Tanf Changes Pending In Congress Would Impose Significant Costs On California T Budget Brief June 2005

Penalties could exceed $160 million in the first year that the state fails to meet the requirements, escalating to more than $350 million if the state fails to comply for four consecutive years. [...] The proposed work requirements would reduce the flexibility of California and its 58 counties to develop programs that meet the needs of families in the California Work Opportunity and Responsibility to Kids (CalWORKs) Program.1 For example, the new requirements would discourage California from allowing CalWORKs recipients to receive vocational educational training for longer than 12 months, since. [...] The base penalty for failure to meet the all-families rate is 5 percent of the state's TANF block grant, an amount that increases by 2 percentage points for each consecutive year that the state fails to meet the minimum work participation rate, up to a maximum of 21 percent of a state's block grant.12 The penalty for failure to meet only the two-parent work participation rate is smaller because th. [...] The CBP estimates penalties could exceed $160 million for failing to comply with work requirements in FFY 2007, escalating to more than $350 million if the state is unable to comply for four consecutive years.14 In addition to incurring federal penalties, California would be required to increase its MOE spending by approximately $180 million per year if the state fails to meet its federal work par. [...] In addition, the CBO estimates that states would spend $800 million prior to the effective date of the new requirements in order to prepare for the implementation date.