Gregoire Announces $51 Million In Cuts To State Welfare Program
OLYMPIA, Wash. - Gov. Chris Gregoire has ordered $51 million in spending reductions for the current fiscal year for WorkFirst services delivered across five state agencies. The spending adjustment is needed to ensure a balanced budget for the WorkFirst program and protect the safety net for the very lowest income families.
WorkFirst is Washington state's welfare-to-work program, which is based on the belief that everyone with abilities is needed in today's workforce, and those who can work should. Washington initiated the WorkFirst program in August 1997 to help low-income families become self-sufficient by providing training and support services necessary for parents to get a job, keep a job and move up a career ladder.
WorkFirst expenditures, at about $968 million a year, are spread across the five state agencies and more than two dozen distinct services, from cash grants and job placement services to vocational training and emergency vouchers. About $320 million of the WorkFirst budget pays for child care subsidies that help WorkFirst families and low-income working families who are not on welfare.
The number of families on welfare in Washington dropped by 45 percent between 1997 and 2001 when the state's economy was strong. Since the economic recession hit, the caseload has increased by more than 30 percent in the last two years – from 51,106 in July 2008 to 66,634 in June of this year.
"The reductions are the result of increased demand due to the economic recession, coupled with declining resources," said Marty Brown, Director of the Office of Financial Management. "We've identified a shortfall and are moving quickly to fix it. These are painful cuts, but necessary to stay within budget."
The two largest reductions will come from lowering the income eligibility for Working Connections Child Care ($14.8 million) and granting fewer "hardship extensions" to WorkFirst families who reach the program's 60-month time limit ($16.4 million). The income eligibility for child care change will go into effect on Oct. 1, 2010 and the hardship extension change will take place in February 2011.
Other reductions will include:
- More of a family's income will be considered in determining eligibility
- Less funding for job search, job retention, career advancement and other employment services
- Fewer opportunities for WorkFirst parents to work in unpaid subsidized jobs
- Fewer education and training services
- Reduced funding and redesigned job services for WorkFirst families, and reduced job support and emergency support services
- Reduced child care support for two-parent families by requiring one parent, instead of both parents, to participate in work activities
- Reduced short-term funding to help low-income families stay off of welfare
These spending reductions come at a critical time for the state's welfare reform program, now in its 13th year. Given the difficult economy and continued strong caseload growth, the Governor has challenged the five state agencies that comprise the WorkFirst Subcabinet to "reboot" the program for the future.
A major re-examination of the program is now under way, with a strong focus on resource leveraging and innovative, evidence-based best practices that are known to be cost-effective and sustainable. The plan is to have a WorkFirst redesign proposal for consideration by the Governor in early December of this year.
Even further reductions to the program will be necessary should Congress decide to not extend federal TANF Emergency Contingency funding to states beyond Sept. 30, 2010 when it comes back from recess next month. This is because $62 million in continued federal TANF contingency monies for WorkFirst was written into the state budget that was approved earlier this year.
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