Jericho Trumpet
July 2005 Issue:
Working Families, Aged Blind and Disabled Held Hostage
in State Budget Debates
CalWORKS Families Regained Losses in Governor’s Budget
The Governor’s January Budget included several cuts in family
income support for participants in the state’s CalWORKS program.
The May-revised budget dropped one of the proposed cuts but included
a 6.4% reduction in the CalWORKS grant and permanent elimination of
the Cost of Living Adjustment (COLA) that is mandated by current law.
The legislature did not agree with the Governor’s 6.5% grant
cut, but did agree to suspend the COLA for two years. With the threat
of the November special election looming large--and the bigger budget
implications that the election raises--the Democrats made budget compromises
now in hopes of staving off bad publicity for a late “big spending”
budget. Unfortunately, California’s poorest families have been
held hostage in the process.
Ellen is someone who started the CalWORKS program with little work
experience beyond that of raising her two children--Brian, age 7 and
Tiffany, her 9-year-old. She has been able to work at a minimum wage
job in a local store because CalWORKs has assisted her with child care,
continued health care for her children, a partial grant, and food stamps.
Even with her full grant, COLA, and wages from work Ellen still lives
below the federal poverty standard.
Since CalWORKS was created in 1996 as response to federal welfare reform,
California’s caseload has been cut in half—from 932,345
families in 1996 to about 500,000 families at the present time. These
numbers do not reflect the families who have entered and exited the
public assistance system during that time. The focus of the program
is work and work readiness with a five year maximum time to receive
assistance.
Advocates began educating legislators and the Governor’s staff
in January. The results were reflected in the May Revise changes, in
the preservation of the grant amount, and in the two year suspension
of the COLA rather than a permanent loss.
Legislature Prevents Major Cuts for People with Disabilities
About 1.2 million blind, aged and disabled persons rely on payments
received from the federal/state SSI/SSP program. Of this number 127,000
are children under age 18. California is the only state in the country
that includes money for food rather than food stamps in its grant and
only 1 percent of SSI recipients report income from work. This means
California recipients must pay for everything from rent to utilities
to transportation to food from their SSI/SSP check.
The Governor’s budget proposed to suspend the state Cost of Living
Allowance (COLA) for the 2005-06 budget years and to hold back the federal
COLA set to begin January 1, 2006. The effect of these suspensions would
reduce the maximum grant by $33 a month for an individual (from $757
to $722) and $58 a month for couples.
In addition to the loss of SSI benefits, the Governor proposed to reduce
wages for In-Home Support Services (IHSS) workers from $10 an hour to
minimum wage. This would threaten the loss of the caregivers which many
SSI recipients need to remain independent and out of nursing homes.
Unlike many in the state, these recipients have no capacity to absorb
the array of cuts proposed by the Governor.
In a 2002 study of California’s SSI program, the RAND Corporation
found that from 1991 to 2001 the buying power of the SSI/SSP grant declined
by 13 percent. It is likely that this trend has escalated because, since
the release of the study, California has seen rents rise sharply.
The Legislative alternative presented by the Democrats pass through
the federal COLA but withheld the state COLA for the next two years.
Advocates are disappointed that people with disabilities have not been
held harmless in the budget debates. However, the Legislative budget
did hold firm on the wages of IHHS workers.
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Editorial
I am a “special interest” lobbyist. I am proud to be one
since the special interests that I represent are families and individuals
living at the economic margins of our state. Almost every day in the
news one side or the other vilifies the special interest lobbyists--unions,
big business, teachers, nurses, car dealers, etc.
The problem with this demonizing is that it distorts a basic element
of the democratic process: that we are many voices representing many
interests. Historically, voices have been heard better when they are
organized--and so we have unions, Chambers of Commerce, Business Associations,
citizens groups and the like.
One of the difficulties we face today is the fear (and the fact) that
some voices are more easily heard. It’s not only the possibility
that money can influence how a legislator or governor will vote, but
also whether some voices will even have real access to public officials
so that their concerns may be considered. The challenge for those who
advocate on behalf of poor people becomes finding ways to be taken seriously
in the legislative debate.
In my rather recent role as lobbyist for Jericho’s concerns--which
are those things that perpetuate poverty in California--I work with
“both sides of the aisle” to develop an understanding of
the ways in which poverty in our communities hurts us all. But in addition
to the logic of this argument and the stories of those affected, I bring
the fact that Jericho’s members are in every legislative district
in the state. Jericho’s members are opinion shapers in their congregations,
their workplaces and social settings--and they are voters. Jericho members
are motivated by their faith traditions to view the interests of California
from the perspective of their respective scriptures--where concern for
“the least among us” is basic.
In the past few months Jericho staff has have walked the Capitol halls
with other advocates to promote a just state budget. We have urged our
elected leaders to remember that they also represent the Californians
who are at greatest risk. These include families struggling to make
ends meet, people with disabilities who rely on state assistance, the
aged, and low-wage In-Home Support Services (IHSS) attendants whose
care allows children and adults with disabilities to remain in their
homes.
Our advocacy efforts partner with other advocates and with our members’
efforts in their districts. With your support we are continuing the
commitment Jericho made to poor people in California some eighteen years
ago. They have been, and will continue to be, Jericho’s “special
interest”.
-- Sister Marti McCarthy, SSS
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HOW THE BUDGET PROCESS WORKS
The state budget is the only comprehensive vehicle Californians
have for setting out priorities as a state; it represents our collective
investment in California’s present and future. (California
Budget Project)
Just as a family, the state budget reflects priorities and values which
balance needs and wants with available resources, Each year the Legislature
determines how much money will be available through taxes and fees and
how that will be spent for services, infrastructure, education, protection
for low income residents, and a myriad of other things.
All money that comes into the state goes either to the General Fund
as unrestricted money or to one of a number of special funds which restrict
money for particular purposes.
The General Fund (75 percent of the state’s expenditures) is
the state’s primary source for education, health and welfare,
as well as youth and adult corrections.
Special Fund money mostly pays for transportation, law enforcement,
construction of bridges, highways, and buildings and to regulate businesses
and professions.
Federal funds (about 31 percent of state income) pay for federally
established programs—and provide more than half of what California
spends for health and human services.
Difficulties in Budget Forecasting
Because income and the number of people using public programs varies
from year to year, budget forecasting is a “moving target”.
Budget planning began in 2004 for a budget that is released in January
2005 and will take effect on July 1, 2006.
When the Governor’s proposed budget is released each January,
it gets translated into a budget bill for the for the Senate and the
Assembly to consider simultaneously. At this point the budget belongs
to the legislature where it is debated and changed as the members see
fit.
As the Department of Finance’s original projections are refined
after taxes are collected in April the Governor will revise his or her
budget upwards or downwards. This “May Revise” is due the
middle of May. At the same time, the legislature’s debate is also
influenced by this new information. After debate, negotiation, and many
changes, the budget becomes law after the legislature approves it with
at least a two-thirds vote and the Governor signs it.
Other Influences on the Budget
It is important to remember that the budget can only fund programs
that are already established—it does not create new ones. However,
there is extensive legislation that is created separate from the budget
that greatly impacts it. Some examples are: changes in tax rates or
tax deductions (which reduce revenue), class size reduction (which may
require more teachers or classrooms), life imprisonment for “three
strikes” felons (requiring increased staffing and or facilities).
Appropriations Committees of each house evaluate bills for their fiscal
impact; however, over time the collective impact of the bills may be
greater than anticipated at the time of approval. In addition, Ballot
Initiatives over the past few years have had an impact on the budget.
For example, Proposition 98 which mandates a percent of the existing
General Fund and of any increase in the General Fund to go to Education.
Each year as the budget process unfolds, advocates work within a complex
framework to protect essential health and social services for the most
vulnerable in our state.
Much of this information has been taken from Dollars and
Democracy: An Advocate’s Guide to the California State Budget
Process, a publication of the California Budget Project.
The Budget as a Moral Document
Earlier this year 60 leaders from diverse faith communities across
the nation, called on Congress to examine the budget as an inherently
moral document. Since the questions below are also useful in analyzing
our state budget, we pass them along for your consideration.
Does the budget provide those in need with the assistance necessary
to build self-reliant, purposeful lives?
Does the budget provide adequately for all God’s children, including
the poor and sick, the old and very young?
Does the budget strengthen the foundations of our country in order
to make us safe and more secure?
Does the budget protect God’s creation, the environment?
Does the budget spread its burdens and rewards fairly, or are some
groups given special unearned privilege, while others are excluded from
America’s bounty and opportunity?
Does the budget promote justice and equality by providing for basic
human needs in health care, education, housing and other areas?
The State Budget Calendar
January 10: Governor submits proposed budget on or before this date.
February 10: Legislative Analyst delivers an assessment of the Governor’s
budget.
March-May: Budget Subcommittees in each house hold hearings on each
agency’s budget.
Mid-May: Governor submits proposed budget revi sions with current income
and expense projections.
June 15: Legislature should approve budget by midnight. A 2/3 vote
is required.
July 1: Governor signs budget. May blue pencil line items.
September 1: Legislature may override any line item vetoes with 2/3
vote.
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LEGISLATIVE ISSUES
Each year JERICHO reviews the bills introduced in the Legislature (this
year over 2,500) to determine which will either protect or improve the
situation for low-income people in the state. Our priorities are determined
by our members through the survey that comes with membership renewal.
The following three bills (out of the 50 we are following more closely)
are included here because of the major impact they would have on low-income
Californians.
SB 840 Offers Health Care For all Californians
SB 840, the California Health Insurance Reliability Act (CHIRA) sponsored
by Senator Sheila Kuehl passed the Senate and made it through the Assembly
Health Committee this session. SB 840 would create a state wide health
care system that puts all Californians into one insurance pool to share
the risk and replace money currently going to administrative costs in
private insurance programs.
The new health system would use federal, state and county monies already
being spent on health care in addition to payroll and individual taxes
that replace premiums and co-payments currently paid. Eligibility is
based on state residency rather than on employment or income.
Under current law, Californians will spend about $2,788 per family
in 2006 for health services and health insurance premiums. An independent
cost/benefit analysis by The Lewin Group estimates that SB 840 will
save the average family about $340 annually. Families with annual income
under $150,000 would see savings ranging from $600 to $3,000 as the
program begins.
According to the Lewin Group, CHIRA would eliminate financial waste
by consolidating the functions of many insurance companies into one
comprehensive plan. CHIRA simplifies administrative costs, achieves
bulk purchase discounts on prescription drugs and medical equipment,
and would reduce the use of emergency facilities for primary care.
In 2004 there were 6 to 7 million Califor-nian's without health care
coverage. There are in excess of 10 million Californians without prescription
drug coverage. One out of two bankruptcies filed in the U. S. alone
are due to health care costs. Uncompensated hospital care totaled over
one billion dollars in 2000.
The program's benefits cover hospital inpatient and outpatient care,
emergency room visits, physician services, prescription drugs, lab tests,
mental health and substance abuse treatment, eyeglasses and other services.
The program would also cover home health and adult daycare services
for the aged and/or disabled. Dental care would be covered along with
vision exams and hearing.
It is important to note that SB 840 is the “concept” bill.
A companion bill will be introduced next year with the financing element.
The "reliability" aspect of CHIRA is that no California resident
would ever lose their health insurance because of unaffordable insurance
premiums or because they change or lose a job or graduate from college.
AB 772, SB 437 Create California Healthy Kids Program
One out of 10 California children is presently uninsured. That could
change if the legislature approves, and the Governor signs, legislation
that has moved this year through the Senate and the Assembly.
Authored by Assembly members Wilma Chan and Dario Frommer (AB 772)
and Senators Martha Escutia, Elaine Alquist, Don Perata, and Carol Midgen
(SB 437), the legislation would provide health insurance to every California
child. Each of the two measures passed in their house of origin and
must now win approval by the other house before going to the governor.
This is such an important goal because when children receive timely
check ups and care, all Californians benefit: healthier children perform
better in school and are less likely to need expensive treatment in
emergency rooms.
Both bills target the increasing number of middle-class families whose
children are not covered by employer-based insurance or who can no longer
afford to purchase insurance. Low-income families who would bene-fit
from the bills would see more available information, less complicated
application procedures, and would have a one-stop entry into the health
care system. It is estimated that about 55% of uninsured children already
qualify for some public program, such as Medi-Cal or Healthy Families.
County-wide efforts have stepped ahead of the state and have cobbled
together various public and private monies to create more comprehensive
health services for children. AB 772 and SB 437, both of which are “concept”
bills, set the stage for later securing state money that would cover
between 800,000-1,000,000 children who are still without health coverage.
About 20% of uninsured children are citizens or permanent residents
who are ineligible for current public programs because their family
income exceeds the limits of these programs. Another 19% are children
who are ineligible because of immigration status.
AB 48 (Lieber) Would Increase Minimum Wage
There have been several articles in the past few months that have talked
about the fact that those in the upper 2% tax bracket are collectively
paying the greatest share of the state’s income tax.. The implication
has been that this group plays a major part in supporting the public
services upon which low-income people depend.
At the same time those of us in the middle class have a sense that
we are doing the lion’s share of supporting those less fortunate
than ourselves. As a matter of fact, as the percentage of corporate
income tax has diminished, the percent for those who pay personal income
tax has increased.
It was a Republican friend who framed the discussion of “who
supports the economy” in a different way. “It is the low-wage
workers who subsidize the rest of us,” she said. “Think
about it. If we had to pay for a hamburger at our local fast food restaurant
what that hamburger would cost if everyone from the farmer to the person
waiting on you were paid a living wage, we wouldn’t be paying
$2 for a hamburger.”
The difference in cost is made up by those who work for amounts far
less than it takes to provide the basics for their families.
The number of America’s working poor has grown because wages
have failed to keep pace with the cost of living over the last three
decades. The federal minimum wage, which in 1968 stood at 86% of the
official poverty line for a family of four, would have to go from the
current $5.15 an hour to $8.20 an hour simply to meet the federal poverty
level.
In California the minimum wage is $6.75 per hour--of annual family
earnings of $14,040 (if you don’t take out 2 weeks vacation).
If one can find a two bedroom apartment for $800 per month (or $9,600
a year) that would leave $370 per month for food, transportation, child
care (for a single parent), utilities, telephone, health care, etc.
The argument against increasing the minimum wage is that businesses
would raise their prices (or lay off workers) which would hurt the people
that we are trying to help. On the other hand, the employer’s
additional costs can be absorbed by a much wider group than the employees
that are currently “subsidizing” with their low wages.
Decent wages would shrink the need for government to provide a wider
and wider safety net as more and more working people are unable to pay
for child care, health care, and sometimes food and housing. As employers
have made their “savings” through the low-wages of their
employees, public support of the safety net has expanded.
Assemblymember Sally Lieber’s AB 48 is this year’s effort
at increasing the minimum wage. The bill which would increase the minimum
wage to $7.25 per hour in 2006 , and to $7.75 per hour in 2007. It includes
an inflation factor that would automatically adjust the minimum wage
each year.
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