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April 2003, Volume 9, Number 2

California: Welfare, Health, Budget

Welfare recipients who "time out" after five years of cash assistance lose the portion of the monthly cash payment meant for adults, $110 in California, but cash payments continue for their children. In California, five-year clocks began January 1, 1998, and the first recipients to reach the five-year "lifetime" limit lost adult cash benefits in January 2003.

The Los Angeles Times on April 6, 2003 profiled adults who reached time limits in Tulare county, the state's leading farm county, and concluded that the result of losing the adult portion of cash payments will be more poverty, more migration to areas with jobs, and a further growth in the informal or cash economy. In Tulare county, the number of welfare recipients has been climbing since reaching a low in 2000, despite an Office of Education program -- MOVE, or More Opportunity for Viable Employment - that has paid to move 1,000 welfare recipients outside Tulare County in the last four years.

About 25 percent of Tulare county's adult recipients have less than a ninth-grade education, and many are Hispanic immigrants who do not speak English. According to the Los Angeles Times, "Tulare [county's] English speakers have left the [welfare] system but, for the most part, Spanish speakers haven't." Most studies conclude there are not enough "good jobs" in rural areas to employ ex-welfare recipients, so that if they remain excluded from cash payments, there may be rural-urban migration.

Of the 10 California counties with the lowest percentage of high school graduates in 2000, five were in the central San Joaquin Valley. Among US adults, 25 percent have at least a BA, 50 percent finished high school but not college and 25 percent did not finish high school.

The Los Angeles Times on March 24, 2003 examined welfare trends in Los Angeles county, and quoted former Health and Human Services official Wade F. Horn as saying that "The new welfare program is relatively recession-proof," as the culture of the poor changed from expecting assistance to expecting to work. ("The best social program is a job.") Others point to the more rapid rise in unemployment than in welfare and suggest that fewer low-wage workers were laid off, or that more ex-recipients have gone to work in the informal economy.

One of the major puzzles is why the welfare caseload has not risen with unemployment. Wendell Primus, a former HHS official who quit to protest the 1996 welfare law, asked: "Why didn't welfare rolls grow in a recession? A safety net ought to respond to a recession; there is something wrong if it doesn't." Primus says that 18 percent of the poorest single mothers did not receive welfare checks and were not employed in 1993, and 39 percent were in the same situation in 2001, suggesting that life was getting harder for these women.

The percentage of never-married mothers who were employed rose from 47 percent in 1994 to 69 percent in 2000, and was 68 percent in 2002, suggesting that many of the new entrants to the work force kept their jobs.

Across the US, the number of welfare cases fell from five million in 1994 to two million in 2002, including 454,000 in California. Between 1996 and 2000, the number of welfare cases (usually mothers with children, but sometimes children only) in California declined by half. In Los Angeles, caseloads dropped eight percent between October 2001 and October 20002 despite an increase of one percent in unemployment.

Congress is working on re-authorization of the 1996 welfare reform law. Under the House version of the bill approved in February 2003, the federal government would continue to give states about $16.6 billion a year in block grants, but also increase gradually the percentage of a state's caseload that must be working for benefits from 50 percent now to 70 percent in 2008. Recipients would have to work or be involved in other scheduled activities, such as training, 40 hours a week, up from the current 30 hours, including at least 16 hours of work a week.

Health. The California Labor Federation, AFL-CIO, calling SB 2 "the most important bill in the state of California and the most important bill in America right now," launched a campaign in March 2003 to enact passage of a state measure that would require California employers to play or pay- provide health insurance for their employees, or pay additional payroll taxes. An estimated six million Californians -- nearly one in six -- lack health insurance.

The San Joaquin Valley has some of the dirtiest air in the US, with much of the air pollution caused by cars and trucks, and some caused by agricultural activities, including dust from unpaved roads and exhaust from older diesel irrigation pumps. Title V of the federal Clean Air Act requires permits from stationary sources of emissions; farms have been exempt from obtaining permits under state law. The federal government threatened sanctions if state law is not changed to require at least larger farms to obtain pollution emission permits.

Housing. Assemblyman Simon Salinas introduced AB 32, which would allow farm employers to build or rehabilitate farm-worker housing with public funds, and limit rents to those established by the state.

Huron, one of 15 Fresno county cities, is adding an 81-unit apartment complex and an 80-unit housing subdivision; the apartment complex is limited to residents who earn between 30 percent and 60 percent of the area's median income level, which is $24,609. Mayor Pro Tem Ramon Dominguez says that many of the farm worker families in the area double up because of the lack of housing.

Mecca, a farm worker city in the Coachella Valley, opened a $12 million 106-space mobile home park, Paseo de los Heroes, in March 2003 that included an on-site 54-child Migrant Head Start center. In 1998, Riverside county was sued for evicting families from illegal trailer parks, and in 2000 settled the suit by pledging $16 million in loans and grants for community-wide projects. Mecca also has the Chapultepec Apartments, a 31-unit complex, and added 40 additional beds for migrant farm workers at Las Mananitas dormitory.

State Budget. The major state issue in Spring 2003 was the state's budget deficit, some $30 to $35 billion over 16 months. The largest single item in the budget is state funding for K-12 schools. Much of this funding is for categorical programs, meaning that the money must be spent on, for instance, class-size reduction in grades K-3.

California struggled with deficits during the first half of 2003. The cause of the deficits was the state government treating extraordinarily high taxes paid by those cashing in stock options as a permanent source of revenue. In 2000, at the peak of the boom, 44,000 California taxpayers paid 38 percent of the state's $40 billion in income taxes, almost $350,000 each. When the stock market fell, so did the taxes paid by these taxpayers.

In FY02, there were 129 million federal income tax returns filed, including 12 million by persons purporting incomes of $100,000 or more. Californians reporting incomes of $100,000 or more filed percent of the state's returns, but accounted for 54 percent of the state's reported income and 79 percent of personal income taxes paid in 2000- some $32 billion, or 40 percent of the state's general fund budget.

EITC. The Earned Income Tax Credit is the largest cash transfer program for the poor, who file income tax returns and receive cash if they had children and low earnings. Many low-earners use tax preparers, and some compete for business by advertising that they will obtain maximum refunds.

A Mendota tax preparer was sentenced to 15 months in prison in March 2003 for preparing false tax returns on behalf of farm workers, signing them and diverting the checks to her post office boxes; the government estimated the loss at over $300,000 between 1995 and 1997.

Census. Census 2000 "long-form" data, collected from 1 in 6, or 19 million, U.S. households, was released for California in August 2002, and reported that there were several tracts, places with 3,000 to 5,000 people, where more than half of all residents were poor.

The census also reported on commuting patterns, and found that a small but rising percentage of San Joaquin Valley workers commute to jobs in coastal counties, enduring daily commutes of 1.5 to three hours. The number of commuters is in the thousands, not the tens of thousands, but the fact that housing prices are far cheaper in the San Joaquin Valley, and wages far higher in coastal counties, encourages long-distance commuting. Long-distance commuting is acknowledged to be bad for families and lifestyles, and worsens air quality.

In California, the gap between the poorest and richest residents widened in 54 of 58 counties in the 1990s.

1936 Grapes of Wrath. In February-March 1936, the Los Angeles Police Department deployed 136 officers to 16 major points of entry on the Arizona, Nevada and Oregon lines, with orders to turn back migrants with "no visible means of support." The Okies fleeing the Midwest droughts of the 1930s were accused in California of "shiftlessness," "lack of ambition," "school overcrowding" and "stealing jobs" from native Californians.

The LAPD gave those it stopped a choice: turn around or be sentenced to 180 days in jail- some of the inmates worked off their jail time as farm workers. Many Californians opposed the LAPD's border blockade, but the Los Angeles Times editorialized that it was necessary to save tax-payer money that would be spent on relief and to keep out of the state "imported criminals ... radicals and troublemakers." The now-defunct Los Angeles Evening News editorialized that the blockade "violates every principle that Americans hold dear ... the right of any citizen to go wherever he pleased."

The blockade was dropped in April 1936, after the LAPD was sued for blocking the return of several Californians. The LAPD later did a study of the Okies, and concluded that Okies were mostly religious, hard-working agricultural laborers with families who, because their jobs were seasonal, used government relief checks to tide them over in the off season.

Lee Romney, "End of Welfare Leaves Rural Poor in a Bind," Los Angeles Times, April 6, 2003. Elizabeth Shogren, "New Welfare System Seen as 'recession-proof,'" Los Angeles Times, March 24, 2003. Cecilia Rasmussen, "LAPD Blocked Dust Bowl Migrants at State Borders," Los Angeles Times, March 9, 2003. Jerry Bier, "Mendota preparer gets prison in tax scam," Fresno Bee, March 4, 2003.

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