Judge James L. Warren ruled in Guillen v. Schwarzenegger that the state must pay the COLAs due to CalWORKs recipients as a result of the Governor's reduction in the fall of 2003 of the vehicle license fee (VLF), which triggered a 1998 state law linking the CalWORKs COLA to tax relief for motorists.
The ruling paved the way for approximately half a million households to receive the adjustments, retroactive to October 1, 2003. Motorists received a $4 billion tax cut with the VLF reduction; this ruling gives welfare recipients an estimated $120 million. For a typical family of three, the increase amounts to $25 per month - enough to ward off hunger, pay the utility bill or buy shoes for the children.
CalWORKs is California's welfare program for needy families with children. The maximum monthly welfare grant - $704 for a family of three in 2004 - is only slightly more than half of the income level at which the federal government classifies a family as poor.
In 1971, Governor Reagan signed the state law granting annual cost of living adjustments to CalWORKs recipients. But despite the annual COLA requirement, the Legislature frequently suspends the COLA in tough budgetary times. Since 1989, the Legislature has reduced welfare benefits five times and suspended the COLA eight times, reducing welfare recipients' purchasing power by 30%.
In 1998, the Legislature passed a complex tax relief measure for car owners, providing for the possibility of reductions in their car taxes depending on the state's revenue projections for each coming year. Because welfare recipients had felt the pain of lean budgetary times, the Legislature included in the statutory scheme a provision that enabled them to reap some benefit in flusher times: in any year in which there is an increase in VLF tax relief, CalWORKs recipients will receive COLAs. Under the scheme linking the welfare COLA to VLF relief, welfare recipients receive one dollar for every forty dollars in tax relief provided to motorists. When Governor Schwarzenegger provided an increase in tax relief by repealing in November of 2003 the tax increase of his predecessor, the COLA became due.
When the Administration refused to authorize the COLA, WCLP's Pastore, along with co-counsel Oren Sellstrom from the Lawyer's Committee for Civil Rights in San Francisco, filed suit in December of 2003 on behalf of a statewide class of CalWORKs recipients. The plaintiffs representing the class included Juana Raquel Guillen, a San Francisco mother who can barely feed her two daughters; Regina Jefferson, whose Los Angeles rent consumed more than two-thirds of her $704 welfare grant; and Tina Howerton, an Alameda County mother and college student who needed the extra money to buy shoes for her daughter.
Though the legislative intent to benefit CalWORKs recipients seemed straightforward, the suit proved to be anything but a walk in the park. Judge Warren expressed initial skepticism about plaintiffs' main theory, and repeatedly requested additional briefing and argument. In all, each side filed six briefs, and argued the case twice. Judge Warren described the advocacy as "superb."