February 28, 2012: Following up on its first take on the Governor's 2012-13 budget re: subsidized child care, the Legislative Analyst' Office (LAO) released alternative suggestions for the legislature to consider rather than the proposed cuts to CalWORKs the LAO called, in January (see story below) "too severe."
January 12, 2012: From the report, "Overview of the Governor's Budget," released yesterday by the Legislative Analyst's Office [emphases ours]:
"The Governor proposes to reduce General Fund support for California Work Opportunity and Responsibility to Kids (CalWORKS) and subsidized child care -- the state's primary sources of cash assistance and work support for low-income families -- by a total of about $1.4 billion. His proposal would focus reforms in the CalWORKS program on achieving the goal of emphasizing work. The Legislature may wish to consider whether the proposed reductions to families most in need of support to achieve self-sufficiency are too severe, as well as the Governor's proposal to restrict eligibility criteria and time lines for subsidized child care....
Under the Governor's proposal, the current CalWORKS program would be replaced by a three-part system...two calWORKS subprograms -- CalWORKS Basic and CalWORKS Plus -- and a new Child Maintenance program. The ...Basic program would ...continue the current...program, including current cash assistance levels and employment services, for eligible adults for up to 24 months. After 24 months in...Basic, families working a sufificient amount of hours (30...for single-parents; 35 for 2 parents; 20 for single parent with child under 6] in unsubsidized employment would be eligible for an additional 24 months (48 total) of cash assistance, employment services, and child care through the ...Plus program. Families who fail to meet ...work ...requirements...would be transferred to the Child Maintenance program...[and] receive reduced cash assistance (27% below current levels) and no employment services or child care. Participation in the Child Maintenance program would not be time limited....
...although these programs would continue to serve the same population as the current CalWORKS program, a majority of current recipients would face a reduced cash grant and all recipients would face more restrictive limitation on receipt of employment services and child care....the Governor's budget also proposes to transfer $736 million in federal Temporary Assistance for Needy Families (TANF) block grant funds (the primary source of federal funding for the CalWORKS program) ...to the Student Aid Commission to fund Cal Grants...
The Sacramento Bee's Capitol Alert explains this shift:
...the state cannot cut $1 billion of its own money on welfare, or else it would spend so little on the program that the federal government would take away federal funds. On paper, it looks like Brown would only cut $248 million in state welfare costs, even though $1 billion in welfare programs would be reduced.
To actually save the full $1 billion, the state needs to play the annual fund shift game. Brown's solution: Rather than use only state money to fund Cal Grants - college scholarship aid for the poor - California would use $736 million of federal funds that formerly went to welfare recipients.
Read more here: http://blogs.sacbee.com/capitolalertlatest/2012/01/welfare-cut-relies-on-shifting-money-to-scholarships.html#storylink=cpy
The LAO report clarifies the proposal regarding subsidized child care overall, explaining that subsidized child care programs currently target three populations:
"...(1)current CalWORKS recipients, (2)former CalWORKS recipients, (3)other low-income working families not receiving CalWORKS cash assistance. The Governor's proposal [would] reduce fudning for these programs by roughly $450 million or almost 30%. ...additionally, the proposal would reduce the maximum amount the state pays child care providers (savings about $80 million) and reduce family income eligibility thresholds from 70% of the state media income to 200% of the federal poverty, which equates to 62% of SMI...the administration estimates that its package of child care-related reductions would elmiiniate about 62,000 slots from a current total of about 293,000 slots.
Overall, the LAO report concludes:
....More generally, the Legislature should consider whether focusing CalWORKS and subsidized child care primarily on support efforts of low-income families to obtain employment is consistent with its priorities or whether other objectives are also important. Focusing these programs on a different set of objectives and priorities than the Governor would not necessarily elminate opportunities for budgetary savings; however, the potential for savings could be less and there could be trade-offs in other areas of the budget."
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