May 20, 2002 Alert #5

Executive Director's Column
Families on Welfare Need Our Help

While legislators in Sacramento deal with California's looming budget crisis (see article below), policymakers in our nation's capitol are moving swiftly to reauthorize the Temporary Assistance to Needy Families (TANF) program, better known as welfare reform.
The House of Representatives acted last week by passing a bill that resembles President's Bush's welfare reform proposal, including stagnant funding levels and more stringent work requirements for families moving off the welfare rolls. The good news out of the House was an additional $2 billion that was added at the last minute for child care to help low income families.
The debate now moves to the U.S. Senate, where California Senators Barbara Boxer and Diane Feinstein will play important roles in the final shape of the Senate's welfare-related legislative package. Here are key issues that need to be considered:
Allow education to be counted as a "work activity": Education can be a viable path for recipients to move off the caseload and into self-sustaining employment. Recent research by the Chancellor's Office of the California Community College System finds that the earnings of welfare recipients increase substantially in the year after receiving a certificate or degree. Education must count as a legitimate "work activity" as recipients prepare to leave the welfare rolls
Make time limits more flexible: Stopping the 5-year federal time limit clock for families who are working part time and playing by the rules in making their way off of welfare makes sense and should be a part of the reauthorization package.
Restore benefits for immigrants: TANF eligibility to recent legal immigrants should be granted, or states should be given the option of providing benefits on their own.
Make poverty reduction an explicit TANF purpose: Congress can use TANF reauthorization to communicate to the public, recipients, and states what the goals and priorities of welfare reform will be over the next several years. Making poverty reduction an explicit purpose of TANF will emphasize the need to improve family economic well-being, not just move families off the caseload.
If you have not already done so, please write Senators Boxer and Feinstein as soon as possible and encourage them to support a welfare reform bill that includes the elements mentioned above. --Scott Anderson

Governor Gray Davis'
May Budget Revision

On May 14 Governor Gray Davis issued his revised 2002-2003 budget in light of the current fiscal crisis of the state. Health and Human Services suffered the single largest block of cuts followed closely by spending reductions for education.
Because California forbids deficit spending, the Governor must close the $23.6 billion gap that has occurred due to a decline in the general economy, tax losses from reductions in capital gains and stock markets, general personal income reductions, and layoffs in the workforce. The crisis will parallel that of 1990 and, like that crisis, this one will also span several years.
Nearly one-third of deficit reduction comes from spending cuts, and very little is from revenue increases. The major cuts are going to come from programs for those on low and fixed incomes and include:
Health Care: Medi-Cal will be cut by $1.1 billion. This will include reducing adult eligibility to shrink participation and will eliminate adult enrollment in Healthy Families programs for two-parent families; cutting of all "optional" services including those for psychological rehabilitation, medical equipment, dental care for all adults and similar services for children; and reducing provider reimbursements that will drive doctors and hospitals out of the Medi-Cal program With 6.2 million people already uninsured, these cuts will provide millions with no access to health care at all.
Social Services: While several programs such as CalWORKS that directs people from welfare to work survive due to federal mandates, others would not. County administration services for CalWORKS, foster care, food stamps, and other programs would be slashed. The budget mandates that social service recipients make out quarterly rather than annual eligibility reports so that if they make errors or fail to file, they would be automatically eliminated. State cost-of-living-adjustments would be eliminated for those receiving social security and disability and monthly supplementary payments would be frozen for couples and reduced for single recipients. Only federal increases of $9 and $15 per month for singles or couples would remain.
Education. Programs designed to encourage outreach from colleges and universities to K-12 students will be reduced. Over $1.1 billion in spending needed to finish this school year will be deferred to the start of the new fiscal year, making a huge cut in this year's school budgets.
Revenue enhancements in terms of reallocation of income include dipping into the Tobacco Settlement funds now ­ leaving them unavailable for the future ­ and partially rolling back the cut in the Vehicle License Fee (VLF). No new income taxes or tax rates are proposed for this budget crisis.
In sum, with the VLF rollback as the only new revenue source, payable by the poor as well as the wealthy, the majority of budget solutions are being born by those least able to find alternatives to the costs and consequences of these decisions.

What You Can Do
About California's Budget Crisis

SB 1255 by Senator John Burton (D-San Francisco) is the "trigger" bill to reinstate higher tax levels on the top 2 percent of high-income Californians. The phase-in of the 10 and 11 percent tax rates would be for single people earning $130,000 and above or couples earning $260,000 and above. Senator Burton's bill also makes clear that this is a temporary tax rollback to pre-cut levels only to meet the needs of the state during the budget crisis. It is estimated that the revenue generated from this reinstatement of the original tax rates would generate $1.8 billion that could be directed toward health and human services to ease the proposed cuts in the governor's budget.
California Church IMPACT is supporting SB 1255 as a means of distributing the burden of this crisis to all members of our society. We strongly urge you to write to Senator Burton and your State Senators, Assemblymembers, and Governor Davis expressing support for this temporary measure. It is only equitable and fair that we all have a role in helping the state through these difficult years.

Global Warming Issue Heats Up

AB 1058 by Assemblymember Fran Pavely (D-Agoura Hills) directs the Air Resources Board to monitor and regulate all greenhouse gasses that contribute to glob al warming. Increased environmental temperatures add to California's energy costs for cooling, to water use for hyrdroelectric power, and to health consequences especially for the elderly and very young.
The opposition to AB 1058 has been fierce. Automobile manufacturers and dealers have run full-page newspaper ads and radio spots stating inaccurately that this bill will ban SUVs and trucks and will force Californians to pay huge gasoline taxes or use taxes for their larger vehicles. AB 1058 does neither. It simply directs the Air Resources Board to monitor the air and determine what gasses are contributing to glob al warming. The ARB then may direct a reduction in greenhouse gasses, but equipment for those reductions already exists and is part of American auto manufacturing standards.
AB 1058 is supported by a wide variety of faith, environmental, and business groups that understand how serious increased global warming is to the health of the economy as well as of people. AB 1058 is now pending on the floor of the State Assembly. Please write your Assemblymember in support of AB 1058.