Deep Cuts Contribute to Steep Drop in CalWORKs Enrollment

The fallout from recent years’ state budget cuts is evident across California – from larger class sizes to rising university fees to diminished support for low-income seniors and people with disabilities. Recent cuts also have taken a toll on CalWORKs, which provides cash assistance to low-income families along with welfare-to-work services to help parents find jobs and overcome barriers to employment. Nearly four out of five CalWORKs participants (78.7 percent) are children.

Despite a jobless rate that remains in double digits, the number of families enrolled in CalWORKs has tumbled sharply, with the caseload dropping by more than 25,000 (4.2 percent) from June 2011 to March 2012, the most recent month for which data are available. Some portion of this decline could be due to the modest improvement in California’s economy: The state’s unemployment rate fell from 11.9 percent in June 2011 to 11.0 percent in March 2012. Some CalWORKs parents may have moved into the workforce – and out of the CalWORKs Program – during that period.

But the suddenness of the caseload drop-off indicates that some other factor was at work. The culprit? The major reductions adopted as part of last year’s budget. The Legislature cut CalWORKs grants by 8 percent, significantly reduced the earnings limit to qualify for CalWORKs, and rolled back adults’ lifetime limit from 60 months to 48 months. Not surprisingly, all three of these changes took effect in July 2011 – just as CalWORKs enrollment began its steep downward trajectory. In fact, recent state estimates suggest that these cuts caused more than 10,000 families to lose CalWORKs eligibility during 2011-12, and those estimates may understate the actual impact.

We at the CBP often say that budgets reflect values and priorities. A key corollary: Budget cuts have consequences.

— Scott Graves