Judge Rebuffs Cost-of-Living Hike in Welfare

A judge on Friday dismissed an action by civil rights attorneys who argued that California law entitled welfare recipients to a cost-of-living increase because Gov. Arnold Schwarzenegger reduced vehicle license fees upon taking office.

Superior Court Judge James L. Warren invited attorneys representing welfare recipients to amend their petition and refile it.

“This is not easy, and it is important,” Warren said to the lawyers at the conclusion of a one-hour hearing.

The court case revolved around 1998 legislation linking a cost-of-living adjustment for welfare recipients to reductions in the vehicle license fees. The logic was that when the state could afford to cut the so-called car tax, the treasury would be robust enough to warrant raising welfare payments.

The annual vehicle fees -- which are paid to the state Department of Motor Vehicles and then distributed by the state to cities and counties -- historically amounted to 2% of the estimated value of the vehicle.

But lawmakers reduced the fees by 25%, starting in 1999, with the potential for cutting them more whenever there was enough money.

The fees became highly politicized during last year’s budget fight when then-Gov. Gray Davis tripled the fees to combat the state budget shortfall.

In November, immediately after he was sworn in, Schwarzenegger fulfilled a campaign promise and rescinded the license fee increase.

On Dec. 2, attorneys for the Western Center on Law and Poverty in Los Angeles and the Lawyers’ Committee for Civil Rights of the San Francisco Bay Area asked the court to force the state to increase the welfare payments for most families of three from $704 to $729 a month.

They contend that Schwarzenegger’s action amounts to a fee reduction that should trigger a welfare payment increase.

“I believe [the law] was intended to link the fortunes of welfare recipients to those of motorists,” said Clare Pastore, attorney for the law and poverty center.

Initially, the administration agreed, but on further legal review decided that the welfare increase was not justified.

State officials said the $25 monthly cost-of-living hike sought by the plaintiffs would have cost the state $120 million this year and several hundred million dollars over the next few years.

The state attorney general’s office successfully argued that the statutory conditions that would trigger a cost-of-living increase were not met -- and that Schwarzenegger’s action was merely undoing Davis’ action, not granting “extra relief” to motorists.

“It doesn’t say you get a cost-of-living increase when there is an increase in tax relief pursuant to an executive order” by the governor, Deputy Atty. Gen. Karin Schwartz told the judge.

Attorneys for the plaintiffs said they would resubmit an amended petition for consideration in the coming weeks.