Tuesday, March 9, 2010

Local Impact of Governor's Proposed Cuts to Safety Net




Philip L. Browning, Director

Los Angeles County, Department of Public Social Services

Governor Arnold Schwarzenegger started the year with a clear goal: "jobs, jobs, jobs."  That's good news for Los Angeles County communities that have been hit hard during the recession and for families and children who have been pushed into poverty as a result. 

But the budget proposal the Governor revealed would drastically undercut his job creation goal by eliminating employment for thousands and shredding safety net programs and services that provide for the most basic needs of impoverished L.A. County families and children, consequently worsening our local economy.

In L.A. County, the Governor's budget would hurt thousands of families who fell victim to the economic downturn.   Nobody understands this better than John, who for ten years had been a successful wholesale distributor.  In 2007, his business started declining, and by mid-2009, John had lost 80% of his clients.  The family filed for bankruptcy, depleted their savings, sold their possessions, and eventually lost their home.  John, his wife, and three children found themselves homeless, with no income or resources for the first time in their lives.  The family applied for CalWORKs in October 2009 as a means to weather the tough economic climate.  John and his wife are currently participating in the CalWORKs welfare-to-work program, and are motivated to find employment and start the trek towards regaining self-sufficiency. 

The Governor's most recent budget proposal would spell disaster for many L.A. County families and children, like John's, who are already barely hanging on.  The proposed 15.7 percent cut to CalWORKs grants, on top of a 4 percent reduction last year, would impact 165,129 families, including 318,144 children across the County.  CalWORKs grants have not increased since 1989.  Twenty years ago, the maximum grant for a family of three was $694.  Today it is still at $694.  The Governor is proposing to reduce it by 15.7% to $585, expecting families to survive despite the impact of 20 years of inflation on the cost of shelter and other basic necessities.  Ironically, in reducing funding for this program, California would forsake $4 from the federal government which could help stimulate local economies, for every state and local dollar.

The impact on struggling California families would grow much worse under the Governor's plan if the state fails to collect $6.9 billion in increased federal funding for state programs.   In the absence of those additional federal dollars, the Governor proposes to eliminate the entire CalWORKs program for all 165,129 families, many of whom would be forced into homelessness.

With the elimination of CalWORKs, California would lose $3.7 billion annually in federal Temporary Assistance for Needy Families (TANF) block grant funding and would not be eligible for hundreds of millions of dollars in additional federal funding that would create thousands of new subsidized jobs in L.A. County.  Over 4000 current subsidized jobs would be eliminated.  Every State dollar cut from CalWORKs results in $1.30 in lost economic activity.  If we factor in all the lost federal matching funds, the loss to the local economy is far greater. Cutting CalWORKs grants or eliminating the CalWORKs program directly conflicts with the Governor's stated goal of "jobs, jobs, jobs".


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