Davis Budget Puts Counties in Welfare Fix

With California’s coffers strained by $6 billion in electricity purchases, the governor has eliminated funding for programs considered to be the pillars of welfare reform, experts say.

Most welfare directors across the Southland will likely abandon programs that took months, if not years, to develop. The programs, including child care, transportation and job skills, are considered innovative because they attack some core causes of poverty. The idea is to prevent people from going on welfare in the first place.

The money for these programs, which totals $1.9 billion, was amassed by counties as a reward from the state for reducing welfare rolls. The counties expected that more “incentive funds” would follow.

But just two years after counties statewide began exhaustive planning to use this new source of funding, Gov. Gray Davis has eliminated it in next year’s proposed budget.

Bruce Wagstaff, deputy director of the state Department of Social Services, Welfare to Work Division, said the state was not legally required to provide incentive money. He said incentives were not included in the budget because the governor wanted to ensure that basic services in the state’s welfare-to-work program, known as Calworks, were funded.

“The governor was very concerned that we maintain a program, that we provide services in Calworks. What the governor had to do is to make sure there was enough for the base program,” Wagstaff said.

Officials in several counties said they initiated programs that could end as early as summer next year if alternative funding isn’t found. Some of the programs have already started, others have been put out to bid, and others are still in the planning stages.

“It makes us looks insincere . . . . We got assurance from the state that these funds would continue to accrue as long as we would put people [on welfare] to work,” said Angelo Doti, Orange County’s welfare director. “Then you are calling people [who run the programs], saying we may not see this money. You feel a little dumb, but we are trying to understand the crisis that the state faces.”

Counties began accruing the reward money in 1998; the state stopped paying them in July 2000. By then, the state had given the counties a total of $1.9 billion, and promised another $97 million.

State officials note that the counties have spent only $80.7 million of the original $1.9 billion. But Frank Mecca, executive director of the County Welfare Directors Assn. of California, said nearly all of that money is committed in bids and contracts to provide services.

Orange County, for example, allocated $7.5 million for two years of the summer Youth Employment Program, which teaches teens job skills. The program, which serves 2,212 people each year, will close in summer 2002 unless other funding is found, Doti said.

A similar program in San Diego, funded with $500,000 in incentive funds, will also be forced to close just one year after it opened unless other funding is found, said Joan Zinser, deputy director of San Diego’s Health and Human Services Agency. Smaller programs would also be closed, such as a computer laboratory for teens on welfare, she added.

Although state officials say the cuts were made because of decreased revenue, most local officials attribute the problem to the energy crisis.

Mecca said the poor are paying twofold for the state’s energy crisis.

“It sends a signal to counties to retrench . . . your programs. We are doing that precisely at the time when we should be making sure that the people we helped get off the [welfare] rolls stay off, particularly in a time of economic downturn,” he said.

Kevin Gaines, assistant to the director of the Riverside County Department of Public Social Services, said his county has recently asked for bids to operate a program designed to keep people off welfare with home budget assistance and psychological counseling. But that program will stay afloat only if the county uses other funds to keep it going.

The proposed budget is “affecting us in a significant way. One of the things we counted on was for our partners at the state level to keep their commitment to funding these services,” Gaines said.

Funding for child care for the working poor has been put on hold, as well as programs to help at-risk teens, he said.

Los Angeles county officials also lament the situation, but say they were very cautious about long-term spending with incentive money. Programs they established will remain intact until fiscal year 2004-05, said Phil Ansell, chief of intergovernmental relations for that county’s social services department.

Ansell said his county’s Board of Supervisors planned for only the money it received, stretching it out over several years instead of spending it in one year and hoping more would follow.

Wagstaff from the state welfare to work division said, “Counties aren’t very pleased. [But] you can’t say that is automatically saying that all of their work will go by the wayside. Each county will have to look at its own situation and determine what it can do.”