California Voices

A.B. 1182 (Hernandez)  was recently discussed in the Senate Human Services Committee.  This bill would “delete the requirement that county welfare departments assess the value of a vehicle when determining and re-determining eligibility for applicants and recipients for California Work Opportunity and Responsibility to Kids programs (CalWORKs).” If the bill becomes law, it would save California taxpayers an estimated $9.7 million in 2012 by reducing the administrative workload associated with determining CalWORKs eligibility.

Under current policy, a CalWORKs recipient may not own a vehicle worth more than $4,650, and if they do they will no longer be eligible for the program.  This asset test was last modified 15 years ago and is long overdue,because of the economic downturn that has caused a high rate of unemployment and an increased demand for public assistance.  A recent report by the County of Los Angeles concludes that “car ownership is strongly correlated with employment status, and increases the likelihood of employment.” The fundamental problem is not that low-income families cannot own a car; it is the quality of the car that they own that causes more financial setbacks due to vehicle maintenance.

An overwhelming majority of CalWORKs recipients drive cars that have been neglected because it is not on top of the priority list or because putting money in the car takes money away from something else like food, rent, clothes, diapers, and gas. There is always a trade-off to every choice made and car maintenance falls short more often than not. Another problem caused by the vehicle asset test is that it deters families from owning a good, reliable car for fear that they might get their benefits taken away. As a result they stay relatively poor because they only make enough money to scrape by with the government assistance.

The argument in opposition to the bill was that there will be negative political “heat” on the program if the asset test were removed and the car value was unlimited due to fear that one recipient will drive up to the office in a Bentley or $250,000 car. The political heat the program could go under might be too much and could lose a lot of support from the general public and especially the people who never supported government welfare programs to begin with.

The author of the bill took this argument into consideration and noted that currently less than 1/10 of 1% of applicants are denied because of the asset test. The removal of the asset test doesn’t mean that all of a sudden there are going to be Mercedes, Lexus, or Bentleys parked outside of the welfare  offices, it just doesn’t happen that way. California is currently tied with Texas and Idaho in having the most restrictive asset test for vehicles of any state in the county. 12 other states have excluded all vehicles owned by the household; 15 exclude at least one vehicle per household; and 20 have substantially increased the value of the vehicle exclusion.   

The removal of the asset test will not only save California millions of dollars on wasted resources, but it also will help low-income families be more self-sufficient and work themselves out of poverty. The question that the legislature must answer is this: does the fallacy of a Bentley in front of welfare office out-weigh the millions in savings and the opportunity given to hardworking low-income families?

-Bosue Quinonez is an intern with the California Asset Building Program.