California is on the verge of turning down a significant chunk of federal economic recovery funds intended to help states pay for cash assistance for low-income families with children. The American Recovery and Reinvestment Act (ARRA) establishes a temporary funding stream that will pay 80 percent – that’s right, 80 percent – of certain welfare-to-work program costs through September 2010. The idea is to provide states with funds that would help them avoid making draconian cuts to programs – such as California’s CalWORKs Program – that help families who are being hit hard by the current economic downturn.
Unfortunately, this extra federal money wasn’t enough to stop a 4 percent cut to CalWORKs grants from being included in the 2009-10 budget agreement. Starting July 1, this cut will reduce the maximum monthly grant for a family of three from the current $723 (an amount that hasn’t changed since 2004) to $694 – the same amount that families received 20 years ago. So, although the budget “scored” $147 million in General Fund savings from this grant cut in 2009-10, the savings really only amount to $29 million. The other 80 percent – $118 million – represents forgone federal funding.
The Legislature and Governor still have time to reverse the grant cuts. Let’s hope they all reflect on what the Governor said just last week: “Even before President Obama signed the Recovery Act, I pledged that I would act quickly to make sure California taps into every available dollar of federal funding and that we would put those dollars to work effectively.”
Sounds like a plan.
— Scott Graves