needs of their  
          CalWORKs participants and are not required to spend a specified  
          amount for services, child care and administration. 
          To the extent the Single Allocation would not have been fully  
          expended under the provisions of this bill, the additional costs  
          imposed by this bill would be funded by a combination of unspent  
          federal TANF funds that otherwise would have been reallocated  
          and carried forward to future years, and a portion would be  
          funded with unspent funds that would have reverted to the  






          SB 1373 (Stone)                                        Page 4 of  
          ?
          
          
          General Fund. Alternatively, to the extent counties fully expend  
          their allocations, any additional costs would be borne by the  
          General Fund.  


          CalWORKs employment services are administered locally by county  
          welfare departments and funded through the CalWORKs Single  
          Allocation. The Quarterly CalWORKs Report, State Fiscal Year  
          2015-16, July-September, released in March 2016, indicates the  
          Single Allocation for FY 2015-16 of $2.02 billion. CalWORKs  
          employment services serve individuals in the CalWORKs WTW  
          program, and include a variety of work, educational, and  
          training activities, including the transportation and ancillary  
          services addressed in this measure. Based on prior fiscal year  
          4th quarter data from Quarterly CalWORKs Reports, unspent funds  
          from the Single Allocation ranged from $286 million in FY  
          2013-14 to $679 million in FY 2014-15. 


          There is currently no specified process mandated on counties for  
          accepting, processing, and issuing advance payments for  
          supportive services. Additionally, the number of participants  
          that request advance payment and the amount of advance payments  
          issued to participants is not tracked. By requiring counties to  
          provide advance payment to all participants, irrespective of  
          need, within specified time periods, as well as requiring  
          counties to allow participants to choose the method of  
          submitting reimbursement for claims, this bill could potentially  
          result in significant increases in county administration costs,  
          which are potentially state-reimbursable (General Fund), for  
          additional workload and/or resources or other operational needs  
          to accommodate changes to existing reimbursement claim  
          processes. As there is currently no statewide standard for the  
          processing of these payments, the administrative impact to each  
          county could vary widely.    


          Recommended amendments:  As drafted, it is unclear whether the  
          bill requires the annual adjustment for inflation based on the  
          California CPI to apply solely to the standard allowance for  
          books and supplies, or if the annual adjustment is to be applied  
          to the standard allowance for transportation costs as well.  
          Staff recommends clarifying language to clearly identify to  
          which standard allowance the CPI is to be applied: ancillary  
          services, transportation costs, or both.







          SB 1373 (Stone)                                        Page 5 of  
          ?
          
          



                                      -- END --