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Budget and Policy Post
November 22, 2021

The 2021-22 California Spending Plan

Human Services


CalWORKs


The California Work Opportunity and Responsibility to Kids (CalWORKs) program provides cash assistance, child care, and employment services to low-income families with children. As shown in Figures 1 and 2, the spending plan provides a total of $6.8 billion (all funds) to support the CalWORKs program in 2021‑22, an increase of about $665 million (11 percent) relative to estimated spending in 2020‑21. The year-over-year increase reflects a projected increase in CalWORKs caseload and various programmatic augmentations, as described below. Within the total funding amount, the spending plan provides $1.1 billion from the state General Fund for CalWORKs in 2021‑22, an increase of about $400 million (64 percent) relative to 2020‑21. Major changes in CalWORKs funding and policy included in the 2021‑22 spending package are described below. (We note that the augmentation to the CalWORKs Housing Support Program is described more fully in our recent post, The 2021‑22 Spending Plan: Housing and Homelessness.)

Figure 1

CalWORKs Budget Summary

All Funds (Dollars in Millions)

2020‑21

2021‑22

Change From 2020‑21 to 2021‑22

Amount

Percent

Number of CalWORKs Cases

$311,151

$358,110

$46,959

15%

Cash grants

$2,801

$3,506

$705

25%

Single Allocation

Employment services

$1,223

$1,135

‑$88

‑7%

Cal‑Learn case management

32

21

‑12

‑36

Eligibility determination and administration

648

675

26

4

 Subtotals

($1,904)

($1,831)

(‑$73)

(‑4%)

Stage 1 Child Carea

$486

$366

‑$120

‑25%

Other Allocations

COVID‑19 relief payments

$208

$203

‑$5

‑2%

Home Visiting Program

90

69

‑21

‑24

Housing Support Program

110

285

175

157

Other

311

312

1

 Subtotals

($720)

($869)

($149)

(21%)

Otherb

$4

$9

$6

152%

  Totals

$5,914

$6,580

$729

11%

aIn 2020‑21 and prior years, this was included in the single allocation. Starting in 2021‑22, it is proposed to be a separate allocation. We present it as a separate line item in both years for ease of comparison.

b Primarily includes various state‑level contracts.

CalWORKs = California Work Opportunity and Responsibility to Kids.

Figure 2

CalWORKs Funding Sources

(Dollars in Millions)

2020‑21

2021‑22

Change From 2020‑2021 to 2021‑22

Amount

Percent

Federal TANF block grant funds

$2,762

$2,800

$38

1%

General Fund

671

1,099

428

64

Realignment funds from local indigent health savings

921

746

‑176

‑19

Realignment funds dedicated to grant increases

394

727

333

85

Other county/realignment funds

1,166

1,208

42

4

 Totals

$5,914

$6,580

$665

11%

CalWORKs = California Work Opportunity and Responsibility to Kids and TANF = Temporary Assistance for Needy Families.

CalWORKs Caseload Estimates Much Lower Than Previous Budget Act. Generally speaking, CalWORKs caseload and costs increase during and following economic recessions and decrease during economic expansions. In response to the coronavirus disease 2019 (COVID-19) public health emergency and recession, the 2020‑21 Budget Act projected CalWORKs caseload to rapidly increase from what was then a historic low of about 360,000 to a historic high of 587,000 in 2020‑21. Contrary to these expectations, the latest data show CalWORKs caseload decreased rapidly at least through the first 18 months following the pandemic. Accordingly, the new spending plan estimates CalWORKs averaged a new historic low of about 310,000 in 2020‑21 and projects it to grow back to its pre-pandemic level of about 360,000 in 2021‑22.

Provides $1.8 Billion for CalWORKs Administration and Support Services. The state provides counties with a “single allocation” to cover most costs associated with CalWORKs aside from cash assistance. Counties are free to shift this funding between any of the supported functions, including CalWORKs administration and employment services (prior to 2021‑22, child care was also included in the single allocation). Generally speaking, single allocation funding is adjusted in rough proportion to changes in caseload. The spending plan, however, includes an additional $68.3 million ongoing to augment the single allocation above these caseload-driven amounts. This augmentation is intended to address concerns from some counties that funding for the single allocation would otherwise be insufficient to support required activities.

Increases the Availability of Intensive Case Management. Since 2019‑20, counties have received additional employment services funding for “intensive cases,” or individuals requiring exceptional support to overcome barriers to employment. These individuals typically receive more one-on-one assistance from county staff than other CalWORKs recipients, although the exact amount of support necessary to provide for these intensive cases was not defined under prior law. The spending plan provides additional funding to expand the availability of such intensive case management, and also defines intensive case management as consisting of at least ten hours of county staff time per month. Both the funding and the minimum time requirement are designed to ramp up gradually over four years, with funding beginning at $37.5 million in 2021‑22 and projected to reach $75 million in 2022‑23, $128.5 million in 2023‑24, and $257 million in 2024‑25 and beyond.

Funds Racial Equity and Implicit Bias Training for County CalWORKs Staff. The spending plan includes $3 million General Fund in 2021‑22 and $10 million in 2022‑23 to support racial equity training for CalWORKs county staff. The spending plan requires the Department of Social Services to enter into one or more contracts to develop and implement this training, with a focus on identifying and addressing various forms of racial bias.

Increases Grants by 5.3 Percent Using Local Revenue Growth. The spending plan includes $142 million in local revenue to fund a 5.3 percent increase to cash grants starting in October 2021. This increase was triggered and funded by revenue growth in the Child Poverty and Family Supplemental Subaccount, consistent with pre-existing state law.

Uses Federal Funding to Provide One-Time Payment to CalWORKs Families. The spending plan allocated $202 million from the federal Emergency Temporary Assistance for Needy Families (TANF) Fund (a form of COVID-19 relief which must be spent on one-time benefits to TANF-eligible families) to provide a $640 one-time benefit to each CalWORKs family on July 10, 2021. This built upon a $600 one-time payment to these families provided in 2020‑21 at a cost of $244 million General Fund.

Increases Benefits for Pregnant Women Receiving CalWORKs. Under prior state law, pregnant women who otherwise qualify for CalWORKs could receive a monthly supplemental aid payment of $47 beginning in their second trimester. The spending plan increases that amount to $100 and renders women immediately eligible for it upon verification of pregnancy (even if that comes before their second trimester) at an estimated ongoing cost of $17 million annually.

Increases Income Eligibility Threshold for CalWORKs Applicants. To qualify for CalWORKs, families must generally earn less than about 80 percent of the federal poverty level (the exact amount is specified in state law and varies based on family size). Under prior state law, the first $90 monthly per earner did not count towards a family’s income when applying for the program. The spending plan increases this to $450 beginning in March 2023—effectively increasing the number of individuals who are income-eligible for the program—at an estimated ongoing cost of $135 million annually.

Includes Two Changes to Overpayment Collections. Sometimes CalWORKs families receive monthly benefits above the amount they are supposed to receive. Often this happens because a family did not immediately report an increase in their monthly income. When these overpayments are discovered, they are typically repaid by reducing the family’s future benefits by 10 percent a month (or 5 percent, if the error was made by county administrators rather than the family itself). Under prior law, county officials were able to identify and begin collecting for any overpayments they discover, no matter how far in the past they were made. The spending plan restricts the time window for identifying overpayments to two years from the date the overpayment was made, and classifies all overpayments issued during the COVID-19 pandemic as being the result of administrator error (thereby reducing the monthly payment from 10 percent of the family’s grant to 5 percent).

Funds Statewide Promotional Campaign. The spending plan provides $2 million one-time General Fund to support a statewide promotional and media campaign intended to increase CalWORKs utilization.

Nutrition Assistance

Expands Nutrition Assistance to Some Previously Ineligible Immigrants. Under prior law, the California Food Assistance Program (CFAP) provides cash assistance for food to low-income Californians with legal residency status who have resided in the United States for less than five years. The 2021‑22 spending plan provides an increasing amount of ongoing General Fund to expand CFAP to new populations of immigrants. The funding increases from $5 million in 2021‑22 (intended for automation changes) to $25 million in 2022‑23 and about $280 million in 2023‑24 and beyond. Additional details about which specific populations will be served by this expansion are anticipated by 2023‑24.

Temporarily Increases CFAP Benefits During Public Health Emergency. Monthly CFAP benefits are equal to those provided by CalFresh, a federally funded nutrition assistance program with more restrictive immigration requirements. Recent federal legislation increased CalFresh benefits (1) to their maximum amount per household size for all recipients, and (2) by an additional 15 percent during the COVID-19 public health. The spending plan includes a total of $52 million one-time General Fund to support these same augmentations in CFAP across both 2020‑21 and 2021‑22.

Provides Augmented Funding for Food Banks. Figure 3 summarizes the major augmentations for food banks included in the spending plan. These augmentations total to about $300 million one-time General Fund.

Figure 3

2021‑22 Augmentations for Food Banks

General Fund (In Millions)

Proposal

Cost

Fund food bank infrastructure projects

$150

Augment funding for food purchases and logistics

80

Fund “disaster resiliency needs” for food banks

31

Diaper assistance for network of food and diaper banks

30

Fund building purchase for a Los Angeles food bank

6

Fund menstrual product pilot project in San Diego and Los Angeles

2

 Total

$299