Attorney General No.


Secretary of State No.



WELFARE. BUDGET PROCESS. INITIATIVE CONSTITUTIONAL AMENDMENT AND STATUTE. Amends Constitution to allow Governor to declare "fiscal emergency" when budget not adopted or projected deficit exceeds specified percentages. Grants Governor, with certain restrictions, powers to reduce expenditures to balance budget including reducing state employee salaries or ordering furloughs. Amends statutes to eliminate or limit cost of living adjustments in AFDC, SSI/SSP, and IHSS welfare programs. Reduces AFDC rates by 10%, then 15% after six months. Limits aid for new residents. Provides school attendance incentives. Gives counties discretion to set general assistance. Implements as federal law permits. Contains other provisions. Summary of estimate by Legislative Analyst and Director of Finance of fiscal impact on state and local government: The budgetary provisions could result in net state savings or costs of up to hundreds of millions or billions of dollars annually depending on future actions by the Governor and the Legislature. The fiscal effects of the welfare provisions would depend on a variety of factors such as caseload, inflation, and government actions. However, assuming federal waivers are obtained, the following cost and savings would result: (1) State government would obtain net savings of probably less than $680 million in 1993-94, primarily due to the reduction in AFDC maximum aid payments (MAP). These savings would increase annually. Beginning in 1996-97, additional savings, potentially several hundred million dollars, would result due to elimination of statutory cost of living adjustments (COLAs) for AFDC and SSI/SSP. Such savings would increase by comparable amounts annually. Actual savings would depend on inflation and whether such COLAs would be provided without a statutory requirement. (2) Counties would obtain net savings potentially up to about $70 million in 1993-94, primarily due to MAP reductions, elimination of IHSS COLAs, and limitation of general assistance grants. These savings would grow due to the increasing effect of the maximum grant provision and, beginning in 1996-97, elimination of the statutory AFDC COLA. Additionally, unknown annual savings, potentially in the hundreds of millions of dollars, could result if counties significantly reduced general assistance grants.


Pete Wilson, 1900 K Street, Suite 110, Sacramento, Ca 95814



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