Social Services Caseload Projections

Caseload Projections Are Reasonable. Figure 5 shows the recent trends and the projections in the Governor’s budget of annual caseload growth for the state’s major social services programs. As the figure shows, the CalWORKs and Food Stamps caseloads are projected to rise much faster than in recent years, largely due to the recession. In general, we find that these caseload projections are reasonable. Below, we discuss certain caseload trends that warrant close monitoring.

CalWORKs. In November 2008, we forecasted caseload increases in CalWORKs of 3.7 percent in 2008–09 and 2.4 percent in 2009–10. Our projections were based on the data available to us through July 2008 showing that the caseload was increasing by about 0.3 percent per month, or 3.6 percent per year. More recent data through October 2008 indicate that the caseload is now increasing at a rate of 0.6 percent per month, or 7.2 percent per year. The Governor’s forecast is very much in line with the latest quarter of actual data.

The key questions are how long will the recession persist, and when will the CalWORKs caseload stop growing so fast? How the economy affects the CalWORKs program could prove difficult to project. Since enactment of the welfare reform legislation in 1996 that resulted in the creation of CalWORKs, there has only been one relatively mild recession (in 2001–02). The associated caseload increase in that recession was modest and short–lived.

CalWORKs Child Care. Another caseload issue to watch in CalWORKs is child care utilization. The Governor’s budget assumes that utilization rates will remain at current levels. It is possible that, in a recession, less of the caseload will be working, and therefore utilization of child care services may fall. On the other hand, members of families enrolled in CalWORKs who cannot find work are still expected to participate in education or training, and thus would still need some child care for these purposes. The key question is how much child care they will need.

CAPI Caseload May Be Underestimated. The Governor’s budget proposes to eliminate CAPI to achieve annual General Fund savings of $130 million. Our review of recent actual data suggest that the CAPI caseload may be growing at a faster rate than the Governor has assumed. (This means the effective savings from the Governor’s proposal could be larger if it is adopted, but that the costs of the program could be larger than budgeted if the Legislature decides to preserve the program.) We will monitor this caseload and report at May Revision if any change to the caseload budget estimates for CAPI is warranted.