State Funding for SSI/SSP Remains at Recession-Era Levels

State funding for a key public support that provides modest cash assistance to low-income seniors and people with disabilities in California remains at recession-era levels because state policymakers have largely left in place deep spending cuts dating as far back as 2009. The program in question has one of the longest names you’ll ever encounter: Supplemental Security Income/State Supplementary Payment (SSI/SSP). But it fills a critical need, combining both federal (SSI) and state (SSP) dollars to help over 1.2 million people across California pay for basic necessities such as housing, medicine, and food. (In California, people enrolled in SSI/SSP are not eligible for federal food benefits through the CalFresh program, a policy known as the “SSI cash-out,” so they must use their monthly SSI/SSP grant to buy groceries.)

In response to deep budget shortfalls caused by the Great Recession, state policymakers cut the SSP portion of the grant for both individuals and couples to the lowest levels allowed by federal law. For people living in their own homes, these cuts reduced the maximum individual SSP grant from $233 in 2009 to $156 by mid-2011, a decline of one-third. With an improving fiscal outlook, the state boosted the SSP portion by 2.76% in 2017, raising the monthly grant to about $161 per month. However, no further state increases have been provided since then, and Governor Brown proposes to continue this freeze into 2018-19, the state fiscal year that begins this coming July 1. Because of these state cuts, the maximum combined SSI/SSP grant for an individual, which is currently about $911 per month, is equal to just 90% of the federal poverty line. In order to bring the total SSI/SSP grant up to the poverty line — a level it last reached in 2009 — the state’s SSP portion would have to rise by over $100 per month, to $262.

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

In 2007-08, the year the Great Recession began in California, the state’s share of SSI/SSP cash assistance totaled $4.2 billion, after adjusting for inflation. In contrast, the state is estimated to spend $2.6 billion (inflation-adjusted) in 2017-18, the current fiscal year. In other words, after taking into account the cost of living, California is providing $1.6 billion (about 40%) 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 is up by over 2% compared to 2007-08.

So, when the Governor projects positive state General Fund balances for the next few years, it’s important to keep in mind that this promising fiscal scenario rests, in part, 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 assumes that each year’s state budget will continue to reflect well over $1 billion in annual state “savings” that come from reducing a critical source of basic income for more than 1 million of California’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” that reflects California’s values.

— Scott Graves