WCLP Response to State of the State

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WCLP Response to State of the State
01/06/2010

Budget Rumors on Child Welfare Services and SSI Cashout

The Governor’s call today for increased federal spending to avoid harsh cuts to health and human service programs is a bit ironic. One of the reasons that California has a low return on the taxes we send to Washington is because this Administration‘s policies have prevented it. Case in point: Food Stamps – Due to a number of purely state barriers, our state is last, yes last, in the country in Food Stamp participation. Our state leaves $3.7 billion in Food Stamps back east every year even though it is one of the best ways to stimulate the economy. Case in point: Federal Tax Credits - The Governor has no plan to help families draw down an additional $2.1 billion in tax credits available to California families, including $1.6 billion in child tax credits and $500 million for low income working families. Before the Governor has his hand out for more money from Washington it might be helpful to take advantage of what is already available.

The Governor today called for “jobs, jobs, jobs” and made several proposals to increase the number of jobs. But the Governor has also proposed to eliminate CalWORKs and significantly reduce IHSS and child welfare all of which either provide employment for tens of thousands of working families or which help lift families from welfare to work. The Governor can not have it both ways. If California is going to recover economically it needs to hold onto to every existing job and add jobs. Adding jobs with one hand while subtracting jobs with the other hand is incoherent policy and unlikely to help the common good.

Here is a link to the Governor's press release on the State of the State which includes links to his specific policy proposals, http://www.gov.ca.gov/press-release/14124/ .

Budget rumors abound - One rumor is that child welfare programs will be "realigned" to counties. This means that child welfare could become like the GA program where counties would be mandated to provide CWS but would have to pay for it from their own budgets. Apparently about $500 million would be sent to counties to help with the cost but knowledgeable observers believe this is totally inadequate to operate the programs. As we have seen in GA, when counties have to pay for a program entirely from their own resources, there is a tendency to reduce costs by limiting services.

Another rumor making the rounds is that the Governor will propose doing away with SSI "cashout" for some populations. Currently SSI recipients are not eligible for federal Food Stamps even though they otherwise qualify for a small amount of aid. California "cashed-out" Food Stamps more than 20 years ago and added $10 a month to the SSI check in lieu of Food Stamps. Currently because SSI recipients are not eligible for Food Stamps if they live in a household in which some members do get Food Stamps the SSI income is not counted towards the rest of the families income. This results in more Food Stamps for the family. If cash out is reversed these families would lose millions in Food Stamp benefits, significantly more than what would be gained by SSI families getting Food Stamps. In short, it is a net loser for poor families. But the Administration may propose to bifurcate the SSI program so that cash out would only be ended for SSI recipients not in mixed benefit households like Massachusetts did several years ago. There are signioficant issues about how this would be done, how much it would cost to administer and where the state plans on getting the money for it.