Court Rules County Underpaid Welfare

The California Supreme Court dealt Los Angeles County an irrevocable legal setback Wednesday when the justices unanimously refused to overturn a lower court ruling that directs the county to repay as much as $136 million in welfare payments it illegally withheld from its poorest residents.

The ruling significantly strengthens the hand of lawyers negotiating with the Board of Supervisors on behalf of more than 60,000 general relief recipients, each of whom could be entitled to about $73 a month in additional aid they lost over a two-year period from 1993 to 1995.

“A lot of people have waited a long time to be compensated for an illegal reduction that never should have taken place in the first instance,” said Richard Rothschild, litigation director for the Western Center on Law and Poverty, one of several groups that sued on behalf of the general relief recipients. “The supervisors understand that they are now faced with a significant monetary liability, and it certainly should facilitate a settlement.”

Unlike other types of welfare, general relief--or general assistance--is entirely funded by the county. It covers indigents, mostly childless and unemployed, who are ineligible for other welfare programs.

As insurance against Wednesday’s ruling, the supervisors voted last month to set a four-month annual eligibility cutoff on all future general relief payments, and to force all recipients who have drug or alcohol problems into drug treatment programs as a condition of aid.

The county hopes to save at least $40 million a year through those cutbacks, but legal advocates have complained that they are merely an attempt to get back at the poor for the legal judgment upheld by the state’s highest court Wednesday.

In an attempt to mitigate the impact of future welfare cutbacks, legal advocates for the poor are now in negotiations with the county to link the proposed cuts with the terms of the general relief repayment. Sources said late Wednesday that although the two sides remain fairly far apart, a compromise on the table would exempt from the reductions about 26,000 general relief recipients who were illegally deprived of benefits.

In exchange, lawyers for the poor would agree to hold the county liable for only $50 million to $65 million in back payments stemming from the court case, sources familiar with the talks said.

Those “settlement” negotiations were set to resume Wednesday evening, pitting lawyers for the poor against county attorneys and county welfare director Lynn Bayer, according to Rothschild, who would not comment on the content of the proposals under discussion.

“It is certainly unfortunate that we have to negotiate at all, but the reality is that the board intends to pay for this [court decision] out of its general relief budget,” Rothschild added. “I don’t think it is morally defensible. But it is a reality.”

The supervisors voted to establish the four-month cutoff policy last month. Tuesday they agreed to delay it 30 days while they awaited the court decision.

Supervisor Yvonne Brathwaite Burke said the court decision, although not unexpected, was a significant blow to a county still in the midst of a fiscal crisis.

“This is very bad news, but . . . we knew we had this case outstanding and in order to pay this we are just going to have to raise it somewhere,” said Burke. “And the only way we have determined we can raise it is to impose the time limits.”

The supervisors have spent hours in executive session discussing the negotiations, but Burke would not comment on the details.

“I don’t know that we are that close,” she said, “but it is close enough to keep talking. I certainly hope that we can arrive at something that will prevent any kind of serious impact on those GR recipients.

“No one wants to cut GR and no one wants to impose time limits,” Burke added. “But we have no choice.”

Burke also said the county would have to borrow the money to pay for the back welfare payments, incurring potentially tens of millions of dollars in additional costs.

The county was authorized by state law to limit its general relief payment to $285 a month in 1993, but reduced it by another $73, saying it provided that much in health care benefits at county hospitals and clinics. An appeals court ruled in 1995 that the reduction was unauthorized because state law requires counties to provide both general assistance and health care.