After Years of Deep Cuts, an Increase in the CalWORKs Grant Deserves Serious Consideration

June 3, 2013

Today, members of the California Legislature will meet in Budget Conference Committee to continue resolving differences between the Senate and Assembly’s versions of the 2013-14 state budget. One important item up for discussion is the size of monthly grants for families in the CalWORKs Program, which provides cash assistance to low-income families along with welfare-to-work services to help parents find jobs and overcome barriers to employment.

The Senate and the Brown Administration have proposed keeping the CalWORKs grant frozen at its current level, while the Assembly has proposed a phased-in increase that would raise the maximum grant to 50 percent of the federal poverty line over a five-year period, starting with a 12 percent increase January 1, 2014.

After years of steady decline in the purchasing power of the CalWORKs grant, followed by sharp cuts to the grant in recent years, the $638 maximum aid payment for a family of three is currently equal to about 39 percent of the poverty line, well below the “deep poverty” cutoff of 50 percent. To put things in perspective, today’s cash grant is roughly the same, in actual dollars, as the maximum grant in 1987. The critical difference is that back then, the value of that dollar amount was equal to about 80 percent of the poverty line — or double the percentage today.

The Assembly proposal to increase the CalWORKs grant acknowledges the fact that California is facing a serious poverty problem. This problem came into sharp focus last year when the Census Bureau released state rankings under the new Supplemental Poverty Measure, which compares families’ resources to the cost of housing and other necessities. California was perched at the top of the list, with 23.5 percent of residents living in poverty. Even under the official poverty measure — the basis for the federal poverty line — about one in six Californians, and nearly one in four California children, are living in poverty. (For a family of three, this means an annual income below $19,530.)

The fact that so many of the state’s children experience this daily hardship is deeply troubling in and of itself. But child poverty’s effects extend far beyond individual households. Since children who grow up in poverty are likely to have lower earnings, less education, and poorer health as adults, poverty affects all Californians who care about a strong workforce and a robust tax base for the state.

Augmenting the CalWORKs grant would help address poverty in California by lifting the household income of CalWORKs participants, who make up a large share of the state’s low-income families. Such an increase would directly benefit the more than 1 million children in CalWORKs households. Depending on how the change is implemented, the 12 percent increase in the CalWORKs grant that the Assembly proposes for 2013-14 could bring the maximum grant for a family of three from its current $638 level up to about $714 a month — still below where it was 10 years ago. This change, though modest, would be a step in the right direction after years of repeated cuts to the CalWORKs grant.

— Hope Richardson

Conference Report Cuts Deeply Into Core Programs for Vulnerable Californians

March 4, 2011

On March 3, the 10-member Budget Conference Committee approved a package of “solutions” aimed closing the state’s $26.6 billion budget shortfall on a party-line basis. The $27.7 billion in “solutions” – roughly divided between spending reductions and revenues – would leave the state with a $1.1 billion reserve. Actions taken at the Committee’s final session deepened cuts to CalWORKs, child care, and Medi-Cal. The Committee also approved the Governor’s proposed phase-out of redevelopment. The Committee had previously voted to support the Governor’s revenue proposals, including extension of the 2009 temporary tax measures, elimination of Enterprise Zones, and mandatory single sales factor apportionment.

An updated CBP side-by-side  summarizes the final actions based on the best available information. In many instances, such as changes to child-only grants for children whose parents have “timed off” CalWORKs, critically important bill language documenting how additional reductions will be made, is not yet available. Similarly, details of the proposed realignment of program responsibility from the state to counties are not yet available.

Among the additional reductions to core health and human services programs enacted Thursday are:

  • An 8 percent reduction to CalWORKs’ cash assistance payments, rather than the 5 percent reduction proposed in the Senate and Assembly budgets.
  • Cuts to child-only grants provided to children totaling $100 million. As noted above, the policy changes that will be used to achieve these savings are not publicly available.
  • “Soft” caps on the number of physician visits covered in the Medi-Cal Program. The adopted proposal would limit visits to seven per year, unless additional visits are certified by a physician. The Governor had initially proposed a 10 visit per year “hard” cap, a proposal that was rejected by both houses of the Legislature.
  • Elimination of the refundable portion of the state’s child care tax credit. The non-refundable portion of the credit would be retained. This proposal affects low-, but not higher-income, families with child care expenses.
  • A reduction of up to 10 percent in the State Reimbursement Rate for child care programs and a 10 percent across-the-board increase in the fees charged to families in state-supported child care programs.

The Assembly Budget Committee has posted a preliminary report summarizing actions taken by the Conference Committee. The Conference Report assumes voters approve temporary taxes at a June special election and that the Legislature approves elimination of ineffective corporate tax breaks. Additional solutions will be needed to close the gap left by failure of any of the proposed revenue measures.

— Jean Ross

Conference Committee Here We Come

February 22, 2011

The Senate and Assembly Budget Committees have completed their reviews of the Governor’s Proposed 2011-12 Budget. Both Committees largely adopted the Governor’s proposals, in some instances on a party line vote. The Senate’s version of the budget includes $12.7 billion of expenditure reductions, $12.0 billion of revenues, and $3.0 billion of “other solutions.” The Assembly’s version includes the same level of expenditure reductions and revenues, but a lower level ($2.2 billion) of “other solutions” leading to a smaller reserve.

The two-house conference committee of lawmakers will meet to resolve differences between the two versions of the budget, with a mid-March target date for completing work on a framework for a 2011-12 spending plan and measures that would be submitted to the voters for approval in June extending temporary taxes first imposed in February 2009 and providing a structure for shifting responsibility for a range of programs from the state to county government.

The CBP will publish a side-by-side comparison of major differences between the various versions of the budget later this week.

— Jean Ross


On the Docket: Conference Committee and Other Budget News

August 2, 2010

Activity is picking up now that the Legislature is back in session following their July recess. The Budget Conference Committee – the two-house committee that reconciles differences in the Assembly and Senate versions of the budget – is scheduled to meet tomorrow (Tuesday) from 10 a.m. to noon, and again from 2 p.m. to 4 p.m. in Room 4203 of the State Capitol. The committee is also scheduled to meet Wednesday upon adjournment of the Senate Health Committee. At some point in these two days, the committee is expected to take up the human services “open items”  including proposed cuts to the CalWORKs and IHSS programs. As always, you can follow the hearings on The California Channel or through the Senate and Assembly websites.

According to press reports, Democratic legislative leaders are expected to unveil details of a budget proposal in a press conference tomorrow. Last week we blogged about the problems with a potential tax plan that would lower the state sales tax while raising the income tax on low- and middle-, but not higher-income, earners.

Has the plan changed since then? Like you, we’ll be waiting to see.

— Lisa Gardiner

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Conference Committee Begins Search for Balance

June 4, 2010

The Legislature’s Budget Conference Committee held their first public meeting this morning. Legislative Analyst Mac Taylor provided a big-picture overview of the economy, revenues, and spending as well as a helpful comparison of the Assembly, Senate, and May Revision budget plans. Conference Committee Chair Denise Moreno Ducheny announced that the committee will reconvene on Monday to begin reconciling the Assembly and Senate versions of the 2010-11 budget. The committee will take up transportation, resources, and general government issues on Monday, followed by public safety and possibly human services issues on Tuesday, health on Wednesday, and education on Thursday.

— Scott Graves

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