Governor Schwarzenegger's proposed 2008-9 state budget cuts CalWORKs funding by $476 million, a cut of more than 20% from the $2.3 billion in state funds currently spent on CalWORKs. While other budget areas suffered larger dollar losses, no other major program area of the budget received such a large percentage reduction.

CalWORKs provides cash assistance and supportive services to 450,000 of the state's poorest families with children. Parents who are able must work at least 32 hours a week in order to keep their cash aid and federal law requires that at least 50% of adults meet work requirements. California also has historically provided cash assistance to all poor children even in cases where the parent is ineligible or has failed to meet the work requirement.

The cuts proposed by the Administration are patently unfair because unlike many areas of state government, the state is spending 25% less than it did 15 years ago on welfare. In fact funding for welfare has remained constant, and flat, since 1997 at $6.3 billion. Not only is the funding for welfare flat, but over the past 10 years $12 billion in welfare funds has been diverted to other state uses. Welfare spending is not only not causing the budget crisis, it has been and continues to contribute to the solution.

At its' core, the Administration's new budget is again proposing to deny cash assistance to children whose parents are not working enough for the federal government. Attempts to punish children for the purported sins of the parents has been repeatedly rejected by the Legislature and debunked on policy grounds. The Administration argues that the changes are needed to meet increased federal welfare requirements but the Administration knows that the state is likely to meet the federal requirements even without the budget proposals. In fact, of the 75,000 families the Administration wants to terminate from cash assistance, nearly half do not even count in the federal equation.

While advocates for the poor are appreciative of the first Cost of Living Adjustment for CalWORKs since 2004, it comes at the price of agreeing to let the state kick children off welfare. Trading away tens of thousands family's basic assistance for an increase in the grant would be short-sighted.

If the Administration wants to save money in welfare it should embrace some of the proposals put forth by the Legislature last year. These streamlining proposals would have increased our drawdown of federal funds by nearly $700 million while saving the state an estimated $45 million. For example,

AB 1060 (Laird) changes California from a quarterly reporting system to a semi-annual system for re-determining Food Stamps and CalWORKs eligibility and grant amounts. This change saves the state $43 million, increases sales tax revenue by $6 million and brings in $250 million in new Food Stamp funds, $40 million for school lunches and millions more for child welfare.

AB 176 (Jones) implements federal authority to have the federal government share in child support pass through payments to welfare families. California can increase the amount of child support that goes to families from $50 a month to $100 a month and save $3.5 million while providing $23 million more for poor families.

AB 433 (Beall) makes families categorically eligible for federal Food Stamps if they are MediCal eligible. If AB 433 passed Californians could receive $200 million in federal food stamp benefits, over $30 million dollars in additional federal funding for free school lunches and breakfasts, and several million dollars in increased federal child welfare services funds at a net cost of just $5 million.

AB 1382 (Leno) eliminates the requirement that households be finger imaged if they are applying for Food Stamp only assistance. According to the Assembly Appropriations Committee the bill would result in $125 million in new Food Stamp funds, $20 million in new school lunch funds and millions more in additional child welfare funds at a cost of only $2 million to the General Fund.

A Summary of the Proposed Cuts
Instead of looking at ways to assist poor families, streamline the programs, and save the state money, the Governor has proposed a 20% cut to CalWORKS:

• The budget again proposes full family sanctions for both the CalWORKs program and for child only cases which have used up their 60 month time clock. The full family sanction would be imposed gradually on families after they failed to respond to attempts to bring them into compliance.

• Imposes a 60 month limit on child only cases of ineligible parents (mostly immigrants).

• Due to all three proposals, 75,000 families would lose all cash assistance and the state saves $476 million in 2008-9.

• Provides for a CalWORKs COLA that will increase the maximum benefit from $723 a month to $754 for a family of three.

• The budget fully funds CW county single allocation funds and makes no changes to child care eligibility including Stage 3.

• It proposes a $40 nutritional supplement to working families not on the CW caseload but who can count for work participation purposes.

• The budget eliminates the SSP COLA for the blind, aged and disabled scheduled for June 2008 and suspends the 2009 SSP COLA also. This results in budget savings of $323 million for the 07-8 and 08-9 budget.

• The budget slashes child welfare program and IHSS budgets by more than $100 million each.

• Eliminates $40 million for CalWORKs Pay for Performance from 2007-8 but restores it in 08-09

• Food Stamps - 10% cut to CA Food Assistance Program benefits ($2.5 million) and 4% cut for Food Stamp administration ($14.9 million)