Legislative Analyst's Office The 2002-03 Budget Bill: Perspectives and Issues

Welfare-to-Work Participation in the CalWORKs Program

Background

In response to the 1996 federal welfare reform legislation, the Legislature created the California Work Opportunity and Responsibility to Kids (CalWORKs) program, enacted by Chapter 270, Statutes of 1997 (AB 1542; Ducheny, Ashburn, Thompson, and Maddy). CalWORKs replaced the Aid to Families with Dependent Children (AFDC) entitlement program with a welfare-to-work program requiring able-bodied adult recipients to work or engage in some type of work-related education or training activity in exchange for cash assistance.

Ensuring that CalWORKs recipients are actually participating in welfare-to-work activities is important for three primary reasons. First, participation data can give the Legislature a sense of how effectively counties have implemented the CalWORKs program and, more specifically, are enforcing the work-first approach envisioned in the CalWORKs statute. Second, because CalWORKs was designed as a temporary program, ensuring that recipients receive the employment services and work experience they need before they reach their five-year lifetime limit on aid may be critical to their reaching self-sufficiency. Finally, in order to avoid federal penalties and to maintain maximum General Fund spending flexibility, California must ensure that it meets the federal participation requirements.

Federal Participation Requirement

Federal law—the Personal Responsibility and Work Opportunity Reconciliation Act of 1996 (PRWORA)—does not impose specific participation requirements on individuals. However, in order to hold states accountable for moving families from welfare to work, the federal law does require states to meet statewide participation rates. Figure 1 illustrates how the federal participation requirements have increased (as specified in PRWORA) since federal fiscal year (FFY) 1997 (October 1996 through September 1997). The figure also shows how the caseload reduction credit significantly reduces the statutorily required levels of participation.

Caseload Reduction Credit

Federal regulations allow states to reduce the required participation rate by applying a caseload reduction credit. This adjustment is based on the percentage decline in each state's welfare caseload since FFY 1995. It is designed to give "credit" to states that have moved families into work and off of cash assistance. Caseload reductions due to federal or state eligibility changes are not counted towards the credit. California, like most states, has experienced a significant caseload decline since FFY 1995 (over 40 percent through FFY 2001). Consequently, the caseload reduction credit has resulted in significantly lower adjusted participation requirements for California, as shown in Figure 1.

What Counts as Participation?

Federal regulations set forth the amount and types of work activities in which individuals must participate in order to be counted towards the state's participation rate. As shown in Figure 2, in order to be counted, adults in two-parent families must participate for a combined total of at least 35 hours per week. Single parents with children over age 6 must participate an average of at least 30 hours per week, while single parents with a child under age 6 are required to participate 20 hours per week. (We note that in California, approximately 58 percent of single-parent cases have a child under age 6.) States also have the option to exempt single parents of a child under 12 months from participation, and disregard these cases in determining their participation rates.

State and federal law prescribe the various types of work activities that qualify as participation. Figure 3  next  lists these activities.

Federal Penalties for Noncompliance

States that fail to meet the federal participation rates are subject to a penalty of up to 5 percent of the state's block grant. The penalty increases by 2 percentage points each consecutive year of noncompliance, up to a maximum of 21 percent of the block grant. Depending on the degree of noncompliance—for example, how close the state came to meeting the participation requirement—the U.S. Department of Health and Human Services may reduce or waive the penalty.

As an additional incentive to meet the federal requirements, states that are in compliance are subject to a lower maintenance-of-effort (MOE) spending requirement (75 percent instead of 80 percent of their FFY 1994 welfare-related spending). In California, this means that if the state meets the participation rates, it has the option of reducing spending by $182 million each year.

California's Past Performance

Figure 1 shows California's actual participation rates since FFY 1997. For FFY 1997 through FFY 1999, California met the all-families participation requirement even without the caseload reduction credit. By contrast, California's two-parent participation rates in these years were well below the federal statutory requirements. The caseload reduction credit, however, enabled California to meet the adjusted rates for both the all-families and the two-parent families participation requirements for FFY 1997 through FFY 1999. By meeting both participation requirements, California was able to reduce state spending by approximately $182 million in each of those years.

Shift to a Separate State Program

For FFY 1997 through FFY 1999, the all-families rate included both single- and two-parent families. However, due to concern that California might not continue to meet the two-parent participation rate requirement, even with the caseload reduction factor, the state moved the two-parent caseload into a separate state-funded program in FFY 2000. Effective FFY 2000, therefore, the all-families rate includes only single-parent families. Separate state programs are not subject to many of the Temporary Aid to Needy Families (TANF) requirements, including the work participation requirement. Therefore, beginning in FFY 2000, the only applicable participation rate for California is the all-families rate, and only single-parent families are included in the calculation.

We note that shifting the two-parent caseload into a separate state-funded program did not result in additional General Fund costs above California's MOE spending requirement of $2.7 billion. This is because spending on the two-parent caseload falls within the $2.7 billion spending requirement. As a result, the reorganization was simply a budget-neutral shift of state and federal monies.

California's FFY 2000 Participation

Participation Rates. In FFY 2000 (the last year for which data are available), California's all-families participation rate was 27.5 percent, significantly lower than the required participation rate of 40 percent shown in Figure 1. However, California's caseload reduction credit was 32.1 percent, resulting in an adjusted participation rate requirement of only 7.9 percent (40 percent minus 32.1 percent).

Figure 1 also shows that the actual participation rates for all families dropped significantly from FFY 1999 (42.2 percent) to FFY 2000 (27.5 percent). This drop was largely a result of shifting the two-parent caseload, which has a relatively higher participation rate compared to one-parent families, into a separate state program. For example, in FFY 2000, the two-parent participation rate of 47.4 percent was approximately 20 percentage points higher than the single-parent rate. Had the two-parent caseload been excluded from the FFY 1999 calculation, the all-families rate that year would have been approximately 28 percent. Thus, it appears that from a federal perspective, participation among single-parent families remained relatively constant from FFY 1999 to FFY 2000.

How Participation Was Met. Of all those who met the federal participation requirement, a significant majority met it through unsubsidized employment (89 percent). Approximately 9 percent met the requirement through a combination of employment and other work-related activities, and the remainder met it solely through work-related activities. (For example, on-the-job training, vocational education and training, or community service.)

How Does California Compare to Other States?

Participation Rates. Federal fiscal year 1999 is the most recent year for which data are available to compare California's participation rates to those of other states. As Figure 4 shows, California's all-families participation rate of 42 percent was higher than the national average of 38 percent, while its two-parent family rate was just below the national average (54 percent compared to 55 percent). For the all-families rate, California ranked fourth among the ten largest states, behind Illinois, Ohio, and Michigan. For the two-parent family rate, California ranked sixth out of the seven largest states that included two-parent families in their TANF programs in FFY 1999.

Unsubsidized Employment. In terms of the percentage of all adults who worked in unsubsidized employment, California's rate of 41 percent was well above the national average of 28 percent, as shown in Figure 5. On this measure, California ranked second both among the ten largest states and overall.

California's high rate of participation in unsubsidized employment is in part due to the CalWORKs program's relatively high benefit levels, combined with a generous earned income disregard, whereby much of a recipient's income is disregarded for the purpose of determining the family's grant. Together, these policies allow recipients to work without immediately becoming income-ineligible for cash assistance. By contrast, in many other states full-time work results in too much income for the family to remain eligible for cash assistance.

CalWORKs Participation Requirements

Just as California must meet statewide federal participation requirements, state law requires able-bodied adults on aid to meet individual participation requirements or face sanctions for noncompliance. These individual requirements differ somewhat from the federal-participation standards in terms of both the number of hours required as well as which welfare-to-work activities qualify as participation.

In general, all nonexempt, single-parent adults are required to participate in welfare-to-work activities for an average of at least 32 hours per week. Adults in two-parent families must participate a total of at least 35 hours per week (with one parent participating at least 20 hours per week). The two-parent weekly requirement increases to 55 hours for families receiving federally-funded child care. Figure 2 compares the state and federal hourly participation requirements.

Although the CalWORKs hourly participation requirement is greater than the federal standard for single-parent families, the number of activities that count towards the CalWORKs requirement is also greater, making it somewhat easier to meet the CalWORKs participation requirement. However, there are some limits on which activities count towards the CalWORKs requirement. For example, after 24 months on assistance, recipients must meet their participation requirement through unsubsidized employment, community service, or a combination of the two. Figure 3 compares the qualifying welfare-to-work activities under both the state and federal definitions. 

Exemptions

The CalWORKs statute exempts some individuals from participation. In general, individuals are exempt if they are disabled, elderly, unable to work due to caretaking responsibilities, or pregnant. Single parents with a child under six months are also exempt (counties have some discretion to modify this time period). The law also permits counties to excuse nonexempt recipients from participation for "good cause." Conditions that may be considered good cause for not participating include, but are not limited to, domestic violence, mental disability, or a lack of necessary support services, including child care and transportation. Counties must establish procedures for making such determinations and must review individual determinations every three months.

Penalties for Noncompliance

Nonexempt individuals who fail to comply with participation requirements are subject to a financial sanction, meaning that the family's grant payment is reduced by the adult portion (about $131 for a family of three). Before the sanction may be imposed, however, the county welfare department must notify the individual, at which point the individual becomes formally noncompliant. The individual is then provided the opportunity to either demonstrate good cause for noncompliance or agree to a compliance plan to cure the pending sanction.

Are Able-Bodied Recipients Meeting Their Participation Requirement?

Data Limitations. We note that there are certain limitations to the two principal data sources used to analyze CalWORKs participation. Specifically, one data source is designed for federal reporting purposes, and therefore likely underreports participation in activities that count only under the CalWORKs definition. The second data source, which does capture CalWORKs-specific information, does not capture the actual number of hours of participation. This data source may also underreport participation in work activities other than unsubsidized employment. Finally, both data sources are designed to capture point-in-time participation information for a given month and cannot track an individual's participation over time. Taken together, we believe that the data limitations likely result in a modest bias for underreporting of participation. We discuss the data findings below.

Single-Parent Families. The average monthly caseload of single-parent families receiving cash assistance in FFY 2000 was about 310,000. Figure 6 shows that 26 percent of the total caseload met the CalWORKs participation requirement. Of these, nearly 70 percent did so through unsubsidized employment, while 27 percent met the requirement through other welfare-to-work activities, including community service. The remainder met the requirement through a combination of activities and unsubsidized employment.

An additional 20 percent of the total caseload participated for some hours, but not enough to meet the participation requirements. Approximately 12 percent of the caseload was exempt from participation requirements, while an additional 2 percent were formally noncompliant but had established good cause for not participating.

Finally, 40 percent of the caseload did not participate at all. This includes sanctioned cases or cases with a pending sanction (18 percent of the total caseload) and cases that were essentially unaccounted for—that is, they were neither participating, exempt, nor sanctioned (22 percent). We refer to these cases as "disengaged" from the program. Later we discuss the implications of and possible explanations for these participation figures.

Two-Parent Families. The average monthly caseload of two-parent families in FFY 2000 was about 65,000. By definition, both adults in two-parent families must be able-bodied and therefore are not exempt from the work participation requirement. As seen in Figure 7, 48 percent of the two-parent cases met the CalWORKs participation requirement. Of these cases, the majority (85 percent) met the requirement solely through unsubsidized employment. An additional 29 percent of the caseload participated in some activity but for insufficient hours to meet the requirement. Finally, nearly one-quarter of the two-parent caseload—22 percent—had zero hours of participation. 

Unlike single-parent families, it is not possible to determine how many of the two-parent cases with zero hours of participation were in sanction (or sanction pending) status, how many had good cause for not participating, and how many were disengaged from the program. This is due to data limitations that the Department of Social Services indicates will be corrected for the FFY 2001 participation data.

Regional Variation. The sample size and sampling methodology used by the department to calculate the participation rates do not permit county-by-county analysis or detailed regional comparisons. However, it is possible to compare Los Angeles County, which accounted for approximately 38 percent of the CalWORKs caseload in FFY 2000, to the rest of the state. The FFY 2000 comparisons show little difference between Los Angeles and the rest of the state. Los Angeles had a slightly higher two-parent participation rate (49 percent versus 48 percent for the rest of the state), and a slightly lower single-parent rate (24 percent versus 28 percent for the rest of the state).

Summary

The figures presented above suggest a mixed story. On the one hand, California has met the federal participation requirements each year since the enactment of PRWORA, thus avoiding federal penalties. Further, the rate of participation—particularly in unsubsidized employment—among CalWORKs recipients is greater than under any of California's previous welfare programs. For example, in FFY 1996, under the AFDC program, about 19 percent of all aided adults had some earnings. In FFY 2000, that figure increased to 44 percent. California's performance is also impressive compared to other states. As discussed above, in FFY 1999 California ranked second in terms of the percentage of adult recipients in unsubsidized employment. California also ranked above average in terms of overall participation among all families. Thus, compared to both past performance as well as the experience in other states, California's participation rates are encouraging.

On the other hand, given the CalWORKs goal of universal participation among able-bodied adults, California's participation rates are much lower than would be expected. The percentage of able-bodied adults who are not participating is of particular concern. Figures 6 and 7 show the participation status for single- and two-parent families, respectively. When we examine the participation status for both groups together, we find that, among all nonexempt adults:

• 33 percent are meeting their work participation requirements;
• 24 percent are participating but for insufficient hours to meet their requirements; and
• 43 percent are not participating at all.

While some of the nonparticipating adults are sanctioned or have a pending sanction for noncompliance, it is clear that a significant number of recipients are essentially disengaged from the CalWORKs program—that is, they are neither participating in welfare-to-work activities, nor facing penalties for noncompliance. Thus, although California's performance is comparable if not better than that of other states, the state clearly has room for improvement in terms of both engaging more recipients, as well as increasing the work effort of those who are participating but are doing so with too few hours to satisfy their participation requirements.

What Explains California's Participation Rates?

As discussed above, the number of CalWORKs recipients who are (1) participating with insufficient hours to meet their participation requirements or (2) not participating at all is higher than would be expected given that one of the primary goals of the CalWORKs program is universal participation among able-bodied recipients. We have identified a number of factors that explain California's relatively low participation rates. These include the dynamic nature of the CalWORKs caseload, the CalWORKs sanction policy, and county enforcement of the participation requirement.

A Dynamic Caseload. We note that a certain number of disengaged cases—cases that are neither participating, nor in a formal noncompliance or sanction status—is to be expected, given the dynamic nature of the CalWORKs caseload. Specifically, in a given month, new cases represent approximately 8 percent of the caseload. The lag times between when applications are approved and when the new recipients actually start participating means that some cases will appear to be disengaged in a given month, even if the recipients are complying with program requirements. Similarly for existing cases, the lag time between when referrals for certain activities are made and when the recipient actually participates in (and completes) those activities also means that some compliant cases will report no participation in a given month. These cases are not sanctioned because their case workers expect them to report participation in the following month.

We recognize that a certain number of recipients might not be accounted for in a given month. However, we believe that the 22 percent figure for the single-parent caseload—more than one-fifth of the caseload—is higher than expected given California's relatively strong work requirements. Specifically, such a high figure suggests that a significant number of CalWORKs recipients have little contact with their county welfare department, and consequently are neither participating in welfare-to-work activities nor receiving penalties for failure to do so. In other words, county welfare departments are probably not fully engaging all clients as intended by the Legislature.

The CalWORKs Sanction Policy. Before imposing a sanction for failure to comply with program requirements, the county welfare department must initiate a conciliation process to address a recipient's noncompliance. The statute's due process provisions, which allow recipients a certain length of time by which to come into compliance, mean that financial penalties may not be imposed until several months after the incidence of noncompliance. The second process evaluation of CalWORKs implementation, conducted by RAND, reported that some case workers believe that this lengthy sanction process significantly weakens the impact of the sanction policy on recipients' behavior. Our interviews with county staff confirmed this finding.

Additionally, many of the case workers and managers we talked to indicated that they believe the sanction amount—equal to the adult portion of the family's grant payment—does not represent a large enough penalty to induce participation. In other words, these staff believed that even if the sanction were imposed, the recipient's behavior would not change. Given their concerns that the current sanction policy has limited effect on recipients' behavior, case workers in some counties are reluctant to initiate what is a very time-consuming sanction process.

It therefore appears that, at least in some counties, the reluctance on the part of some case workers to initiate the sanction process may explain a certain number of disengaged cases.

County Enforcement of the Participation Requirement. Finally, based on our interviews with county staff, it appears that county expectations about a reasonable participation effort are sometimes lower than the CalWORKs hourly requirements. Specifically, staff in some of the counties we visited indicated that recipients who are participating, but for insufficient hours to meet their requirement, are not always required to fulfill the remaining hours of their requirement. For example, some case workers we talked to would not necessarily require a recipient who is working 25 hours to meet the remaining required hours by participating in community service activities. Instead, these staff indicated that they focus their time and the available employment service resources on those recipients who are not participating at all. Thus, to the extent that some counties do not strictly enforce the CalWORKs hourly participation requirement, the statewide percentage of recipients who are meeting their requirement will be lower than expected.

Budget and Policy Implications

California's participation rates raise several budget and policy implications. We identify three approaches the Legislature could consider in addressing welfare-to-work participation in the CalWORKs program. These include (1) increasing participation, (2) prioritizing welfare-to-work resources, and (3) doing nothing to change current policy and county practice. Each approach has advantages and disadvantages, which we discuss below.

We note that, in considering the following options, the Legislature should be aware of the fiscal pressures within the CalWORKs program. Specifically, as discussed in our Analysis of the 2002-03 Budget Bill, in certain counties (representing about 50 percent of the statewide caseload) the CalWORKs welfare-to-work component is underfunded in the current year. Because the Governor proposes to freeze budget-year funding for the welfare-to-work component—in order to maintain CalWORKs spending within available resources—this underfunding would persist in 2002-03. As we noted in our Analysis, funding pressures within CalWORKs are likely to intensify in future years for several reasons, including the potential for continued caseload increases. These pressures would result in continued underfunding of the program's welfare-to-work component, which in turn may result in fewer services available for families trying to become self-sufficient prior to reaching their time limit on cash assistance.

Focus on Increasing Participation

Given the CalWORKs lifetime limit on aid, the Legislature may want to focus on increasing participation in order to ensure that recipients receive the employment services they need to make the transition from welfare to work as quickly as possible. Strategies to increase participation include increasing available employment services targeted specifically to recipients with multiple barriers to participation.

Strengthening the sanction policy for noncompliance may also increase participation. Examples of strengthening the sanction policy include implementing a graduated sanction policy, where multiple months of noncompliance eventually lead to a full-family sanction. Another approach would link grant payments to actual hours of participation. Under such a "pay-for-participation" policy, grants would be reduced for every hour of participation below the required number of hours. Thus, for example, a recipient who participates an average of only 16 hours per week instead of 32 hours per week in a given month would receive only half the grant amount the family would otherwise receive. Wisconsin's grant payments are based on a similar approach.

A third strategy to increase participation would involve implementing penalties for counties that have relatively high rates of disengaged cases. To ensure that counties continue their efforts to increase participation without simply increasing sanction rates, a county could also face penalties for high sanction-to-participation rate ratios.

Advantages. The primary advantage of focusing on higher participation rates is that it would help ensure that recipients who are facing the five-year lifetime limit on cash assistance receive the services they need to become self-sufficient as quickly as possible. We note that only adult recipients face a time limit on assistance. Thus, if the family were to remain income-eligible for CalWORKs, the family will still receive assistance on behalf of the children even after the adult has reached their time limit. Therefore, to the extent that increasing participation leads to more families eventually leaving cash assistance altogether, this approach could also achieve long-term program savings.

Disadvantages. The primary disadvantage of this approach is that increasing participation may require a higher level of investment in the program's welfare-to-work component. Some of the county staff we talked to indicated that achieving higher participation rates would require increased funding for both county administration and direct employment services costs. As noted above, in certain counties the welfare-to-work component is underfunded. In our Analysis of the 2002-03 Budget, we further noted that the additional current-year cost of bringing all counties up to a minimum funding standard would be approximately $125 million. (We calculated this minimum standard based on 1999-00 allocations to Riverside and San Bernardino Counties, both of which have relatively high participation rates.)

Prioritize Welfare-to-Work Resources

As noted earlier, while states must meet statewide participation rates, the federal regulations do not impose specific participation requirements on individuals. California therefore has flexibility in both determining the number of hours that individuals are required to participate, and granting exemptions from the participation requirement for certain individuals (for example, parents of very young children or elderly recipients). As shown in Figure 1, for FFY 2000, California exceeded the federal participation rate requirement for all families by nearly 20 percentage points. As a result of the caseload reduction credit, California is likely to continue to meet (and exceed) the federal rate even if its participation rates were to drop significantly. Consequently, the Legislature has several options for prioritizing available welfare-to-work resources in terms of which recipients are required to participate in welfare-to-work activities and for how many hours.

For example, the Legislature could align the number of hours of participation required under CalWORKs with the federal participation standards. As shown in Figure 2, the CalWORKs hourly participation requirement for single-parent families is higher than the required federal rate. The difference is particularly significant for families with a child under age 6 (32 hours versus 20 hours), and this group constitutes approximately 58 percent of all CalWORKs families. Adopting the federal participation standard would likely result in significant savings in child care, other employment services, and associated administration. This is because some families who are currently participating for more than 20 hours would choose to reduce their hours of participation.

Similarly, adopting the federal option to exempt single parents with a child under 12 months from participation could also result in savings. The current state standard is a 6-month exemption for the first child, and 12 weeks for subsequent children born while on assistance. Counties have the option to extend the exemption period for up to 12 months for the first child and for up to 6 months for subsequent children. While the majority of counties do provide for the maximum allowable exemption period under state law, some do not. Consequently, some savings could be achieved by amending state law to automatically exempt all single parents with a child under 12 months, regardless of the number of children born while on assistance. We note that because infant care is more expensive and more difficult to obtain than noninfant care, adopting this federal option could result in significant child care savings.

In addition to aligning the CalWORKs participation requirements with the federal standards, the Legislature could also consider exempting more individuals from the participation requirement. This could be achieved by either (1) statutorily exempting certain individuals or (2) giving counties discretion to exempt individuals as they deem appropriate. This approach would also result in administrative, child care, and other employment services savings. We note that this approach would impact California's federal participation rate. However, as described above, California currently easily exceeds the federal participation rate requirement (due to the caseload reduction credit). Thus, even if California's participation rates were somewhat lower than the current rates, California would not risk a federal penalty for failing to meet the federal requirement.

To ensure that California continues meeting the federal participation rate, counties could be held to a minimum participation standard. However, as long as they met that standard, they would have flexibility to decide how to target their available welfare-to-work resources. For example, some counties may decide to exempt all individuals with a child under age 2, or to not require individuals who are working at least 20 hours per week to participate in additional activities in order to meet the hourly requirement.

Advantages. The primary advantage of either (1) aligning the CalWORKs requirements with the federal standards or (2) exempting more individuals from the participation requirement is that the resulting savings would relieve funding pressures within the welfare-to-work component of the CalWORKs budget.

Disadvantages. The primary disadvantage of prioritizing welfare-to-work resources for certain families is that some families may not receive the welfare-to-work services they need in order to reach self-sufficiency before they reach their 60-month lifetime limit on cash assistance. Additionally, exempting more individuals from the participation requirement may weaken the work-first message of the CalWORKs program. Finally, giving counties additional discretion to exempt certain individuals raises the concern that similar families would be subject to different program requirements and penalties depending on their county of residence.

Wait and See

Finally, the Legislature could do nothing to change current policy and county practice. CalWORKs is a relatively young program and counties have just recently built up their capacity to operate the welfare-to-work component envisioned in the CalWORKs statute. The effects of the recent recession on both the CalWORKs caseload trends and the ability of recipients and former recipients to find and retain employment are still unknown. It is also unclear how federal welfare reform reauthorization, which is scheduled to happen by October 1, 2002, will impact the CalWORKs program. The issues under debate at the federal level include both the level of federal funding that will be available to the states, as well as whether to change federal participation requirements. Given these uncertainties, the Legislature could adopt a wait and see approach, allowing the program to run its course through the recession, while awaiting the outcomes of reauthorization.

Advantages. Waiting until federal reauthorization to reexamine CalWORKs policy would be the least disruptive approach. Moreover, given the state's fiscal condition, retaining current policy and county practice would require no additional funding for the CalWORKs program.

Disadvantage. The primary disadvantage of the wait and see approach is that a significant number of CalWORKs families may continue to use up their remaining months on assistance without receiving the necessary services they need to become self-sufficient.

Conclusion

The three approaches discussed above each have advantages and disadvantages. Because CalWORKs was designed as a time-limited, work-first program, we believe that increasing participation is an important long-term focus for the Legislature. However, as noted above, improving participation rates will likely require increased funding for the program's welfare-to-work component. Due to the state's fiscal situation, augmenting state spending in the CalWORKs program may not be feasible in 2002-03. Given these fiscal considerations, combined with the uncertain impact of federal welfare reform reauthorization on the CalWORKs program, we believe that the wait and see option may be the most appropriate short-term approach to addressing CalWORKs participation.