Lawsuit Filed To Block Stage 3 Child Care Cut

October 29, 2010

The scheduled elimination of child care for 55,000 children in low-income working families on Monday, November 1, hinges on the outcome of an 11 a.m. court hearing this morning. The Child Care Law Center and other public interest law groups filed a lawsuit yesterday in Alameda County Superior Court seeking an emergency order to temporarily stop the elimination of “Stage 3” child care, which is scheduled to be terminated due to the Governor’s $256 million line-item veto of Stage 3 funding in the 2010-11 budget. Stage 3 serves families who have transitioned off CalWORKs cash assistance into the workforce, but whose incomes remain sufficiently low that they can’t afford the cost of child care. The lawsuit “seeks an emergency order keeping the funds in place and requiring the state to assist Stage 3 parents in finding other possible sources of child care assistance.”

— Scott Graves

Extreme (Medi-Cal) Makeover

October 26, 2010

There’s no question the Affordable Care Act, the new federal health reform law, will transform California’s – and the nation’s – health care system. And a big part of the transformation will occur in the Medicaid Program, known as Medi-Cal in California.

Medi-Cal, which has humbly provided health coverage to millions of low-income children, seniors, and persons with disabilities for 45 years, is due for a makeover. In a new CBP report, we project that by 2019, Medi-Cal coverage could climb to as high as 10.5 million under the new health law. In contrast, the program currently serves more than 7 million individuals, with approximately 500,000 more Californians eligible, but not enrolled. This significant expansion of Medi-Cal eligibility, and likely enrollment of millions of previously uninsured Californians, offers new opportunities.

First, we estimate that generous federal funding will allow California to draw down nearly $30 in federal funds for each state dollar it invests in coverage for newly eligible adults between 2014 and 2019. Thus, for an extraordinarily modest investment, the state could potentially provide more than a million Californians with comprehensive health coverage.

Second, the new health law declares that any person with an income below 138 percent of the federal poverty line is eligible, which makes it easier for certain individuals to enroll and stay enrolled in Medi-Cal. California Health and Human Services Secretary Kim Belshe said last week that Medi-Cal will be a program “grounded in covering people,” and federal officials are urging a new “triple-E” mantra – “Eligibility Equals Enrollment.”

The transformation of Medi-Cal couldn’t come at a better time. As recent Census data have shown, the share of nonelderly Californians with job-based coverage has declined significantly since the beginning of the decade. Soon, Medi-Cal may help to fill that gap.

– Hanh Kim Quach

Going Nowhere Fast

October 22, 2010

California’s job market is right back where it was at the end of last year. Today’s employment report shows that the total number of jobs in the state fell to 13,808,500 in September. That means California had about 1,000 fewer jobs last month than it did in December 2009, when the state’s employment appeared to have bottomed out. In other words, the nearly 100,000 jobs California gained during the first five months of this year are now gone.

What’s going on? As we described in a blog about national employment trends last week, public sector job losses have wiped out a large share of private sector job gains. Today’s data show that this trend is far more pronounced in California than in the US as a whole. Since December, California has gained 29,200 private sector jobs and lost 30,300 public sector jobs – essentially a wash. In contrast, the nation as a whole has lost one public sector job for every three private sector jobs gained.

The overwhelming majority of California’s public sector job losses this year – 97 percent – were local government jobs. Given sharp job losses in September – the first month of the school year for many districts – it’s likely that many of the jobs lost were in public schools, which are included as part of the local government sector for the purposes of employment data collection. Local government job losses have been far deeper in California than in the rest of the US. While the state is home to about 12 percent of all local government jobs nationwide, nearly three out of 10 of the nation’s local government job losses throughout the recession (29.1 percent) were jobs lost in California.

— Alissa Anderson

Impact of Child Care Cuts Will Continue Long After Governor Leaves Office

October 20, 2010

The Governor’s elimination of funding for CalWORKs “Stage 3” child care will continue to affect low-income families long after he leaves office in January 2011. Ending Stage 3 effective November 1, 2010 will affect not only the 55,000 kids who are currently in the program, but also another 32,000 kids who receive “Stage 2” child care assistance and would otherwise move to Stage 3 over the next year and a half. Families may remain in Stage 2 for up to two years after leaving CalWORKs cash assistance, at which point they may transfer to Stage 3. With no Stage 3, however, those children will literally have nowhere to go. The California Department of Education estimates that more than 1,500 children will reach the two-year Stage 2 time limit this month, with a similar number of kids hitting the time limit every month thereafter. In total, 14,500 children will reach their Stage 2 time limit during the remainder of 2010-11, and another 17,700 will reach the limit between July 2011 and May 2012, the last month for which estimates are available.

In short, an estimated 87,000 children will lose their child care by mid-2012 unless the Legislature and the next Governor find a way to bring Stage 3 child care back to life.

— Scott Graves

New Income Data Show Even More Uneven Gains

October 18, 2010

At first glance, it appears that Californians as a whole are far wealthier today than they were two decades ago. The total adjusted gross income (AGI) of all California taxpayers rose by nearly $300 billion on an inflation-adjusted basis over the past two decades – a gain that is roughly equivalent to the gross domestic product of Argentina today. But, as we’ve blogged about before, most of that additional income has flowed to a small sliver of wealthy Californians. New Franchise Tax Board data that we recently received enabled us to extend our analysis of income gains back to 1987 – six years earlier than our previous analysis. These new data show that of the nearly $300 billion increase in total AGI  between 1987 and 2008:

  • 40 percent of the gains went to the wealthiest 1 percent of California taxpayers;
  • More than 70 percent of the gains went to the wealthiest 10 percent of taxpayers;
  • Just 16 percent of the gains went to the bottom 80 percent of Californians; and
  • Only about 3 percent of the gains went to the middle fifth.

As income has flowed to the top:

  • The wealthiest 1 percent of California taxpayers increased their share of total AGI from 13.0 percent in 1987 to 20.9 percent in 2008;
  • The top 10 percent of taxpayers increased their share from 37.0 percent to 47.0 percent; and
  • The share of total AGI going Californians in each of the bottom four fifths of the income distribution declined.

In other words, as California’s income pie has expanded, most Californians have received even smaller slices of the pie.

— Alissa Anderson