BILL ANALYSIS
Senate Appropriations Committee Fiscal Summary
Senator Christine Kehoe, Chair
1058 (Beall)
Hearing Date: 08/12/2010 Amended: 08/17/2009
Consultant: Jacqueline Wong-HernandezPolicy Vote: Human
Services 3-2
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BILL SUMMARY: AB 1058 excludes the value of a motor vehicle from
consideration when determining or redetermining CalWORKs
eligibility. This bill deletes existing requirements on counties
for assessing the value of a motor vehicle for the purposes of
CalWORKs eligibility.
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Fiscal Impact (in thousands)
Major Provisions 2009-10 2010-11
2011-12 Fund
Increased CalWORKs caseload* $1,547 $3,964
$4,045 General
Federal
Increased Medi-Cal caseload $25-100 $50-200
$50-200 General
Federal
Reduces county verification duties Potentially substantial
savings; General
***Likely savings in
future of more than $1 million annually***
*Includes projected increase in cash grants, child care, case
management services, and case administration.
**Depends upon the degree to which this population is already
served by the Medically Needy program, for which almost all are
likely eligible.
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STAFF COMMENTS: SUSPENSE FILE.
This bill will incur state costs by removing an eligibility
requirement for CalWORKS, which will result in an increase of
CalWORKs cases and cash grants. This bill will also save money
over time by substantially reducing the duties of county
eligibility workers. Both the potential costs and potential
savings to the state hinge on the deletion of the "Vehicle Asset
Test" as a condition of CalWORKs eligibility.
Existing law imposes limits on the amount of income and
(personal and real) property an individual or family may possess
in order to be eligible for aid under the CalWORKs program,
including that assets shall not exceed the following: (a) $2,000
in savings and $3,000 for a family with a member age 60 or
above; (b) one residence that the family lives in, and (c) one
car with a fair-market value of $4,650. Existing law requires
county welfare departments to verify that families do not exceed
these asset limits (as well as meeting other eligibility
requirements) both when they initially apply for CalWORKs and
every six months while they receive CalWORKs assistance (a
process known as "redetermination") to verify continued
eligibility.
This bill would remove a motor vehicle's value from the
conditions of eligibility, while leaving the other asset
requirements intact.
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AB 1058 (Beall)
The cost of the likely increase in CalWORKs cases cannot be
known with certainty, because the data is limited and the actual
increase and grant amounts rely on multiple factors. The
Department of Social Services (DSS) estimates that approximately
12,000 CalWORKs applications are denied annually because the
family's resources exceed the asset ceiling for the program.
This number does not represent the number of families that would
become newly eligible under this bill because the available
statewide information is not sufficiently disaggregated to
account for:
The number of distinct applicants. The DSS estimate
counts all denied applications, including applications
filed by the same families after being previously denied.
Families specifically denied for owning a vehicle worth
more than $4,650. The estimate includes all excess
resources, including savings of more than $2,000. The
estimate also includes families who were denied for both
possessing excess resources and one or more additional
disqualifiers.
In Los Angeles County, between March and June 2009, an average
of 8 families per month were denied CalWORKs benefits solely for
exceeding the vehicle asset limit, which represents about .1% of
the 6,600-6,800 total CalWORKs applications denied monthly in
that county. Since Los Angeles County comprises approximately
1/3 of the total CalWORKs cases in California, it is likely that
approximately 288 families annually will be newly eligible for
Cal WORKs under the provisions of this bill.*
Because an entire family is excluded from CalWORKs cash aid if
it is determined to have excess resources, the exact cost of
adding 288 new families to CalWORKs is unknown. Cash grants are
determined by the size of the family and, to a lesser degree of
variation, the county in which the family resides. The average
CalWORKs cash grant is $521 per month, but there is considerable
variation. For example, the maximum cash grant for a family of 3
people is $694 per month. The estimates in the "Fiscal Impact"
section are calculated using the $521 average grant. Real costs
may be higher or lower depending on the size of the 288 newly
eligible families. The estimates also include the assumption
that in the absence of the vehicle asset test, a small number of
families will remain eligible for CalWORKs who would have
otherwise been denied during their six-month redetermination of
eligibility.
This bill may incur additional state costs to the degree that
the Medi-Cal caseload is increased as a result. Existing law
links Medi-Cal income and asset eligibility to CalWORKs
eligibility, providing that Medi-Cal asset ceilings can be no
more restrictive
than CalWORKs.
*It is possible that more families with motor vehicles worth
more than $4,650 will apply for CalWORKs than have previously
because of the recent increase in unemployment. Families that,
in the past few years, had the income to be able to afford a
more expensive car may have lost those income sources, and be
applying for CalWORKs. That number is unknown, but it should be
noted that CalWORKs applications are increasing and have
increased significantly in the past year.
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AB 1058 (Beall)
By removing the vehicle asset test for CalWORKs, it is also
removed for Medi-Cal, which could result in newly eligible
Medi-Cal recipients. The increase, however, is mitigated by the
likelihood that the state is already providing medical coverage
to at least some of the newly eligible individuals under the
Medically Needy program. Individuals in the Medically Needy
program do not receive cash assistance through CalWORKs, but
meet other low-income thresholds and/or other specified
requirements under federal law. While most of the individuals in
families that would become newly eligible for CalWORKs aid, are
likely eligible to be covered by this program, including
virtually all of the children. The extent to which they are
enrolled and accessing services in the Medically Needy program,
however, is unknown. Participation in Medi-Cal for those who are
eligible is much higher because the applying to Medi-Cal occurs
at the same time as the CalWORKs application.
This bill is likely to produce substantial long term savings,
but only minor savings initially. DSS estimates that a county
eligibility worker (who is responsible for determining a
family's new and continued eligibility for participation in
CalWORKs) spends about 15-30 minutes per case determining the
value of a vehicle. The scope of this task varies by county,
largely because some counties use computers and others use an
actual Kelley Blue Book to review the specifications of a
vehicle that determines its value. This process, in either form,
takes a substantial amount of time considering that it must be
completed for every CalWORKs case both during initial
determination and every six months after. (Redetermination is
likely much less time consuming to the degree that the family
has the same vehicle).
Counties receive a single allocation to administer their
CalWORKs programs. Currently, this work is underfunded, and
counties have sustained hundreds of millions of dollars in cuts
over the past several years. While this bill will save time* and
reduce workload for county eligibility workers, the only way the
state will achieve actually savings is to reduce further a
county's single allocation. This action is both unlikely and
imprudent considering ongoing reductions. Currently, some
counties are suspending their welfare-to-work programming due to
excessive reductions.
This bill will, however, potentially result in substantial
future and indirect savings. The aggregate amount of time saved
by eligibility workers will be substantial and could result in
fewer new eligibility workers being hired in the future, even as
the population increases. County savings could also be
redirected to increasing welfare-to-work programs, which have
been the most impacted by budget reductions, to increase
employment of CalWORKs recipients and move them off of aid more
quickly. Currently, because of a combination of budget
reductions and an increase of CalWORKs applications, some
counties have reassigned welfare-to-work program staff to do
eligibility determination work. Even in the short term, this
bill could sufficiently reduce the workload to allow these
employees to return to providing employment services.
*At a cost of about $60 per hour, saving 15 minutes of time per
CalWORKs case during redetermination and the initial application
would result in a theoretical savings of more than $5,000,000
annually. If counties were funded for the increase in caseload
and reduced the approximately $5,000,000, there would be an
annual net savings of more than $1,000,000 each year.