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Program Enhancements and Other Budget Adjustments
Department of Social Services
The Department of Social Services (DSS) provides aid, service, and protection to children and adults in need of assistance. DSS programs are aimed at promoting the well-being of children, strengthening families, and helping adults and parents achieve their potential for economic self-sufficiency and independence.
The Governor's Budget includes $19 billion ($9.1 billion General Fund) for the DSS in 2008-09, an increase of $55.8 million General Fund from the revised 2007-08 budget and $75.9 million General Fund from the Budget Act of 2007.
CALIFORNIA WORK OPPORTUNITY AND RESPONSIBILITY TO KIDS
Total California Work Opportunity and Responsibility to Kids (CalWORKs) program expenditures of $7 billion (state, local, and federal funds) are proposed for 2008-09, including TANF and maintenance-of-effort (MOE) countable expenditures. The amount budgeted includes $4.7 billion for CalWORKs program expenditures within the DSS budget, $108 million in county expenditures, $2.2 billion in other programs, and $133.4 million for a CalWORKs program reserve. Figure HHS-10 displays 2008-09 CalWORKs expenditures and includes a breakdown of CalWORKs expenditures in other programs. The $2.2 billion in other programs includes MOE expenditures in excess of the required level. Recent federal changes expanded MOE-eligible spending to include certain expenditures for non-assistance benefits and services. This allows additional expenditures of $349.2 million for the State Department of Education's after school programs and the Student Aid Commission's CalGrants to be counted towards the CalWORKs MOE, reducing California's work participation requirement by an estimated 5.1 percent.
The Governor's Budget includes $131 million to provide a statutory COLA for assistance payments. This COLA, scheduled to become effective July 1, 2008, is estimated to increase monthly grant levels for a family of three from $723 to $754.
After many years of decline, caseload has been flattening over the last five years. Absent the program changes described below, the average monthly caseload in this program is estimated to be 450,900 families in 2008-09, a 1.4-percent decrease over the 2007-08 projection. The proposed changes to CalWORKs are estimated to reduce the 2008-09 caseload projection to 377,000 families, a 16.5-percent decrease from the 2007-08 projection.
Because many recipients are not working sufficient hours to meet the federal work participation requirements, California's work participation rate has ranged from a high of over 40 percent in 1999 to less than 22 percent now under new federal rules. In the past, California met the federal requirements due to the significant caseload reduction credits allowed under the original federal welfare reform legislation. The federal Deficit Reduction Act of 2005 (DRA) reauthorized the TANF program, adjusted the base year, and made other changes that will require California to increase work participation rates of individuals receiving assistance funded with TANF and matching MOE resources or face substantial fiscal penalties.
Current policies are not expected to increase work participation rates enough to meet the federal requirement for at least 50 percent work participation among all families. Although the rates have not yet been finalized, California will fail to meet the work participation rate for federal fiscal year (FFY) 2007, the first year for which the DRA's changes were effective. As a result, California's MOE will be 80 percent of FFY 1994 historic expenditures rather than the 75 percent MOE level California has been required to meet. The Governor's Budget increases MOE spending by $179.5 million in 2008-09, to $2.9 billion, to reflect this penalty.
In place of a budget balancing reduction, the Governor's Budget proposes to implement changes that promote personal responsibility and hold recipients accountable for the consequences of their actions, strengthen the work focus of the program, and improve California's ability to meet federal requirements and avoid fiscal penalties. The following key policy objectives serve as a foundation for the Administration's CalWORKs proposal:
- Emphasize the shared responsibility of government and participants to help families prepare for and achieve self-sufficiency through work.
- Continue to focus on employment to maximize participation in the workforce and decrease dependence upon aid.
- Create incentives for counties to utilize available resources more effectively and efficiently and reward the achievement of welfare-to-work goals.
- Maintain the support services necessary to transition recipients to the workforce.
- Maintain a statewide safety net for low-income families who meet work requirements.
- Maximize available federal block grant funds.
Major programmatic changes that place greater emphasis on work participation and reduce reliance upon public assistance are necessary to significantly improve the ability of the state and counties to meet federal work requirements in the TANF program. Failure to do so will result in substantial additional federal penalties to the state and counties. California must change its welfare policies while maintaining CalWORKs' core goals to minimize the risk of penalties and improve program outcomes. Key components of this effort include:
- Implement Graduated Full Family Sanctions - This proposal strengthens work requirements and recipient accountability by reducing grants by 50 percent when adults have been sanctioned for not participating and have remained in sanction status for an accumulated total of six months. Adults who have been sanctioned for not participating for a second accumulated total of six months will receive a full family sanction. Adults could remedy their sanction at any time by complying with appropriate work activities. Prior to any graduated sanction, counties will contact the adult to ensure that he or she understands the participation requirements and to urge program compliance, as well as connect adults to resources in order to remove barriers to participation. These contacts will consist of a combination of phone calls, letters, and home visits. This graduated full family sanction policy will reduce prolonged noncompliance while providing a reasonable timeframe to achieve compliance during which time benefits are still available.
- Work Incentive Nutritional Supplement - This proposal promotes self-sufficiency through work by providing supplemental food stamp benefits to certain working families. Working families who are receiving food stamps, but not also receiving CalWORKs assistance, would be eligible for this benefit if they work sufficient hours to meet federal TANF work participation requirements. This supplement provides a further bridge to self-sufficiency and better ensures that families who previously received CalWORKs assistance will not fall back into the program. This benefit would be set at a flat amount of $40 per month and each food stamp household may be eligible for one supplemental work incentive benefit per month.
- Continue County Efforts - This proposal continues to support and promote county efforts to increase work participation by implementing county peer reviews, publicizing individual county performance outcomes, and continuing funding for county implementation of strategies to engage CalWORKs recipients early in the program, maintaining full engagement, preventing recipients from becoming sanctioned, and encouraging sanctioned individuals to re-engage in the program.
- Modify the Safety Net Program - This proposal rewards working families by continuing safety net benefits for families beyond their 60-month time limit if they meet federal work participation requirements. The current safety net program minimizes the incentive for families to become self-sufficient.
- Ensure Consistent Child-Only Benefits - This proposal provides cash aid for families receiving child-only benefits that are consistent with other CalWORKs families. Under this proposal, aid to families receiving child-only benefits will be limited to 60 months. These families include parents or caretakers who are undocumented non-citizens, drug felons, or fleeing felons.
These reform measures are estimated to provide net savings of $73.7 million General Fund in 2007-08 and $476 million ($389.1 million General Fund) in 2008-09. With these reforms, the Governor's Budget proposes to maintain the $230 million included in the Budget Acts of 2006 and 2007 to support CalWORKs program improvements, including $90 million for counties to implement program improvements that lead to better outcomes and increased work participation rates for CalWORKs recipients and $140 million to support county administration. The Governor's Budget eliminates $40 million in Pay for Performance incentive funds in 2007-08, but makes available $40 million in 2008-09 for those counties that achieve improved program outcomes during 2007-08. The combination of CalWORKs reforms and state and county efforts will position the state and counties to increase work participation rates, meet federal requirements, avoid penalties, and successfully move families from welfare to work.
SUPPLEMENTAL SECURITY INCOME/STATE SUPPLEMENTARY PAYMENT
The federal Supplemental Security Income (SSI) program provides a monthly cash benefit to eligible aged, blind, and disabled persons who meet the program's income and resource requirements. In California, the SSI payment is augmented with a State Supplementary Payment (SSP) grant. These cash grants assist recipients with basic needs and living expenses. The federal Social Security Administration administers the SSI/SSP program, making eligibility determinations, grant computations, and issuing combined monthly checks to recipients.
The Governor's Budget proposes $3.7 billion General Fund for the SSI/SSP program in 2008-09. This represents a 2.9-percent increase from the revised 2007-08 budget. The caseload in this program is estimated to be 1.3 million recipients in 2008-09, a 2.1-percent increase over the 2007-08 projected level. The SSI/SSP caseload consists of 30 percent aged, 2 percent blind and 68 percent disabled persons. Absent the reductions described below, the overall General Fund contribution to SSI/SSP is projected to grow in 2008-09 by $384.1 million, or 10.5 percent, from the revised 2007-08 expenditure level.
The proposed SSI/SSP program budget-balancing reductions include $23.3 million in 2007-08 and $300.3 million in 2008-09, achieved by suspending the June 2008 and June 2009 state COLAs. Under this proposal, recipients will still see increased payments in total benefits in both years due to provision of the federal COLAs. In January 2008, SSI/SSP monthly payments for aged and disabled individuals increased from $856 to $870, and monthly payments for aged and disabled couples increased from $1,502 to $1,524. In January 2009, the monthly payment for aged and disabled individuals is estimated to further increase to $881, while the monthly payment for aged and disabled couples is estimated to further increase to $1,540.
IN-HOME SUPPORTIVE SERVICES
The In-Home Supportive Services (IHSS) program provides support services, such as house cleaning, transportation, personal care services, and respite care to eligible low-income aged, blind, and disabled persons. These services are provided in an effort to allow individuals to remain safely in their homes and prevent institutionalization.
The Governor's Budget proposes $1.6 billion General Fund for the IHSS program. The average monthly caseload in this program is estimated to be 407,900 recipients in 2008-09, a 4.6-percent increase over the 2007-08 projected level.
Total IHSS expenditures continue to grow much faster than IHSS caseload. Absent the reductions below, General Fund expenditures for the IHSS program are projected to have grown by approximately 194 percent from 1999-00 to 2008-09, while caseload is estimated to have grown by less than 80.5 percent during the same period.
The proposed IHSS program budget-balancing reductions include $361 million ($119.6 million General Fund) in 2008-09. This is realized from an across-the-board reduction in service hours for non-medical domestic and related services to IHSS recipients. These services include meal preparation, meal clean-up, laundry, food shopping, and errands. In addition, county administrative funding would be reduced, along with a corresponding reduction in county workload. Specifically, the Administration proposes to change the timeframe for re-assessing the condition of IHSS recipients from every 12 months to every 18 months. These reductions should not impede the IHSS recipients' ability to remain safely in their own homes and avoid institutionalization.
CHILD WELFARE SERVICES
The child welfare system in California provides a continuum of services through Child Welfare Services (CWS), Child Abuse Prevention, Foster Care, Adoption Assistance, and adoptions to children who are either at risk of or have suffered abuse and neglect. The Governor's Budget includes $4 billion ($1.6 billion General Fund) to provide assistance payments and services to children and families under these programs. This is a $151.3 million ($95.9 million General Fund), or 3.6 percent, decrease from the revised 2007-08 budget.
CWS has evolved into an outcome-focused program with the implementation of the federal Child and Family Services Review and the California Outcome and Accountability System. These protocols establish a comprehensive process to measure program performance and track improvement in California's child welfare services delivery system. Program success is measured in terms of improving the safety, permanence, and well-being of children and families served.
The proposed CWS program budget-balancing reductions include $264.5 million ($168.1 million General Fund) in 2008-09. Included in this proposal is a reduction to the basic care, specialized care, and clothing allowance rates for the Foster Care, Kin-GAP, and Adoption Assistance programs. The proposal also includes a reduction to maintenance payments for Foster Care, Group Homes, and Seriously Emotionally Disturbed placements. Rates paid to Foster Family Agencies (FFA) will be reduced as well, but by a lesser amount, as FFA placements are the only foster care category that did not receive a statutorily authorized 5 percent rate increase effective January 1, 2008. This proposal also includes an $83.7 million reduction to the allocation to counties for CWS. Counties will choose how to apportion the reduced allocation to ensure the health and safety of vulnerable children and their families, while minimizing the risk of failing to meet federal outcome requirements.
COMMUNITY CARE LICENSING
The Community Care Licensing program directly licenses and monitors approximately 75,000 community care facilities and provides oversight, direction, and training to counties that license approximately 11,000 additional facilities. These facilities include child daycare, children's residential, and elderly residential and day support facilities and serve approximately 1.4 million clients statewide. The Governor's Budget includes $118.2 million ($37.3 million General Fund) in 2008-09 for licensing activities that promote the health, safety, and quality of life of each person in community care facilities. This is a $1.7 million ($1.3 million General Fund) increase from the revised 2007-08 budget.
The proposed Community Care Licensing program budget-balancing reductions include $2.7 million ($2.3 million General Fund) in 2008-09 by reducing community care licensing random visits. Under this proposal, 14 percent of facilities would receive random inspections annually, equating to a visit for each facility approximately once every seven years. To mitigate health and safety impacts, no reduction will be made to follow-up inspection schedules for facilities that have previously been found to be out of compliance with licensing standards. Even with this reduction, the frequency of visits will surpass the level occurring when the Administration took office in 2003.
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