Budget primer: CalWorks would be cut by 50 percent

January 25, 2011

By Daniel Weintraub

California’s welfare-to-work program, known as CalWorks, would take a major hit if the budget proposed by Gov. Jerry Brown becomes law.

While the program has long been a symbol of “big government” and even lent its name to what some call the “welfare state,” welfare has changed significantly since the 1990s. It is no longer an open-ended entitlement and its grants have been restructured, reduced and connected to education and job training. The program serves far fewer families today than it did 15 years ago, and spending on welfare has shrunk, in real terms and as a share of the state budget. Today, the CalWorks program accounts for about 3 cents of every dollar spent from the state’s general fund.

But Brown would reduce that spending even further. His cuts would reduce the state’s general fund spending on the program by $1.5 billion, or 50 percent.

The governor has proposed reducing grants by 13 percent, from $694 to $604 for a family of three in high-cost counties. This cut would bring grant levels to about what they were 20 years ago, without even factoring in the impact of rising costs over the past two decades. Counting food stamps, or CalFresh as that program is now known, a family of three in the program would receive assistance equivalent to 71 percent of the federal poverty level, down 5 percent from the current level of aid. The grant reduction, on a percentage basis, would be more than twice as large as any previous cut adopted by California.

That’s not all. Brown also proposes to cap participation in the program at 48 months, rather than the current 60 months. The 48-month limit would be retroactive. And under his plan, all aid would be cut off at that point to most families. Currently, when a family hits the five-year maximum, only the parents’ portion of the grant is eliminated. The children remain on public assistance. That would no longer be the case, except when the parents were still meeting federal work requirements.

The state estimates that about 115,000 families and 234,000 children would lose their aid under this proposal.

Brown also proposes to continue a $377 million reduction in assistance to counties for the cost of job training and child care services for welfare recipients moving into the workforce. Along with this, counties would be allowed to exempt some recipients from job training requirements. The state expects this to result in fewer people moving from welfare into the workforce.

The state’s non-partisan Legislative Analyst has suggested that the grant cut be phased in with two smaller cuts spaced six months apart, and that the state increase funding for subsidized jobs. The analyst also recommends a change in a rule that allows families to keep a share of their earned income without losing welfare benefits. Currently, the first $225 of a family’s income, and 50 percent of every dollar after that, are excluded from calculations to determine eligibility. The analyst suggests excluding 50 percent of income starting from the first dollar. This would reduce grants for about 140,000 families and remove about 5,600 families from the program altogether.

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One Response to Budget primer: CalWorks would be cut by 50 percent

  1. sdillard

    January 26, 2011 at 9:30 am

    Daniel, I work for the CalWORKs program in San Francisco. These proposed changes are long overdue. Most people in California have no idea how CalWORKs actually works. For example, at least 25% of our parents are sanctioned due to willfull refusal to participate in welfare to work activities. Their kids are still aided until they are 18. This means we are using STATE dollars to pay welfare to kids for years; in some cases over 10 years. CalWORKs rules allow recipients (adults) to take a “time out” from the 60 month “clock” every time they are “disabled” or “caring for a sick child”, or if they simply declare, without any proof required, that they have a “domestic violence” issue. In these situations, the month does not “tick” on the 60 month “clock”. BUT, according to federal rules, the “clock” does not stop. So what happens is that the parent uses up their 60 months of federal TANF eligibility but continues to get cash aid paid with state dollars. Starting and stopping the “clock” can drag out state funded cash welfare for years. We simply don’t have the money to do this anymore.

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