State Prepares for Dawn of New Welfare System

This is the week when California is supposed to end the welfare system that has been in place for generations.

By Wednesday, Washington will no longer pay California for every resident who qualifies under the nation’s 61-year-old hallmark welfare program--Aid to Families With Dependent Children.

From now on, the state will be paid under the new Temporary Assistance for Needy Families Block Grant--a lump sum amount that will not change for five years.

“This is the beginning,” said Sean Walsh, press secretary to Gov. Pete Wilson. “It is the start of a fundamental change in providing welfare to people in California.”

The block grant officially transfers substantial power over welfare design from the federal government to the state and sets the stage for legislators to adopt a major overhaul of the California system next year.

In their first action under the new authority, state officials said they are cutting welfare payments for 2.7 million recipients Jan. 1.

The cut in AFDC payments is part of a backlog of welfare changes that have been approved by the Legislature and signed into law but never implemented because they lacked federal approval. With the block grant authority, officials have now scheduled starting dates for all of the pending changes.

They include:

* The regional grant levels signed into law last year will require a two-tiered cut in payments for AFDC recipients. Welfare households in urban areas will undergo a 4.9% cut, dropping the monthly check for a family of three by about $29, to $565. In 41 rural counties, the cut will be 9.8%, to about $538 per month for a family of three.

* The Maximum Family Grant, which will prevent welfare mothers from receiving more money when they have additional children. The highly controversial plan was promoted by legislators who argued that welfare money was an incentive for pregnancy.

The plan is scheduled to take effect in August, allowing time for a notification period and to avoid any effect on babies already conceived. Officials estimate it will affect 47,810 cases in the 1997-98 fiscal year.

* The Teen Pregnancy Disincentive, which would require that minor welfare recipients live at home with their parents unless there is evidence of abuse or other deterrent factors.

Advocates contend that teenagers seeking to leave home are strongly encouraged to become mothers by a welfare system that gives them cash for food and housing.

After a notification period, the disincentive is scheduled to take effect March 1. State officials said, however, it could take up to two years before social workers identify all of the cases that might require a change in living status. They expect about 20,000 minors to be affected.

* A Relocation Grant, which would restrict new California residents to a welfare payment no greater than their previous state for the first 12 months. The policy was passed in 1992 by legislators who thought California’s welfare grant--the nation’s fourth-highest--is a magnet for the indigent.

State officials said the relocation grant plan will not take effect before March 1, after a notification period. But the plan could also be stalled by a threatened legal challenge.

The proposal, affecting about 1% of the state’s welfare caseload, was previously rejected by two federal judges. State officials say the new federal law makes those decisions moot. But the American Civil Liberties Union said it will renew the complaint if the grant is implemented.

State officials say that some of the upcoming changes were already on track to be implemented even without the new flexibility offered by the federal welfare law. The state, for example, recently received a waiver from federal law to begin the maximum family grant program.

Now, however, state officials said they can proceed on their own schedule and authority without federal oversight.

They also said the block grant will generate about $260 million more for the state than anticipated under the AFDC funding formula.

The extra money is due to a recent decline in California’s welfare caseload and the fact that the block grant is based on the number of cases funded in 1995.

Welfare officials plan to spend about $60 million of the new money on work-training programs. Most of the remaining funds, they said, will be left for the Legislature to allocate next spring.

California could have waited until July to obtain its certification for the block grant. But, as with 29 other states, California officials calculated a financial advantage in the early application.

State welfare officials submitted their application for the block grant last month, then began a mandatory 45-day hearing process in which they hosted a series of public forums throughout the state.

On Wednesday, Wilson is expected to sign a certification document, testifying that the state has complied with the new federal requirements. His signature officially activates the block grant because no additional federal approval is required.

Wilson’s signature also will trigger several other schedules in the new federal legislation, some of which have caused confusion and controversy.

Wilson aides briefed legislative leaders last month about their plans to apply for the block grant eight months before the deadline. But some legislators complained that they were not consulted in advance of the decision and, they said, the briefing was inadequate.

“This does not bode well for our working collaboratively in the future,” said state Sen. Diane Watson (D-Los Angeles), who has sponsored several hearings on welfare reform in her role as chairwoman of the Senate Health and Human Services Committee.

“This administration was not upfront in describing to legislators all of the ramifications of this action,” she said. “They gave us no notice and no opportunity for input.”

State officials insisted they have been cooperative. “We have not tried to keep anything a secret here,” said Burt Cohen, assistant secretary for the state Health and Welfare Agency.

But Cohen and others also acknowledged that their action could limit some options available to the Legislature when it considers a major welfare overhaul next spring.

For example, the state certification will trigger new federal time limits that determine how long a recipient can remain on welfare.

Under the new rules, a recipient is to be dropped from public assistance if he or she has not obtained work within two years. Also, the federal law limits all recipients to a lifetime maximum of five years on welfare.

For federal purposes, those clocks start ticking when the governor signs the block grant certification. State officials said that means welfare checks written in California next month will, for the first time, count against a recipient’s time limit.

But there is considerable confusion about how the state will enforce the time limits.

For one thing, officials have not yet determined how they will track welfare recipients to determine when they have reached their maximum time on public assistance. Federal authorities are even further behind in creating a national tracking system to follow recipients from state to state.

Also, there are disagreements between state and federal levels about the legal consequences for states that ignore the time limits.

“I think you really have to look at this bill as a work in progress,” said Amy Tucci, spokeswoman for the American Public Welfare Assn. in Washington “There are really huge issues that need to be addressed. Any time you get a piece of legislation like this, there are going to be false starts and mistakes and problems.”