County Facing Welfare Deficit of $70 Million

Los Angeles County’s brief era of overflowing social welfare coffers came to an end Tuesday when officials revealed a $70-million shortfall in programs that move people off welfare rolls.

To close the gap, the county will have to cut into a variety of anti-poverty programs it had funded with unspent welfare funds, a county welfare official told the Board of Supervisors during a fiery meeting Tuesday.

Supervisors, furious at the delay in bringing the problem to light--the department had known of it since at least May--refused to approve the program cuts without more study. And they accused officials of the Department of Social Services of lying in an effort to protect their bureaucracy.

“The department’s deceitful behavior has led to its gluttonous recommendation to siphon money from the most needy,” fumed Supervisor Gloria Molina. “I’ll be damned if I am going to allow you to backfill with money that belongs to residents in our neighborhoods for a mistake that the bureaucrats have made.”

She ordered the county’s auditor-controller and chief administrative officer to help the department come up with a plan to cover the debt over time without reducing core services.

Steven Golightly, interim head of the department, said he did not warn the board about the deficit because he first wanted to make sure the problem was as bad as he feared. The department came to the board Tuesday seeking approval to redirect money to cover the shortfall.

“We were hopeful at the time working administratively with the state Department of Social Services that we would be able to reduce that amount substantially,” Golightly said.

He said he briefed the supervisors’ aides about a potential deficit in September and gave them final numbers in November. Not having done so sooner “was a mistake, in retrospect,” he said.

“Mr. Golightly, this isn’t just a bad judgment call,” shot back Supervisor Zev Yaroslavsky. “You put the core mission of this county’s welfare system at risk and in jeopardy.”

The deficit stems, in essence, from increasing costs of administering CalWORKS, a series of so-called welfare-to-work programs.

With a welfare caseload roughly 10 times that of any other county, Los Angeles took longer to transfer its roughly 200,000 recipients to the new program, Golightly said. As a result, it accumulated a surplus of more than $100 million each year since 1997.

Golightly said a state report on Los Angeles’ relatively low cost per recipient led his department to believe the state would accept a larger budget request for Los Angeles this year and put in a request for $555.5 million for CalWORKS.

It was a bad assumption. The state kept Los Angeles’ share of the money--federal dollars administered by the state--at last year’s level, $469.1 million.

In the interim, Los Angeles’ welfare-to-work program continued to “mature,” bringing more job-retention services such as child care and transportation to more people. The programs are expected to cost $539.5 million this year.

The result is that the state-mandated programs now cost the county $70.4 million more than the state pays for them.

And the county department’s fiscal woes do not end there. It is battling a federal mandate to return about $50 million in interest earned on federal funds that states doled out to counties before they were spent. Golightly said federal officials have asked for the interest back and his department is lobbying for a reprieve.

All of this comes at a time when the state is struggling with a massive deficit of its own, which Gov. Gray Davis proposes to fix in part by cutting $1.1 billion from programs for the poor, including CalWORKS.

Part of the local welfare department’s proposed solution involved lobbying state officials to redistribute past unused funds to counties based on need. Golightly said the state agreed to this, but it is unclear how much Los Angeles will get.

The mainstay of the department’s plan involved using “incentive” funds--bonus dollars earned by the reduction of welfare rolls--to make up the difference.

That money has been used to fund a 46-program initiative of community programs meant to assist the poor, called the Long Term Family Self-Sufficiency plan. But not all of the programs have been implemented and the department figures it can free nearly $110 million by not starting some of them and cutting back or ending others early.

The board rejected that plan Tuesday. Instead, supervisors directed the department to make another study and present a more thoughtful list of cuts.

On motions from Supervisors Yvonne Burke and Michael Antonovich, the board said two community programs that had been slated for cuts should be given higher priority: after-school programs and a project to aid emancipated foster youth. Supervisors also said they would meet to consider whether any employees should be disciplined for not bringing the deficit to their attention earlier.