Budget Impasse May Hit Needy Californians, Controller Says

The day after a judge guaranteed paychecks for most state employees despite a budget stalemate, state Controller Kathleen Connell delivered some bad news: Payments to California’s neediest people may be halted by the end of the month.

“The most disadvantaged Californians have now fallen hostage to the budget delay,” Connell said at a Friday morning news conference, scolding legislators for missing their July 1 budget deadline for the fifth consecutive year.

That delay led a Los Angeles attorney to join forces with the Howard Jarvis Taxpayers Assn. in a lawsuit that seeks to block the state from spending any money until a budget is passed.

On Thursday, Los Angeles Superior Court Judge Robert H. O’Brien set a July 21 hearing for the case, but in the meantime has allowed the controller to pay most state workers because they are covered by previous court rulings.

But among those most vulnerable if the budget impasse continues are people in California’s largest family assistance program--CalWORKS, formerly known as Aid to Families With Dependent Children.

However, Connell said, mid-July checks for CalWORKS recipients have already been issued, so recipients are not immediately at risk. The next major state CalWORKS allocation to the counties, which typically pay 2.1-million welfare recipients once a month, is $718 million on July 30--nine days after the court hearing.

The state for now is holding back two intermediate checks for county administration of assistance programs for the needy, Connell said. County officials said the delay in paying administrative expenses will not be significant.

Connell said the state will argue at the hearing that welfare and other public assistance programs should be added to the exemptions, just like state workers’ paychecks. But she cautioned against optimism, saying that, because CalWORKS is a new program, it remains “an open legal question” not protected by past court rulings.

Late state budgets have become so commonplace in California that Connell’s comments barely fazed county welfare administrators.

“We’ve been here before, and the assistance payments have always been made,” said Ann Jankowski, budget chief for Los Angeles County’s Department of Social Services. “So far, so good.”

Frank Mecca, the welfare directors’ top lobbyist in Sacramento, did not even chafe at Connell’s suggestion that counties could dip into their own budgets if state money is not released, counting on reimbursement later.

“Based on our experience in recent years . . . that’s what has happened,” Mecca said. “We think things should be OK unless this drags on and on.”

It remained uncertain Friday whether Judge O’Brien’s July 21 hearing will add urgency to the meeting scheduled this afternoon between the state’s four highest-ranking legislators and Gov. Pete Wilson.

“I don’t want anyone to suffer, but insofar as this ruling helps to hold the Legislature’s feet to the fire, it’s a good thing,” said state Sen. Ross Johnson (R-Irvine), the Senate Republican leader.

Others said it would be unlikely to speed things up.

“They already have a sense of urgency. . . . They really are moving as fast as they can,” said Richard Zeiger, spokesman for Assembly Speaker Antonio Villaraigosa (D-Los Angeles).

Century City attorney Richard Fine, whose budget lawsuit prompted O’Brien’s ruling, said Friday that he sees little distinction between families on welfare and those small-business owners that contract with the state--who also are out of luck until a budget passes.

“I don’t perceive them as suffering any greater hardship than a guy who is selling sandwiches to the state prison system,” Fine said. “The object of this is to make people stop suffering everywhere once and for all.”

In a related development, some welfare recipients will benefit from a state agreement Friday to pay $42 million to settle a dispute over a series of welfare cuts approved by the governor and the Legislature in 1992, 1993 and 1994.

Under the agreement, poor families who received welfare at any time from December 1992, to May 1996, will receive a one-time payment, estimated between $40 and $60.

State officials said that about 1.7-million families--including 680,000 who live in Los Angeles County--will be eligible for the payment.

“To a family of three who is living in Los Angeles on $565 a month, $60 is a substantial amount of money,” said Clare Pastore, staff attorney for the Western Center on Law & Poverty, which originally sued the state over the cuts. “It’s a couple of pairs of shoes or a winter coat.”

On another budget-related front, negotiations were expected to continue through the weekend over putting a school bond initiative on the November ballot.

Rejection on Friday of a $4.5-billion bond deal presented by Villaraigosa moved the impasse closer to a Monday deadline, after which printing costs for voter pamphlets go up $3 million.

Times staff writers Virginia Ellis and Max Vanzi contributed to this story.