The End of CalWORKs?

The rumors were true. Governor Schwarzenegger’s May Revision proposed “absolutely terrible cuts,” including the wholesale elimination of the CalWORKs Program, which provides very modest cash assistance to 1.4 million low-income Californians, including 1.1 million children, and helps families move toward self-sufficiency. The maximum monthly CalWORKs grant for a family of three – $694 – equals 45.5 percent of the federal poverty line and is the exact amount that families received in 1989-90, without adjusting for inflation. For many families, a CalWORKs check is a rent check; by helping families keep a roof over their heads, CalWORKs helps keeps children in stable homes and in school, and off the streets.

CalWORKs also provides a critical link to job training, education, and a range of services for low-income parents, helping them overcome barriers to employment and move into the workforce. The CalWORKs caseload is 40 percent smaller today than in the mid-1990s because hundreds of thousands of parents have successfully made this transition from welfare to work. In brief, CalWORKs has succeeded as the Legislature and Republican Governor Pete Wilson intended when they created the program in 1997.

If the Governor’s idea sounds familiar, it should. He made the same proposal last year and revived it in January as a so-called “trigger” cut that would occur unless the state received an unrealistic level of new federal funding. That proposal went nowhere in the Legislature, but the Governor has decided to take another swing at it, making the elimination of CalWORKs a cornerstone of his May Revision. Ending CalWORKs as of October 1, 2010 would reduce state General Fund spending by $1.2 billion in 2010-11. This cut amounts to 6.3 percent of the $19.1 billion in “solutions” proposed in the Governor’s May Revision, even though CalWORKs spending makes up only about 3 percent of the state budget. So the state would “save” $1.2 billion in 2010-11 – with annual state “savings” of about $1.5 billion per year thereafter – but at what cost? The Governor’s proposal would:

  • Eliminate monthly cash assistance for more than 560,000 of the state’s poorest families, sharply reducing these families’ incomes even as jobs remain scarce and likely pushing many families into homelessness. The number of families receiving CalWORKs cash assistance has increased by more than 100,000 since the economic downturn began in California in July 2007, and the Governor’s proposal would pull the rug out from under these families as they struggle to make ends meet. As CBP board member Will Lightbourne argued last year, ending CalWORKs would lead to the “complete destitution” of more than 1 million California children – a condition “that civilized states do not allow even the most troubled and troubling of its members to endure.”
  • Cause California to lose billions in federal funding every year. The state would lose three-quarters ($2.8 billion) of its annual Temporary Assistance for Needy Families (TANF) block grant in 2010-11 and would lose its entire $3.7 billion annual TANF block grant every year thereafter. California also could lose more than $500 million in additional federal funds to help offset state spending for CalWORKs in 2010-11. These additional federal funds could come from the temporary TANF Emergency Contingency Fund, which Congress created last year and may extend through September 30, 2011. We have no doubt that other states would gladly accept these federal funds if California decided to turn them down and become the only state in the nation without a TANF cash assistance program. To sum up: California’s families and local communities would lose at least $2.8 billion, and possibly more than $3.3 billion, in services and purchasing power in 2010-11 so that the state can save $1.2 billion. That’s bad news for struggling local economies.
  • Shift a significant amount of costs to counties. Counties are the safety-net provider of last resort under state law. Many families who lose CalWORKs cash assistance would become eligible for General Assistance (GA), which is solely funded by counties. But GA is time-limited in months, not years, and is designed to support single adults – the average monthly benefit was just $218 in February 2010 – not families with children.
  • Shift costs to other parts of the state budget. A sizeable fraction of the estimated state “savings” generated by eliminating CalWORKs would be offset by additional costs to Child Welfare Services, Foster Care, and other programs that would see caseload increases as hundreds of thousands of families struggle to survive in the absence of the basic support and services provided by the CalWORKs Program.

Ending basic assistance to more than 1 million California children and desperately needed services for their parents is not an option that policymakers should be contemplating. Instead, legislators and the Governor should maintain the original bipartisan commitment to provide a strong work incentive, a broad range of work-related activities, including education and training, and child care and other services to help families continue on the path to self-sufficiency.

— Scott Graves

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n the Docket: Proposed Elimination of Child Care Assistance and CalWORKs

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