BILL ANALYSIS
AB 1098
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Date of Hearing: May 12, 1999
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Carole Migden, Chairwoman
AB 1098 (Romero) - As Introduced: February 25, 1999
Policy Committee: Labor and
Employment Vote: 6-3
Urgency: No State Mandated Local
Program:NoReimbursable:
SUMMARY :
This bill establishes the Communities First! Jobs Program within
the Employment Development Department (EDD) for the purpose of
creating 10,000 public service jobs. Specifically, this bill:
1)Requires the Director of the Communities First! Jobs Program
to seek and consider proposals from state or local public
agencies to operate Communities First! Jobs projects, with
approval or denial of projects based on specified criteria.
2)Requires the employing agency to (a) provide the program
worker with a job that is comparable to the work of the
agency's other employees, (b) assess the worker's skills and
abilities, and (c) ensure the provision of support services in
coordination of county welfare departments and public and
private service providers
3)Requires participants in the program to be members of very low
income households, as defined. At least 50% of the program
workers in each geographic area must be current General
Assistance, California Work Opportunity and Responsibility to
Kids program (CalWORKS), or Supplemental Security Income
recipients or have been recipients within the last three
years.
4)Requires that each program worker receive a full-time job in
the public sector, appropriate on-the-job supervision and
child care, and job search and placement assistance, and be
assigned to a project that is within a reasonable commuting
distance from her/his residence. Each program worker must
receive an hourly wage of $10 per hour, or the prevailing wage
AB 1098
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if higher, benefits similar to those of other employees doing
comparable work, and quality child care for their dependent
children in order to enable them to participate in the
program.
FISCAL EFFECT :
1)Major costs to participating state and local agencies. Based
on the wage, benefit, and child care requirements prescribed
in the bill, these costs could exceed $300 million annually.
2)Major costs for EDD to implement the Communities First! Jobs
Program. EDD estimates its administrative costs would be 5%
of program costs ($15 million), and administrative costs for
employing state and local agencies would be 8% of program
costs ($24 million state and local funds).
3)Some of the costs associated with this bill may be offset by
increases in tax revenues to the state and local governments
(e.g., income taxes paid by program workers), and reductions
in CalWORKS and General Assistance (GA) benefit costs.
4)The cost of health care benefits for program workers is likely
to increase, since they would be moving from Medi-Cal coverage
(50% federally funded, 50% state-funded) to private health
insurance (likely 100% state and local government costs).
COMMENTS :
1) Rationale . According to the author, this bill addresses the
jobs gap in California and recognizes that the state's current
economic growth will fall short in job creation for welfare
recipients and unemployed persons, particularly the
approximately 400,000 entry-level jobs that will be needed for
welfare recipients over the next five years. The sponsor,
the Californians for Justice Education Fund, notes that 2,500
Californians surveyed in low-income areas reported few
available jobs in their neighborhoods, and those jobs
available tending to be low-paying and/or offer no advancement
opportunities. Based on these survey findings and the
experience of prior and current public jobs initiatives, the
sponsor believes this bill is critical for disadvantaged
workers and depressed communities.
2) Prior Legislation . AB 1098 is a scaled-down version of last
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year's AB 2059 (Aroner), which would have established the same
program for the purpose of providing 100,000 public sector
jobs. AB 1098 was held on the Assembly Suspense File.
3) EDD Concerns . EDD indicates that is has the same concerns
with AB 1098 as it did with AB 2059 last year. Specifically:
a) The Communities First! Jobs Program is a departure from
other public service and private sector jobs initiatives
because it subsidizes benefits and child care for workers.
b) Other public service jobs programs, such as those
administered by the state for disaster relief and the Job
Training Partnership Act, pay an hourly wage based on the
prevailing wage for the particular occupation (typically $8
to $14 per hour). The Communities First! Jobs Program must
pay program workers $10 per hour (or the prevailing wage if
higher); this minimum hourly wage would likely distort the
prevailing wage rate of many primarily entry-level jobs,
particularly in rural areas.
c) Under the CalWORKS program, new applicants are limited
to 18 months of job training/education services, and
existing recipients are limited to 24 months. Counties may
extend the 18-month limit by six months if the extension is
likely to lead to nonsubsidized employment or if no jobs
are available. Able-bodied adults must begin community
service employment at the end of these time limits, if the
county certifies that a nonsubsidized job is not available.
EDD believes this bill would undercut this community
service employment requirement of the CalWORKS program.
Analysis Prepared by : Stephen Shea / APPR. / (916) 319-2081