Boost in Welfare Payments Ordered

SAN FRANCISCO —  A judge ruled Friday that California must pay welfare recipients a cost-of-living increase of about $125 million a year because Gov. Arnold Schwarzenegger reduced vehicle license fees when he took office.

Superior Court Judge James L. Warren said he would grant a motion by civil rights attorneys who argued that Schwarzenegger’s action should trigger a 1998 law tying welfare payment increases to cuts in the vehicle fees. The rationale for the law was that the treasury would be full enough to boost welfare payments whenever the state could afford to cut the car tax.

The cost-of-living increase, retroactive to October, would apply to 1.2 million welfare recipients in 500,000 families. It would amount to 3.6%, or $25 a month for a family of three now receiving $704 a month.

“This is a huge victory for our clients,” said Clare Pastore, attorney for the Western Center on Law and Poverty. “Twenty-five dollars month for them is the difference between keeping the lights on ... or buying clothes for their kids in winter.”

H.D. Palmer, a spokesman for the governor’s office, said the state would fight the ruling -- and that could take a year. “There will be no [immediate] fiscal consequences,” he said, noting that the ruling would be stayed pending the appeal.

Pastore called the state’s decision “disgraceful,” saying that an appeal would not only cause needy families to wait for money due to them but also cost the state money in legal fees and interest for the delayed payments.

Vehicle license fees are paid each year to the Department of Motor Vehicles and then distributed to cities and counties. The fee historically amounted to 2% of a vehicle’s estimated value. But the Legislature reduced the fees by 25% several years ago, with the potential for reducing them whenever there was enough money. During the budget struggle last year, then-Gov. Gray Davis tripled the fees. During the recall campaign, Schwarzenegger vowed to reduce them again if elected.

After the governor fulfilled his campaign promise, the Western Center on Law and Poverty and the Lawyers Committee for Civil Rights of the San Francisco Bay Area petitioned the court in December to order the welfare increase. They argued that Schwarzenegger’s order to reduce fees by $4 billion should bring some financial relief to welfare recipients too.

The state attorney general’s office contended that Schwarzenegger’s action should not trigger the cost-of-living increase.

Deputy Atty. Gen. Karin Schwartz said the governor’s action, rather than providing “extra relief” for motorists, was undoing the fee increase imposed by Davis.