Senate OKs Regional Rates for Welfare

In its late-hour vote on the budget, the state Senate approved a major overhaul of the welfare system that would abolish the longstanding formula that pays uniform benefits to recipients throughout California.

In exchange for deep cuts in welfare, Senate Democrats have insisted that Gov. Pete Wilson allow them to establish a regional rate system that would give lower benefits to families living in rural counties than to those in urban areas where expenses are higher.

“It just makes sense,” said Sen. Mike Thompson (D-St. Helena), the author of the plan. “If it costs less to live in Yuba County than in Marin County, why should you give recipients in both places the same amount of welfare?”

Although proponents cite no figures, they say that welfare rolls are growing fastest in rural areas, and attribute the growth to a migration of welfare families from more expensive urban areas of the state.

A spokesman for Wilson said the governor has reservations about the proposed formula but is unlikely to reject it because it is a key part of the overall budget negotiations.

The Senate plan divides the state into four regions and establishes different benefits for each region by cutting deeper into the welfare amounts paid in rural areas than those paid in urban areas.

As a result, the Senate plan would reduce benefits for families living in Marin, Orange, San Francisco, San Mateo, Santa Clara and Santa Cruz counties by 4.5%. Families living in counties such as Butte, Colusa, Del Norte, Imperial, Tulare and Yuba would be cut by 7.5%.

Thompson said the new welfare formula mirrored housing costs, so that cuts are the lowest in counties where rents are the highest. Under the new formula, for example, a welfare family of three living in Orange County, where fair-market rents average $764 a month, would receive a maximum monthly benefit of $633 from Aid to Families With Dependent Children, the program that provides assistance primarily to needy mothers and children.

In Yuba County, where fair-market rents average $385 a month, the same family could only receive a maximum monthly AFDC benefit of $613.

Los Angeles County, which does not have housing costs as high as Marin or Orange County, would pay a maximum monthly AFDC benefit of $627 to a family of three. In all the counties, however, the benefit would be lower than the $663 uniform rate that AFDC now pays a family of three.

Thompson said the new formula helps ease the pain of the welfare cuts by forcing recipients in low cost-of-living rural areas to bear the brunt of the reductions. At the same time, the formula attempts to discourage migration to rural counties, he said, where there is much less likelihood that a recipient will be able to find a job and get off welfare.

“If you’re on welfare in Napa County you have a better chance of getting a job than if you’re in Glenn County, where it may be cheaper to live but there’s 23% unemployment,” he said.

Thompson said although the initial differences in rates would be small, he hoped the establishment of the regional system would set a precedent that would allow a future Legislature to establish rates that more accurately reflected the vast difference in housing costs between rural and urban areas.

Thompson said the same regional rate system would be established for the blind, aged and disabled who receive aid under the Supplemental Security Income/State Supplementary Program. The Senate plan would pay a single recipient of that program who lives in the highest-cost counties a maximum of $616 a month, while those in the lowest-cost counties would receive $597 a month. In Los Angeles, a single recipient would be paid $610 a month. The program now pays a uniform $645.

Dan Schnur, Wilson’s communications director, said the governor was concerned that the new regional rates would present administrative problems. He noted that they could not go into effect without approval from the federal government, although the Bush Administration has indicated that it is not likely to stand in the way of a state that attempts to restructure its welfare system.

Casey McKeever, directing attorney for the Western Center on Law & Poverty, an advocacy group for the needy, said did not quarrel with the concept of regional rates but he was concerned whether housing costs alone were really an accurate measure of cost of living.

He said the costs within some counties may vary so dramatically that the welfare rate paid in the county would not accurately reflect the costs of living in either its urban or its rural areas. In San Diego County, he said, housing costs are extremely high in the city but are dramatically lower in rural areas a few miles east--yet they would be in the same region under the proposed plan.

“If you’re going to make a cut, I suppose there’s a certain rationality in applying a cut based on actual cost of living, but whether or not the formula they use here has any relationship to actual cost of living is another question,” he said.

Even with the new formula, he said, the cuts in welfare benefits make it extremely hard for recipients to subsist.

At least 10 other states have regional AFDC rates although not all of them are tied exclusively to housing costs. In Michigan, for example, the regions are determined by housing and heating costs. Other states using a variable rate system are Connecticut, Illinois, Kansas, Louisiana, New York, Pennsylvania, Vermont, Virginia and Wisconsin.

The Senate plan must be approved by the Assembly before it goes to the governor.