BILL ANALYSIS �
AB 373
Page 1
Date of Hearing: April 26, 2011
ASSEMBLY COMMITTEE ON HUMAN SERVICES
Jim Beall Jr., Chair
AB 373 (Garrick) - As Amended: March 31, 2011
SUBJECT : CalWORKs: time on aid
SUMMARY : Reduces the number of months, from 48 to 24, that a
California Work Opportunity and Responsibility to Kids program
(CalWORKs) recipient can remain on aid, and makes related
conforming changes.
EXISTING LAW :
1)Establishes, under federal law, the Temporary Assistance for
Needy Families (TANF) program to provide cash grants to
eligible persons as part of a welfare-to-work program.
(PRWORA) (Public Law 104-193)
2)Establishes, under state law, CalWORKs (the state name for
TANF) to provide eligible persons cash assistance and
employment services. AB 1542 (Thompson, Maddy, Ducheny,
Ashburn) Chapter 270, Statutes of 1997.
FISCAL EFFECT : Unknown
COMMENTS : The author introduced this because he believes that
some CalWORKs recipients are not accountable to work
requirements, the state spends too much on aid, and that the aid
should go to those who are legitimately needy. In his own
words, he states:
The CalWORKs program offers those who are eligible
some of the nation's most generous welfare payments.
Even with an 8% grant reduction implementation on June
1, 2011, California still ranks within the top 10 for
states with the highest cash aid benefits. With
little accountability, some aid has been going to
those who are doing little to become self-sufficient.
According to the most recent data, only 25% of
CalWORKs participants receiving cash payments are
meeting the federal government's work requirements.
California must ensure that our limited funds are
reserved for those who are truly in need and used for
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the right purpose; to help needy families achieve
self-sufficiency. The legislature is forced to make
decisions that may cause hardship for some families in
the short-term, but by targeting aid to those in need
and demanding accountability, this program can help
those we are trying to get back to work and provide
for their families.
This bill would reduce a family's maximum allowable time on
CalWORKs aid from 48 to 24 months.
Background on TANF and CalWORKS
Welfare was reformed in 1996 at the federal level. Under the
Personal Responsibility and Work Opportunity Reconciliation Act
the Aid to Families with Dependent Children (AFDC) was replaced
with the Temporary Assistance for Needy Families program (TANF)
and ended "welfare as we know it." California calls its program
CalWORKS.
This reform meant the program went from an open-ended
entitlement to a block grant that provided states with a fixed
amount of funding and required the state to match the block
grant through a Maintenance of Effort level of funding. In
general, TANF sets a maximum of five years that a family could
receive cash assistance and employment services and set a
minimum number of hours that a family must work in order to
remain eligible in the program.
TANF gave states extensive flexibility over program eligibility
and ongoing requirements. CalWORKs has set eligibility
requirements, cash grant levels, work participation levels and
exemptions from these requirements, time limits, and sanctions.
For example, California recently chose to reduce the number of
months a family can stay on CalWORKs from 60 to 48 months,
limits the value of an applicant and recipient's vehicle to
$4,650, and requires that an applicant or recipient's cash on
hand be no more than $2,000.
The County Welfare Directors' Association (CWDA) indicates that
CalWORKs is a successful model for increasing work and
self-sufficiency, while maintaining a safety-net for low-income
children. More than 400,000 families across the state (almost
half the caseload) have left aid and become self-sufficient
since welfare reform began in 1997. More adults on aid are
working, and they are earning more under CalWORKs, than under
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the old AFDC program. Today, due to the prolonged economic
decline and 12% unemployment rate in California, CalWORKs'
current caseload as of December 2010 is just over 590,000
households.
Summary of federal and state work rules and sanctions
Under federal law, with few exceptions, recipients must work as
soon as they are job-ready or no later than two years after
coming on assistance in order to count toward the state's Work
Participation Rate (WPR). Federal work requirements call for
single parents to participate in work activities for an average
of 30 hours per week, or an average of 20 hours per week if they
have a child under age six. Two-parent families must
participate in work activities for an average of 35 hours a week
or, if they receive federal child care assistance, 55 hours a
week. California currently requires more hours of participation
from a CalWORKs household with one parent (32 hours). Work
activities that count toward a state's participation rates
include:
unsubsidized or subsidized employment;
work experience;
on-the-job training;
job search and job readiness assistance;
community service;
vocational educational training - not to exceed 12
months;
job skills training related to work;
education directly related to employment;
satisfactory secondary school attendance; and,
providing child care services to community volunteers.
Federal work participation rate
Each year, states submit to the federal government case-level
data on participation in TANF work activities and requires
states to meet two separate minimum work participation
requirements; one for All Families and another for Two-Parent
Families receiving TANF. Due to the recent economic downturn,
the reasons stated above, and changes to the WPR calculation
rules, California has failed to meet the All Families Rate for
the past two periods that it was measured, 2007 and 2008.
The County Welfare Directors Association point out that the WPR,
because it is a point-in-time measure, does not provide an
accurate picture of program engagement. For example, the WPR is
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an all-or-nothing measure that does not give states any credit
for part-time employment. If someone works for just one hour
less than the requirement, the state gets zero credit for them.
As well, just because a client is not participating in a given
month does not mean they are disengaged. For example, they
could be between jobs, employed part time, participating in
activities that the federal government does not recognize,
exempt from participation, or waiting for a training program to
begin.
The most recent cuts to CalWORKs
On March 24, 2011, Governor Jerry Brown signed Senate Bill 72
(Committee on Budget and Fiscal Review), Chapter 8, Statutes of
2011, the human services budget trailer bill enacting several
deep cuts to vital human services programs. These cuts will
negatively impact the ability of low-income families to meet
basic needs and result in long-term detrimental impacts on a
million of our state's most vulnerable children. These included:
1)Reduction in lifetime limit on aid
CalWORKs eligibility for adult household members is reduced
from 60 months to 48 months. For a household of three with one
parent, this new limit will result in an additional cut in the
maximum benefit of $122 per month after the 48th month. The
months are counted retroactive starting with January 1, 1998.
2)Cut to Maximum Grant
An 8% benefit cut to all CalWORKs households, the largest in at
least 25 years. This will reduce the Maximum Grant for a
household of three from $694 to $638. This cut brings the
Maximum Grant to below 1984 levels, and reduces the Average
Grant for the same size family from $509 to $468 a month.
3)Additional cuts to Safety-Net and Child-Only families
a) 5% when they reach the 61st cumulative month on aid.
b) 10% when they reach the 73rd cumulative month on aid.
c) 15% when they reach the 85th cumulative month on aid.
The months are counted retroactively to January 1, 1998.
Grants for two-children cases will be cut by 8% reducing
the Maximum Grant from $565 a month to $520. The
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additional grant cuts outlined above are taken from the
lower amount listed. For example, cases at month 85 will
have their grants reduced to $442.
4)Reduction in Earned Income Disregard
Reduces the Earned Income Disregard from $225 to $112, which
studies have shown reduces the incentive to work because the
reduction does not allow families to keep as much as their
earned income.
5)Reduction in county administrative funding
Cuts, again, the County Single Allocation (CSA) by $426 million
for 2011-12. Counties report that cumulatively their CSA,
which is used to pay for such things as employment services
and has been reduced by over $1.2 billion since 2001. The
effect is less support to assist families overcome barriers to
work such as employment training, job search, domestic
violence services, psychiatric evaluations, alcohol and drug
treatment services, transportation reimbursement, and case
management from eligibility workers. All services that are
critical to removing barriers to employment for CalWORKs
parents that face these challenges.
6)Temporary suspension of CalLearn
Suspends for one year supportive services for teenage parents
and includes these young mothers in the CalWORKs program.
This change has the effect delaying eligibility until their
third trimester, well beyond the time when critical pre-natal
vitamins and care are needed.
Human Services as economic stimulus
Studies have shown that expenditures on human services
programs, such as CalWORKs, stimulate the economy and
relieve cost pressure on other state-funded programs such
as foster care, corrections, and homelessness.
In an April 2009 report, Human Services In a Time of
Crisis: An examination of California's safety-net programs
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and related economic benefits for communities , the authors
cited a report from Beacon Economics that found that human
services provide a 32% boost to the economy. This economic
"multiplier" effect is possible because of the activity
generated by every dollar spent by low-income families is
likely to be spent quickly.
The report also highlighted that the long-term effects of
reduced and delayed human services is costly to the state.
These costs are borne through the consequences of poverty,
child maltreatment, homelessness, domestic violence, and
substance abuse. The report notes that "a group of 117
economists that span the ideological spectrum state that
steep budget cuts will? only exacerbate an economic
downturn."
Analysis
The author of this bill suggests that the state has a low WPR
and proposes to eliminate two years of eligibility for CalWORKs
recipients. Beyond the state's current 25% WPR lies a larger
story, however. This rate is an unfortunate misrepresentation
of how many recipients are working. Earlier it was mentioned
that the federal rules do not recognize any hours of work by
recipients unless they reach the federal minimums. This type of
measurement disguises the true work participation rate of
CalWORKs recipients. As noted by CWDA, there are many reasons
that the rate is low.
Studies
According to the Center on Budget and Policy Priorities
(CBBP), time limits are often determined arbitrarily-some
families simply need more time to make the transition into
employment. CBBP cites many studies that highlight the
barriers that face these families in obtaining employment.
Barriers such as lack of employment history and persistent
personal and family challenges such as a severe mental
health diagnosis or chemical dependency all present serious
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challenges from moving from welfare-to-work.
Opposition
The Western Center on Law & Poverty points out in a lengthy
opposition letter that adopting a 24-month time limit ignores
many blatant realities facing the state and the low-income
families that live here, such as:
The lack of available jobs in a down economy has a
direct impact on the ability of a recipient to obtain and
retain a job and leave assistance entirely.
A 24-month time limit will reduce the family well below
40% the federal poverty level.
Cutting families off from aid at 24 months will prevent
some from completing a certificate degree which will
prevent them from achieving their educational and
employment goals.
A business school researcher at UC Berkeley has found
that the current time limit of 48 months will result in a
22%-50% increase in infant mortality.
An Illinois study found that welfare sanctions and
benefit decreases are associated with higher
hospitalization rates in young children.
CalWORKs has been a fiscal success for this state.
Before welfare reform in 1997, the state spent $3.7 billion
on AFDC but today it spends almost a billion dollars less.
REGISTERED SUPPORT / OPPOSITION :
Support
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None on file.
Opposition
California State Association of Counties (CSAC)
California Immigrant Policy Center (CIPC)
Coalition of California Welfare Rights Organizations (CCWRO)
Legal Services for Prisoners with Children (LSPC)
Western Center on Law & Poverty
California Coalition for Women Prisoners (CCWP)
Analysis Prepared by : Frances Chacon / HUM. S. / (916)
319-2089