BILL ANALYSIS Ó
SENATE COMMITTEE ON APPROPRIATIONS
Senator Ricardo Lara, Chair
2015 - 2016 Regular Session
SB 1373 (Stone) - CalWORKs: welfare-to-work: supportive
services
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|Version: March 31, 2016 |Policy Vote: HUMAN S. 4 - 0 |
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|Urgency: No |Mandate: Yes |
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|Hearing Date: April 18, 2016 |Consultant: Jolie Onodera |
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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
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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.
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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
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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
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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.
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