More Than A Decade Later, Recession-Era Cuts Still Hamper California’s Low-Income Residents

Michelle Cummings, left, chats with coworker Ukia Anderson, at an emergency shelter in Stanton, CA. Cummings is a former CalWorks recipient who now oversees housing services for the Orange County nonprofit Illumination Foundation. Photo Credit: Caitlin Yoshiko Kandil

Seven years ago Michelle Cummings became homeless.

It was the “perfect storm” of misfortune, she said, which included losing work as a caregiver in San Bernardino, her husband’s unemployment benefits running out and deep cuts to statewide safety-net programs such as CalWorks, CalFresh and Medi-Cal.

“It went from about $700 to about $400 really quick,” she said of her benefits through CalWorks, the state’s cash-aid program serving 865,000 children in low-income families.

Cummings was evicted from her apartment, so she, her husband and their then 6-year-old daughter relocated to Orange County to be near family, where they stayed in motels. Cummings learned how to wash clothes by hand in the bathroom sink and to cook with a microwave and electric skillet. Meanwhile, the costs of housing, food and toiletries soared, and the family’s cash aid plummeted—until it eventually ran out.

“That’s when the bottom fell out,” said Cummings, now 49.

“We went to a church in Anaheim with our backpacks on,” she said, where the family received a hot meal and instructions on where to find a shelter. “We didn’t even have bus money. We told the bus driver, ‘We’re trying to go to this shelter, can you help us?’”

When they arrived, they saw men, women and children all sleeping next to each other on mats on the floor, and her daughter burst into tears.

“It was terrifying,” she said. “It was truly the lowest.”

But Cummings’ story isn’t unusual.

Beginning in mid-2007, as the nation was in the throes of the economic recession, California’s top leaders made a series of cuts to safety-net programs that sent many residents like Cummings in a downward spiral toward homelessness. While California’s economy has largely recovered since then, and the state’s food stamps and health programs (CalFresh and Medi-Cal) have mostly been restored, the state’s welfare program has yet to see a reinvestment to pre-recession levels.

And if Gov. Jerry Brown’s proposed 2018-19 budget passes, these CalWorks cuts—first made by Gov. Arnold Schwarzenegger—will remain another year.

As a result, those who receive the benefit “certainly are living a lower standard of living than they were before the recession,” said Jessica Bartholow, policy advocate for the Western Center on Law and Poverty.

Living in Deep Poverty

Among the sweeping cuts, recipients of CalWorks—an acronym for California Work Opportunities and Responsibility to Kids—saw their lifetime eligibility limit for the program slashed from five years to four; the elimination of the annual cost of living adjustment that automatically increased grant levels to keep pace with inflation; and a reduction to monthly levels of cash assistance that would leave a family of three below the “deep-poverty” threshold of 50 percent of the federal poverty line.

In 2007-08, a family of three living in a high-cost county received a maximum monthly benefit of $723. By 2011-12, this amount dropped to $638, and under the new budget, it has crawled back up to $714. But according to the California Budget and Policy Center, if cash assistance had been adjusted for the rising cost of living each year since 2007-08, then the maximum grant level this year would be $983—$269 higher than it actually is.

This means that CalWorks grant levels have fallen to just 41 percent of the federal poverty line, according to the California Budget and Policy Center, making it the 11th-straight calendar year that grants have been below the deep-poverty mark.

“It’s tragic when you consider that 100 percent of the federal poverty line is the amount someone needs to meet their basic needs,” said Bartholow. So living in deep poverty, she explained, “your children will be sicker, your likelihood of going homeless will be much greater, your children will be exposed to toxic stress that will make it even more difficult for them to exit poverty. This is what we’ve decided to do with the CalWorks program.”

Paul Leon, president and CEO of Illumination Foundation, which serves Orange County’s homeless population, said that he sees the impacts of these cuts—as well as cuts to programs that CalWorks supports—on the ground everyday.

“They’re getting hit from both sides—fewer services and higher rent,” he said of Orange County’s low-income residents.

“So there are more families becoming homeless,” Leon said. “The way it trickles down is that you’re in an apartment and you’re barely holding on. You can’t pay the rent so you leave or you’re evicted and then you go to a motel. Motels are extremely costly now because they’re all full, so you can manage that for six months. Then you go to your car, and then you’re on the street. We have hundreds of families like this—we average 50 calls per week.”

Leon believes state policymakers “aren’t understanding that it’s creating a crisis,” he said. “I don’t think they really realize how hard it is for a family to stay housed, especially in Orange County and Los Angeles, where the costs are almost prohibitive.”

In addition to homelessness, new research shows that poverty can have an even longer-lasting impact—on children’s brain development.

According to studies published in 2015 in the journals Nature Neuroscience and JAMA Pediatrics, children in families living below the federal poverty level have less brain matter in the regions associated with executive functioning, language and math than children from wealthier families—which then impacts their ability to learn and perform well in school.

Researchers speculate that the chronic stress of poverty could be inhibiting children’s brain development.

“That’s Not Going to Pay Your Rent”

Since the recession, California policymakers have bolstered parts of CalWorks.

Eligibility requirements have been reworked so that families can own a vehicle worth up to $9,500 and still receive cash aid; benefits have been extended to Californians with convictions for felony drug possession; the maximum family grant rule—which barred additional cash assistance for children born into a CalWorks household—has been repealed; and other initiatives for housing and education have been boosted.

H.D. Palmer, spokesman for the State of California’s Department of Finance, a cabinet agency under Gov. Brown, said in an email that steps have been made to close the gaps made during the recession-era cuts.

Reductions in lifetime eligibility limits occurred alongside “significant investments in employment services and barrier removal to help move clients towards self-sufficiency sooner,” he wrote, and cost of living adjustments will now be “discretionary” and determined through the “annual budget process based on the availability of resources.” Palmer also pointed to the “significant progress” in increasing grant levels since 2014, adding, “To the extent revenue growth continues in the foreseeable future, additional grant increases are required under current law.”

But many experts and advocates say this still isn’t enough.

Kristin Schumacher, senior policy analyst for the California Budget and Policy Center, said that CalWorks is “long overdue for a significant investment,” explaining that to better assist low-income families, the program should reinstate the cost of living adjustment, eliminating asset limits, restore the time limit from four to five years and raise grant levels so that families aren’t living in deep poverty.

Cummings knows this firsthand. At the emergency shelter, she connected with Illumination Foundation, which helped her find stable housing and a job in caretaking. She now lives in her own home in Anaheim with her husband and daughter, who is 13.

Speaking to a reporter in February, Cummings proudly noted that she no longer needs public assistance. Three years ago she took a job as an associate manager of housing site services for Illumination Foundation, where she helps those in the situation she was once in.

Although she no longer needs cash aid, Cummings works with people every day who do—and she watches as CalWorks assistance continues to fall short of families’ needs.

“That’s not going to pay your rent—that’s not really going to pay anything,” Cummings said of current grant levels.

“That’s why every week there are new families becoming homeless.”

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