SSI/SSP and the Governor’s Proposed 2015-16 Budget: Recession-Era Cuts Remain in Place

During the dark days of California’s recent budget crisis, state policymakers had to make very tough choices about which critical public services to cut, and by how much. At the time, there was a general expectation around the state Capitol — and throughout California — that as the economy improved and revenues came back, policymakers would undo some or all of the reductions that they imposed during and following the Great Recession.

While lawmakers and the Governor have begun to reinvest in important services and systems over the past couple of years, some key programs remain on the chopping block despite a growing state economy and higher revenues. This list includes one of California’s most important public supports for seniors and people with disabilities: SSI/SSP (the Supplemental Security Income/State Supplementary Payment program). SSI/SSP uses both federal (SSI) and state (SSP) dollars to provide modest monthly grants that are intended to help 1.3 million low-income Californians keep a roof over their heads and purchase food and other basic necessities.

We described the state’s recession-era cuts to SSI/SSP cash assistance in a previous blog post. The bottom line is that state policymakers cut California’s portion of the grant from $568 to $396 for couples and from $233 to $156 for individuals. As a result, the maximum grant for individuals — currently $889 per month, including the federal SSI grant — amounts to just 90 percent of the federal poverty line. (In 2015, the poverty line for an individual is $11,770, or roughly $980 per month.) These state cuts undoubtedly increased hardship for vulnerable seniors and people with disabilities. Yet, they remain in place today, and the Governor proposes to maintain the state’s SSP grants at their current levels in 2015-16, the fiscal year that begins this coming July 1.

While the significant human cost of the state’s cuts to SSI/SSP grants is impossible to quantify, we can assess the impact on the state budget. These cuts substantially lowered state support for SSI/SSP, as shown in the following chart.

Human-Svcs---SSI-SSP---Funding;-State-$-CHART

In 2007-08, the year the Great Recession began in California, the state spent about $3.9 billion for its share of SSI/SSP cash assistance, after adjusting for inflation. The Governor proposes to spend $2.5 billion on SSI/SSP grants in 2015-16, more than one-third below the 2007-08 level. In other words, after taking into account the cost of living, the state is providing $1.4 billion less for SSI/SSP grants than it spent on the eve of the Great Recession — and this despite the fact that the number of Californians enrolled in SSI/SSP has risen by more than 5 percent since 2007-08.

So, when the Governor forecasts balanced state budgets for the next few years, it’s important to keep in mind that this promising fiscal scenario rests on a troubling assumption: that state policymakers will leave in place the recession-era cuts to SSI/SSP grants, perhaps permanently. Put another way, the Governor’s proposed budget is built on well over $1 billion in annual state “savings” that come from reducing a critical source of basic income for more than 1 million of the state’s most vulnerable residents.

As this year’s state budget debate heats up, state lawmakers — and all Californians — should ask themselves if this is the kind of “fiscal prudence” they bargained for.