CALIFORNIA WELFARE LEGISLATION UPDATE
Western Center on Law & Poverty
October 11, 2001

GOVERNOR VETOES VEHICLE RESOURCE BILL

Betraying an agreement made in the state budget, on October 10 Governor
Davis vetoed AB 144 (Cedillo), the reform of the state's vehicle resource
rules for Food Stamps and CalWORKs.

The Governor's veto message contended that the bill would "increase CalWORKs
caseloads and grant costs because more families would become or remain
eligible for assistance," and would "also increase state costs in the
California Food Assistance Program." He concluded, "Given the rapid decline
of our economy and a budget shortfall of $1.1 billion through the first
three months of this fiscal year alone, I have no choice but to oppose
additional General Fund spending."

Funding for any costs associated with AB 144 was placed in the state budget
signed by the Governor in July. The $38 million added at the May revision,
almost all in federal TANF dollars, covered benefits for all persons
previously ineligible due to resource limits. This was done to pay for
implementation of the new federal Food Stamp regulation making eligible all
families with vehicles whose equity value is less than $1,500. Since DSS'
estimates methodology did not permit distinctions based on the value of
vehicles, the May revision assumed that the federal regulation would result
in eligibility for all families who would have otherwise been denied aid due
to the resource limits. Of course, many families will have vehicles with
equity value over $1,500 and will not be protected by the new regulation. AB
144 would have greatly expanded the number of households able to retain
their automobile without forfeiting vital food and income assistance.
However, since it was based on the assumption that no families are denied
aid due to excess resources (even if for non-vehicle resources, or for those
not covered by AB 144), the $38 million is more than needed even to pay the
costs of AB 144.

AB 144 would have excluded $15,000 in market value where an adult was
employed, engaged in or expected to engage in work-related activities, and
also would have excluded the entire value of a vehicle when the applicant or
recipient was a victim of domestic abuse. It would have adopted this rule
for CalWORKs and, using a new federal option, applied it to the Food Stamp
program. With the veto, California remains among the most regressive states
in the nation in its treatment of low-income families who own vehicles,
despite the state's unique and historic reliance on automobile
transportation. Forty-five states have less onerous policies than the
state's rule excluding only $4650 in fair market value, and 25 exclude the
entire value of at least one car. If adjusted by inflation from 1977, when
the Food Stamp limit was set at $4500, the limit would exceed $13,000.

As a result of the veto, families will be continue to be forced to dispose
of their cars, their most valuable employment asset, to qualify for Food
Stamps and CalWORKs. This could result in longer stays on aid. Others who
find jobs and combine work and welfare but need to buy a reliable car could
lose the income they need to make car and insurance payments, as well as
eligibility for CalWORKs child care, and as a result risk losing their job.

Davis and his staff are likely to assert that he made no commitment to sign
AB 144 as part of the budget agreement once the issue was separated from the
budget trailer bill, AB 429. This contradicts the reports of key legislative
budget negotiators. The vehicle resource issue was left in AB 144 as a
majority vote bill to avoid a two-thirds vote in the Assembly, which was
necessary for AB 429, an urgency measure. It was understood, however, that
AB 144 was a trailer bill and would be signed, unlike two other social
services trailer bill issues relating to fingerimaging and authorized
training for employed participants in community service. In contrast to the
vehicle resources measure, these issues were understood to be disfavored by
the Governor and were to placed in a separate bill doomed to failure. The
latter was never taken up, given its hopeless prospects.

Davis probably was anxious to find a justification to veto a bill he
expected would invite criticism from arch-conservatives who had shamelessly
misrepresented and maligned the vehicle resource proposal. They had conjured
up specters of Lamborghini's and Rolls Royce's, argued that the poor would
"shelter assets" in luxury automobiles, and railed that AB 144 would
undermine welfare reform and the sacred CalWORKs compromise. The Governor
preferred to avoid challenging the demagogues, and likely believed that,
given the powerlessness of the those who would benefit from the reform, the
political cost of the veto was less than the risk of a signature.

The state is undoubtedly facing a serious fiscal crisis, yet that provides
little support for the veto. Funding for the costs of AB 144 was more than
covered by the $38 million included in the budget, a sum that will be
continued because of the ongoing implementation of the Food Stamp equity
regulation. The state will continue to receive $3.7 billion in TANF block
grant funds and must pay $2.7 billion in maintenance-of-effort dollars.
While reauthorization looms on the horizon, speculation on the outcome of
that is no reason to reject a reform that is fair, reasonable, and long
overdue.

Casey McKeever
Directing Attorney
Western Center on Law & Poverty, Inc.
1225 8th Street, Suite 415
Sacramento, California 95814
(916) 442-0753 ext. 12
FAX (916) 442-7966
e-mail: cmckeever@wclp.org