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Troubling Similarities: Welfare Reform and Realignment

April 23, 2012

By Amy Lemley

Sometimes, an article is published that reminds you of the essential role that a free press plays in a democratic system. One such article was written on April 4th by Jason DeParle in the New York Times.

Mr. DeParle sheds light on the fact that despite increasing poverty and unemployment, the welfare caseloads in most states have remained flat. In eleven states, the number of individuals receiving assistance has actually decreased since the recession.  

How could this is be? Isn’t welfare an anti-poverty program intended to support families during hard times and help them move back into the economic mainstream? Once, perhaps, but no longer, thanks to the 1996 “reform” of welfare, which replaced Aid to Families with Dependent Children (AFDC) with Temporary Aid to Needy Families (TANF). More significantly, the 1996 legislation ended the program’s status as an uncapped entitlement and froze the level of federal funding available to states.

As the article documents, the result has been ever-shrinking TANF caseloads despite rising rates of poverty. Just one in five poor children now receives cash aid, the lowest level in nearly 50 years. Clearly, the link between demand for assistance and the provision of assistance has been severed.

My fear is that under realignment, child welfare in California may suffer the same fate. Under this scenario, California would experience increasing child maltreatment and decreasing levels of child welfare services.  My fear is motivated by a troubling number of similarities between the “reforms” of 1996 and realignment in 2012.

Like TANF, child welfare in California under realignment is now essentially capped. However, instead of a fixed ceiling as was established under welfare reform, the funding available for counties to perform child welfare functions is fixed by a “base” level combined with “growth” from sales tax revenue. This would not be troubling if the California state sales tax was guaranteed to grow faster than the cost of providing child welfare services. Unfortunately, no such guarantee exists. Instead, we know from recent history that there are periods of economic downturn when sales tax wanes. Even when times are good, we also know that the cost of providing services often outpaces inflation.

So where does that leave counties? In a very bad place, I would argue. Instead of the current system, whereby funding expands when more children are being maltreated and contracts when maltreatment decreases, counties are now left with a funding stream set by how much stuff Californians buy at their local mall. Call me crazy, but this doesn’t sounds like a very responsible way to manage a program for our most vulnerable children.

In the face of a capped funding stream, counties have the same incentive faced by states after 1996 welfare reform: decrease caseload. If California’s caseload were sky high, this incentive to decrease caseload may be a correcting one. However, this is not the case in California, which has decreased its foster care caseload from over 100,000 in 2000 to less than 60,000 in 2012.

So how do we ensure that California’s child welfare system does not go the way of TANF, with increasing need in the community and decreased access to services? I would argue three things are needed.

First, let’s not start realignment with one foot in the grave. According to an analysis by the California County Welfare Director’s Association, the base set by the Administration for Child Welfare Services is at least $260 million lower than required. It does not adequately account for full implementation of extended foster care under Assembly Bill 12 or the new requirements of the Katie A lawsuit.

Second, we must add new accountability measures to ensure that California’s child welfare system responds to the level of child maltreatment in communities. Senator Darrell Steinberg has introduced Senate Bill 1432, which would improve how California measures child maltreatment in the community. It would also establish minimum compliance thresholds and require the California Department of Social Services to take action if a county child welfare system, after receiving technical assistance for a specified period of time, does not improve.

Most importantly, however, the State General Fund should serve as a fiscal backstop for the child welfare system under realignment. If there is inadequate funding for these vital services because sales tax growth doesn’t keep pace, the state should step in and ensure the safety and well-being of California’s abused and neglected children rather than abandon them to unnecessary trade-offs at the local level. If realignment works as we have all been promised, offering counties this insurance should not be a problem.

TANF is an instructive lesson about how fiscal policy drives programmatic decisions. By capping the funding, TANF caseloads have been driven into the ground, leaving behind a generation of children. Let’s not look back 20 years after realignment, and see that we have made the same mistake with California’s child welfare system.

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