U.S. May Scrap State Homeless Plan as Unfair

Times Staff Writer

A $40-million state program to aid 30,000 homeless families will be scrapped or delayed beyond its Feb. 1 start-up date because the federal government says the program discriminates against other poor people and is refusing to provide its share of the funding.

The U.S. Department of Health and Human Services, in a letter to state Social Services Director Linda S. McMahon, said California's plan for providing housing assistance through the federal Aid to Families With Dependent Children program is unacceptable because it "does not appear to provide for equitable treatment of all (AFDC) applicants."

Negotiations Planned

In essence, the federal government's complaint is that by offering larger AFDC grants to homeless families, the state would be discriminating against other AFDC families who are not homeless.

An aide to McMahon said Wednesday that the state plans to negotiate with the federal government and, if that effort fails, may appeal the decision. Even if successful, however, the appeal could take up to six months. That would be long past the projected February start-up date and after the winter months, when welfare advocates say housing assistance is most critical.

Casey McKeever, Northern California director of the Western Center on Law and Poverty, which lobbied for the program, decried the federal denial as "a mean-spirited attack on an especially vulnerable population."

"Plainly, the (federal government's) positions make absolutely no sense," McKeever said. "They reflect a convoluted and strained effort to find a reason to disapprove California's first and only significant effort to address the serious crisis of homelessness among families with children."

The homeless families program was authorized last year by state legislation drafted and signed into law as the result of a major court victory that welfare advocates won against the Administration of Gov. George Deukmejian. The appellate court ruling required the state to provide emergency aid as part of its Child Welfare Services to entire families rather than just to abused or neglected children who had been removed from their homes.

Costly Solution

To avoid what would have been a much more costly solution, the Deukmejian Administration and lawmakers agreed to a compromise that would provide benefits to the homeless under AFDC--where the federal government pays 50% of all costs--rather than under Child Welfare Services.

Officials said they know of no other state in the nation that has proposed to use AFDC to help the homeless.

The compromise plan called for providing homeless families with payments ranging from $30 to $60 per day for temporary shelter as well as permanent housing payments to cover the cost of the last month's rent and other deposits normally required to rent a home or apartment.

The state already provides $4 million for emergency shelters and has ordered its National Guard armories to be available during cold spells. Some cities and counties finance their own programs for the homeless. But the proposal rejected by the federal government was to be California's only statewide effort to deal specifically with homeless families.

Contingent on Approval

The legislation required the program to begin Feb. 1, but implementation was contingent on federal approval.

In the letter to the state, Sharon M. Fujii, regional administrator of the Department of Health and Human Services, said the permanent housing benefit violated federal regulations because the rent deposits and other aid offered to the homeless would not be available to all AFDC recipients, including some who might be moving from one residence to another.

If the state were to drop the housing benefit from its plan, welfare advocates said, the remainder of the program dealing with emergency aid would do nothing to help the homeless get off the streets permanently.

"The whole direction of the homeless movement is to put people out of the shelters and into homes," McKeever said.

Federal officials also questioned a key eligibility requirement of the program, that applicants may have no more than $100 in savings before applying. According to Fujii, that could result in cases where homeless families with no savings but a sufficiently high income qualify for the aid while others who have saved some money but have no steady income would be denied.

"Our preliminary review indicates this is inconsistent with the provisions and purposes of the Social Security Act," Fujii wrote.

Should the state fail to persuade the federal government to drop its objections, welfare advocates said they might sue to overturn the federal decision or seek a court order forcing the state to finance the program on its own.

Assemblyman Phillip Isenberg (D-Sacramento), who authored the homeless family legislation, said implementing the program as originally ordered by the courts could cost the state as much as $75 million.

"The costs could be staggering," Isenberg said.

Kathleen Norris, spokeswoman for the state Department of Social Services, said the state is "proceeding on the assumption that the federal government will ultimately approve the project. . . . The only thing I can say is that it is in negotiations."

Not Optimistic

One federal official familiar with California's application was not optimistic that the state would revise its application in a way that would be acceptable to the Department of Health and Human Services. "They told us it would cost a lot of money and they may not want to do it," said the official, who spoke on the condition that his name not be used.

Isenberg also expressed little optimism that the state would prevail. "It looks like they are raising problems that are not technical. Just from reading their letter, my gut tells me it will be difficult to turn them around."

Meanwhile, the California National Guard announced Wednesday that it has been directed by the governor's office to open armories as temporary shelters for the homeless on all rainy nights when the temperature drops below 50 degrees, or on any night when the temperature drops below 40. The governor's previous order opened the armories only when temperatures dropped to 40 degrees or below.

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