Governor Brown’s Health and Human Services Budget

Governor Brown’sHealth and Human Services Budget For: EOPS CARE March 9, 2011 WCLP

Overview • The Big Picture of the Governor’s proposal. • The Governor’s proposed cuts this year in CW, IHSS, SSI, Housing and Health. • The Governor proposed realignment and redevelopment proposals. • What Can Be Done to Prevent The Harm? WCLP

Big Picture • Gov. proposes a budget solution that is a mix of cuts and revenue. • $12.5 billion in cuts – nearly 60 percent come from HHS programs. • $12.0 billion in revenue by extending 2009 tax increases for five years. • Realign state programs to counties along with dedicated revenue. WCLP

One-time Savings and Borrowing • $1.8 billion in borrowing from special funds • $1.7 billion in property tax shifts • $1.0 billion from Proposition 10/First Five reserves • $0.9 billion from Proposition 63 moneys to fund community mental health services. WCLP

Major Budget Reductions • Redevelopment $1.7 Billion • MediCal $1.7 Billion • CalWORKs $1.5 Billion • Prop 10 $1 Billion • Prop 63 $900 Million • DDS $800 million • Child Care $718 million • IHSS $500 million • SSP $200 million WCLP

CalWORKs • Governor Brown proposed a 25% cut to the CalWORKs program funding • A $1.5 billion cuts that would eliminate all cash aid for 115,000 families and 234,0000 children. • While it would repeal damaging CalWORKs proposals approved in 2009, it would replace them with even more damaging provisions in some cases. WCLP

CalWORKSTime Limit for Children "Rigid" 48-month time limit for assistance. After 48 months on aid (applied retroactively) all families, including children, who are not meeting federal work participation requirements would lose all cash assistance even if they had previously qualified under one of the following exemptions: • Under 16 years old • Children in secondary or post secondary schools • Persons who are disabled with a doctor’s verification • Advanced age • Non-parent caretaker relative caring for a dependent, a ward of the court or if child at risk of placement in foster care • Person caring for ill or incapacitated member of household • Person caring for a child under six months old • Person caring for a child 12 months to 23 months (expires 7-1-11) • Pregnant women with medically verified impairment to work • Month in which child support offset the full cost of grant • Adult incapable of maintaining employment despite history of cooperation and participation. WCLP

Any month in which the AU got non-cash aid • Persons receiving aid in Indian country • Non-minor dependents under supervision of welfare or probation departments • According to DSS 147,000 households will hit the 48 month time limit and 115,000 would lose all cash aid during 2011-12. The state cuts $698.1 million by doing this. WCLP

Safety Net Work Requirement • The same 48-month time limit would apply to the Safety Net and to Child-Only cases. • The only exception is if the adult is meeting work participation, but even in this case the family would receive a child-only grant level. • According to DSS, 52,000 families in the two safety nets have exceeded the 48-month time limit and 36,000 would lose all aid in 2011-12. WCLP

Eliminate GA Eligibility For Some Children • Eliminating CalWORKs for 234,000 children will push families to apply for the state’s last safety net, general assistance. • Counties must provide and pay for all GA costs. • If the state eliminates aid to children, counties will face hundreds of millions in new costs. • Administration proposes to eliminate GA for children who time off CalWORKs to avoid the cost shift to counties. WCLP

13% Grant Cut to CalWORKs Grants. • All grant levels would be reduced by 13%. The maximum grant for a family of three would fall from $694 a month to $604 a month. The current maximum grant for a family of $694 is the same as the state provided in 1989. • The average CalWORKs grant currently of about $503 a month would be reduced by $65, to about $438 a month. • A cut to the CalWORKs grant reduces the number of families meeting work participation, making the state more likely to receive a federal penalty. • The state cuts $405 million by doing this. According to DSS, CalFresh benefits would increase by $27 a month on average. WCLP

$376 Million Reduction in the County Single Allocation Fund. • The $376 million reduction is equal to the reduction given to counties when the exemption to work requirements was put into law. Counties would be required to reduce by using existing flexibility to deny services like child care if the county does not have adequate funding. • No Extension of Exemption to Work Requirements. Current law, set to expire at the end of June 2011, exempts families with children up to 23 months old from work requirements. These exemptions would be allowed to expire, meaning that these families have to meet work requirements by July of this year. WCLP

$1.5 Billion Shift to Other State Purposes. • The budget proposes to shift nearly $1 billion in TANF funds to the Student Aid Commission to pay for CalGrants and to reduce General Fund spending by the same amount. • The budget also proposes to reduce state spending on CalWORKs by $533 million • These shifts are on top of the existing $1.2 billion in shifts away from welfare. WCLP

Child Care Reductions • Restoration of Stage 3. The Governor proposes to restore Stage 3 child care in April, but with new cost sharing provisions for families who are in higher cost child care programs. • 48-Month Time Limit on CalWORKs. The budget proposes to realize $34 million in child care savings from imposing time limits in CalWORKs, likely from families that are getting child care but not meeting work requirements after 48 months. • Elimination of Child Care for 11- and 12-Year-Old Children. This proposal will cut $38 million. WCLP

Conference Committee ActionsCalWORKs • $426 Million Cut to Single Allocation • Expand exemptions to month 35 • Cut grants by 8% ($40 cut) • Reduce earnings disregard to $100 • 48 month time limit for adults • $100 million cut to child only after 48 months on aid • $45 million cut to Cal-LEARN WCLP

The Budget Committee’s Proposal • A child only grant for two children gets a maximum grant of $565 a month. After the 8% grant cut to CalWORKs grants this amount is reduced to $520 a month. • A CalWORKs family with one eligible adult and two children earning $700 a month will get a grant of about $289 a month after the 8% CalWORKs grant. When combined with their earnings from work this family will have $989 a month to live on WCLP

Under the Conference Committee Agreement • According to DSS at least 86,000 child only cases would get a grant cut. To achieve $100 million in savings, WCLP estimates that it requires a cut of $95 a month from each of these families. Thus their cash benefits will be reduced from $520 a month to $425 a month. • Meanwhile with the restoration of the $100 earned income disregard, the family with $700 a month in earned income sees their total household income increase to $1,039 a month. WCLP

Conference Committee ActionsCalWORKs • Rejected 48 months time limit on children • Repealed AB X4 8 • Rejected retroactive elimination of all time clock stoppers • Rejected, in part, 13% grant cut • Rejected limits on GA for children WCLP

Conference Committee ActionsChild Care • Reduced license-exempt payments from 80 percent to 60 percent of the market survey. • Cuts state preschool and all child care programs by 15% except CalWORKs Stages 1 and 2 for savings of $267 million in 2011-12. • Reduced funding for Title V contracts by 10 percent for savings of $109 million. • Deprioritized services for 11 and 12 year-olds except those with special needs for savings of $39 million. WCLP

The Prognosis • Governor proposes passing budget by mid-March so voters can be asked in June to extend taxes and make other changes needed to enact the budget. • If the tax increases fail, the state will have to reduce about $9.5 billion in state expenditures. • As bad as these cuts are, they will become much worse if the taxes are not extended. WCLP

Governor Brown’s Health and Human Services Budget