California May Cut 2 CalWORKS Programs Over Budget Deficit, Potentially Affecting Thousands of Families

Joy Perrin had been living in a van with her two children for several months when she walked into a welfare office in 2018. She had left an abusive partner and had failed her first semester at Laney College in Oakland.

A social worker told Perrin she qualified for the CalWORKS family stabilization program, which provides cash assistance, transitional housing and counseling to families experiencing crises such as domestic violence, substance abuse, or the risk of homelessness.

Five years later, Perrin spoke to lawmakers on March 20, trying to save the program that helped her find a safe home and achieve an associate’s degree in biology.

“This program gave me the opportunity to show my children that poverty doesn’t have to be our name,” said Perrin, who plans to study radiology. “Not only am I a testament of the power of this program, but my children will be able to share their stories and how it can change their path to their future.”

Because California faces a projected budget shortfall of $38 billion to $73 billion, Gov. Gavin Newsom in January proposed cuts that would wipe out funding for the family stabilization program and for another CalWORKS program that subsidizes jobs for lower-income recipients.

Both cuts would undermine CalWORKS’ effectiveness, advocates say, and contradict the governor’s stated goals of helping move families out of poverty.

The family stabilization program serves more than 31,000 people. The extended subsidized employment program reaches about 8,000 participants a month. In total 354,000 households with 659,000 children receive CalWORKS benefits a year.

CalWORKS cuts

To shrink CalWORKS’ $7 billion annual budget, Newsom would take away what’s left of the $55 million from family stabilization this year and $71 million next year and $134 million each year from the expanded subsidized employment program — along with other cuts.

Some lawmakers are resisting.

Assemblymember Corey Jackson, the Moreno Valley Democrat who chairs the Assembly’s Human Services Committee, held the recent hearing to make clear how many people would be hurt.

He told CalMatters he opposes “a vast majority” of Newsom’s proposed cuts to CalWORKS and is seeking alternatives.

“The question is no longer whether something is a good program; the question is whether it is more important than another,” Jackson said. “CalWORKS is one of the most important programs that the state has. Very few can compete with it from a priorities perspective.”

State senators recently proposed shrinking the state budget shortfall by trimming current-year allocations. They agreed with Newsom’s plan to take back $336 million from CalWORKs, saying the money “is projected to be unexpended and should have no programmatic impact.”

But that doesn’t mean the cuts are set in stone. Newsom’s administration has proposed “a number of solutions across state government,” said H.D. Palmer, a spokesperson for Newsom’s finance department, including some funding for both CalWORKS programs.

The nonpartisan Legislative Analyst’s Office is also recommending reducing CalWORKS funding to reflect “consistently unspent funds,” said Sonia Russo, a policy analyst there. Almost $40 million a year remains unspent in the subsidized employment program, she said, though the family stabilization program spends all of its funds each year.

A family’s lifeline

Part of the federal Temporary Assistance for Needy Families program, generally known as welfare, CalWORKS requires recipients to get a job or participate in activities intended to lead to employment.

Its subsidized employment program helps people transition off public assistance by placing them into jobs and paying part of their wages.

At the height of the pandemic, the subsidized employment program’s caseload dropped, largely due to worksite closures and restrictions. But it began rebounding in 2021 and this year increased again, though still below pre-pandemic levels.

Lizbet Paz Alegria, a program participant, said it’s a lifeline for many who need it.

Paz Alegria, a Mexican-born immigrant, sought CalWORKS help in 2022 because her husband at the time had lost his job. Bills were piling up and she and her three children needed to escape domestic violence, she said.

The subsidized employment program gave her a job at a San Mateo County resource center, where she helps other Spanish-speaking CalWORKS participants find employment.

“I was so grateful, because I was placed in a position to welcome families,” she told CalMatters, “and they see in me someone who has walked in their shoes, who knows that feeling of desperation.”

Paz Alegria is a permanent resident who immigrated more than two decades ago. Many other immigrants do not qualify for CalWORKS benefits because they are undocumented or have legal status but have lived fewer than five years in the U.S.

CalWORKS bases its grants on the number of eligible family members in a household. The average cash grant was $1,021 a month last year, though families living in high-cost coastal counties, such as Los Angeles and San Francisco, received 5% more than families in inland counties, such as Shasta and Fresno.

In Fresno County, where poverty is nearly 19% higher than the rest of the state, more than 8,000 people received employment services from CalWORKS last year, said Maria Rodriguez-Lopez, the county’s deputy director of employment services.

The county contracts with the Marjaree Mason Center to help domestic violence victims. Last year the center handled 8,748 domestic violence cases, Rodriquez-Lopez said, and more than 500 people, including 257 children, participated in the family stabilization program.

“If funding is terminated, the risk of transitioning out of this contract is high,” Rodriguez-Lopez said. “However our department will make every attempt to mitigate the negative consequences to our families.”

A question of priorities

Jackson said the state has an obligation to prevent its vulnerable population from plunging further into a financial crisis. Last year California’s poverty rate grew from 11.7% in 2021 to 13.2%, with 5 million people living in poverty, according to the Public Policy Institute.

“I agree there must be cuts,” Jackson said. “The only question is where and whether we accomplish this through a just process.”

Jackson said he and other lawmakers have asked Assembly Speaker Robert Rivas to “not rush the process so people are not hurt due to political theater.”

Advocacy groups and nonprofits wrote a joint letter to legislative leaders predicting the cuts won’t save money but will instead cost the state: “Every $1 in CalWORKs received by a family saves the state $8 by preventing increases in child protective services, worsened children and parents’ health, and reductions in future education, employment and earnings,” it said.

State Sen. Scott Weiner, the San Francisco Democrat who chairs the Senate Budget Committee, said it will release a budget package later this spring. “Our goal will be to protect our progress for California and mitigate any impact on core program improvements of recent years, including CalWORKS.”