July 2003 - Vol. 2, No. 4

• California Parentsí Child Support Debt Reaches $17 Billion
• California Welfare Programs Evaluated
• State Could Do More in Enrolling Families in Food Stamps
• Welfare Cuts to San Franciscoís Homeless Ruled Illegal
• Concentrated Poverty Increases in California During 1990s

California Parents’ Child Support Debt Reaches $17 Billion

The 1999 legislation which reformed California’s child support system required the state to assess the extent to which its arrears, or past-due child support debt owed by noncustodial parents, were collectible by the state. Accordingly, the Urban Institute has released a report for the California Department of Child Support Services which evaluates how much of the debt California can expect to collect based on the characteristics of the debt and debtors, and offers policy recommendations to prevent the high accumulation of arrears in the future.
Findings from the report are as follows:

• Debt for current obligors has reached $17 billion and will increase to $34-39 billion by 2010 if policies do not change.
• Seventy percent of the debt is owed to the state government due to welfare mothers’ assignment of rights to child support to the state.
• Sixty percent of parents who owe arrears earn less than $10,000 a year. One-fourth of parents had no recent income, and yet had a median order of $277 per month and median debt of $14,129.
• Current child support orders and past-due arrears are grossly disproportionate to poor parents’ earnings: for every dollar earned by parents with incomes less than $5000, $7.58 is owed in arrears and $2.11 is owed to a current order.
• Seventy-two percent of debt is owed by debtors owing more than $20,000.
• Even very low-income parents are making modest payments on their child support orders and debt: 41% of parents with no recent income had made an average of $2,880 in payments on current orders in the previous year and over one-third had made an average of $1,623 payments on arrears.

In conclusion, the report estimates that the state can realistically expect to collect only a quarter of the current debt owed.
Based on these findings, the authors recommend that the state:

• Avoid establishing orders by default when possible by trying various means to locate parents and personally serve them with a court summons that they can understand. The authors note that “a default order rate of 71 percent statewide indicates that something is terribly wrong” and that more parents should be participating in the process of setting orders.
• Involve parents in setting order amounts or set orders at full-time minimum wage. Current practice is to set the order at the level judged is necessary to sustain a child, which is $2,200 a month for two children (four times the median net income of all obligors). Half of default orders have been set at this rate and 82% of these are due a modification.
• Avoid seeking retroactive support beyond the date the order was filed. Currently the state (but not parents) can and do add on one year of past-due child support such that many parents start their order with a median amount of $3,418 in debt.
• Lower its rate of interest from 10% and also apply payments to the principal debt before interest (both of which are common practices in other states).
• Regularly review cases for modification (changes in the order amount to reflect the parent’s income). Only 6% of those eligible received a modification in 1999.
• Suspend orders while parents are incarcerated if they have no income or assets. Currently, orders continue at $291 a month.
• Institute a forgiveness program for uncollectible debt, as other states have done. The full report is available at the DCSS website: www.childsup.cahwnet.gov/

There is also a new report available from the federal Office of Child Support Enforcement which might provide the opportunity to compare some of California’s child support policies with other states’ procedures in terms of the process by which child is support established, including how parents are notified and served process, income is imputed, default orders are established, and general interaction with noncustodial parents. The report, Administrative and Judicial Processes for Establishing Child Support Orders is available at www.acf.dhhs.gov/programs/cse/ at Policy Documents, Dear Colleague Letters, DCL03-15.

California Welfare Programs Evaluated

The Economic Roundtable, a private non-profit located in Los Angeles, was hired by the Los Angeles County Board of Supervisors to review the county’s welfare program, GAIN (Greater Avenues to Independence) which served as a model for federal welfare reform in 1996 by emphasizing immediate work as the means to long-term self-sufficiency. The report makes the following recommendations based on its findings:

• Promote participants’ choice of community college, adult education, or vocational training. The authors found that parents who participated in education and training increased their earnings by 46% even after three years of entering the labor force. However, even though half of welfare parents in the county are in need of a high school diploma or English skills, these parents were twice as likely to be sent to “Job Club” (three weeks of motivation-building and job search) as education or training. Without training, welfare recipients will continue to be pushed into expendable low-wage jobs that are prone to the economic fluctuations of the need for workers in the manufacturing and service sectors. Indeed, almost half of participants who entered the labor force between 1998 and 2001 had no earnings in 2001, and eighty-five percent earned below the poverty threshold for a single parent with two children.
• More aggressively identify and serve welfare recipients with domestic violence, mental health, or substance abuse problems. Only six percent of the caseload was documented as having one or more of these barriers, yet independent reports have found that half of CalWORKS parents are dealing with domestic violence, mental health, or substance abuse. Of the 6% identified, parents were two times more likely to be sent to “Job Club” than referred to clinical services, and four times as many were sanctioned than completed clinical treatment. These parents were the lowest earners with an average income of $2,950 in the year 2001.
• Screen all parents who have used half of their lifetime limit on welfare for domestic violence, mental health, substance abuse, and disabilities, and provide appropriate clinical services and exemptions from time limits. Sixty-five percent of parents reaching their five-year time limits had one or more major barriers to employment, with a growing proportion of disabled recipients reaching time limits by the year 2005. Parents projected to reach their lifetime limit between 2003 and 2005 had average annual earnings of $5,391 in 2001.

The authors conclude that the original research used to design GAIN was too narrow to warrant the program’s overemphasis on immediate employment and “Job Club” at the expense of education and skills development. The report, “Prisoners of Hope” can be found at www.economicrt.org.

Additionally, the Applied Research Center (ARC) of Oakland has published a report featuring anecdotes and survey data of CalWORKS recipients in Los Angeles and Oakland, including sanction rates for various offenses, work activities, receipt of work-enabling benefits, and client experiences with welfare offices. Please see the report, “Falling Through the Cracks”, (the Appendices contain data on recipients from the California Department of Social Services and gathered by ARC) at www.arc.org.

State Could Do More in Enrolling Families in Food Stamps

Recent data show California is last in the nation for food stamp enrollment and first in the nation for food stamp errors.

• During the economic downturn of 2001-2002, California’s food stamp participation actually decreased slightly. Only two other states’ food stamp participation decreased during that period. While the nation as a whole has increased food stamp receiptby 22.5% in the last two years, states surrounding California had vastly higher increases in their food stamp participation rates with Nevada increasing its caseload by 63%, Arizona by 62%, and Oregon by 46%. The May 2003 report is available from the California Hunger Action Coalition at www.hungeraction.net. The UCLA Center for Health Policy Research also provides a report analyzing the characteristics of eligible adults not receiving food stamps at www.healthpolicy.ucla.edu.
• California has been fined $62.5 million by the U.S. government this year for a food stamp error rate of 14.8%, the highest in the country and nearly twice the national average. The U.S. Department of Agriculture estimates that California paid $172 million to ineligible families and underpaid other families by $79.5 million in 2002. The Department of Social Services says that system errors in Los Angeles are to blame for much of the error and that this county will owe most of the state’s fine. Please see the 6/28/03 article of the Los Angeles Times at www.latimes.com.
• California Food Policy Advocates has released recent individual county data on poverty rates, food insecurity, and enrollment in food and nutrition benefit programs. Please visit their website at www.cfpa.net.

Welfare Cuts to San Francisco’s Homeless Ruled Illegal

A Superior Court judge has ruled that “Care Not Cash”, approved by voters last fall, violates the state law that requires each county’s board of supervisors to determine welfare standards for its population. “Care Not Cash” would have reduced monthly cash welfare amounts from $395 to $59 in exchange for shelter and food provided by the city. “Care Not Cash” would have affected approximately 2,400 welfare recipients receiving welfare from three different programs: assistance to job seekers, the disabled or elderly, and other homeless. The challenge to “Care Not Cash” was brought forth by plaintiffs who are in the non-job seeking, non-disabled or elderly third of recipients, hence the judge’s ruling potentially could affect only this portion of the homeless population. A challenge to “Care Not Cash” is currently being brought forth on behalf of the rest of the homeless population.

The implementation of “Care Not Cash” for any portion of the homeless population has for the moment been halted. “Care Not Cash” could still be implemented if it is approved by the Board of Supervisors or if the city District Attorney wins his appeal of the Superior Court judge’s ruling. In the mean time, the Board of Supervisors and Mayor Willie Brown have approved an alternate measure, “Real Housing, Real Care” which would require that cash welfare benefits could be reduced only if a bed was available in a hotel or substance abuse treatment center, potentially affecting only 200 recipients in the near future. The new homelessness measure responds to fears by homeless advocates that welfare recipients would push out other homeless in current shelter beds. A June report by San Francisco’s budget analyst, Harvey Rose, also expressed concerns with “Care Not Cash”, including that the measure would cost more, provide less care than promised, potentially push 610 current shelter users out onto the street, and showed many other potential problems that would delay implementation. Many of these concerns could be exacerbated by the Mayor’s new budget that has proposed cuts to current mental health and substance abuse programs.
Please see the 5/9, 5/10, 5/11, 5/13, 5/14, 6/10, 6/17, 6/23, 6/24, 7/1, 7/9, 7/17, and 8/5, 2003 articles at www.sfgate.com.

Meanwhile, the Oakland-based Public Health Institute has released a national study on the effects of the 1996 federal welfare reform’s elimination of the Drug Addiction and Alcoholism program of SSI which provided cash aid, substance abuse treatment, and healthcare to the severely substance abusing homeless. Rather than encouraging these adults into the workforce, the elimination of aid to abusers was found to maintain current levels of addiction and homelessness, and found to increase substance abuse-related crime by 1.5 to 2 times the amount of crime committed by addicts with other assistance. Many addicts continued to live on the street or with family members, and waited for benefits they could receive when they turned 65. The authors conclude that, “There’s no evidence that cash assistance promoted continued use of drugs and alcohol.” A quarter of the population interviewed for the study was from the following California counties: Alameda, San Joaquin, Santa Clara, and San Francisco. The article was published in Contemporary Drug Problems on 7/21/03.

Concentrated Poverty Increases in California During 1990s

U.S. Census Bureau data show that California led the country in increased concentrations of poverty during the 1990’s, a period in which concentrated poverty decreased as a whole in U.S. cities. Seven of the fifteen U.S. cities with the largest increases in the number and population of poor neighborhoods were in California: the state’s population of high-poverty neighborhoods increased on a whole by 87%, while Riverside-San Bernardino saw an increase of 261%, Bakersfield 191%, Los Angeles-Long Beach 109% (equally 292,000 people), Chico-Paradise 103%, San Diego 86%, Fresno 69%, and Visalia-Tulare-Porterville a 60% increase. Though concentrated poverty decreased for all non-Hispanics in the Western region over the same period, concentrated poverty for blacks increased in Los Angeles-Long Beach and Riverside-San Bernardino (where concentrated poverty increased for blacks more than it did for Hispanics). The Brookings Institution’s report, “Stunning Progress, Hidden Problems: The Dramatic Decline of Concentrated Poverty in the 1990s,” by Paul Jargowsky, is available at www.brookings.edu.