Page 3 - laco20200427budget

The Honorable Board of Supervisors
April 28, 2020
Page 3

Economic Outlook

Throughout 2019, the County experienced slow but positive growth as the economy
continued to expand since the Great Recession. Key economic indicators remained
strong as Gross Domestic Product, housing values, and household incomes moderately
grew while the unemployment rate declined. While these economic indicators were
forecasted to remain positive in 2020, the outbreak of the COVID-19 pandemic has
caused great economic uncertainty and disruptions. As mentioned above, my office is
continuing to monitor the budgetary impact of COVID-19 and will provide updates during
subsequent budget phases.

After consultation with the Assessor, we forecasted a 5.25 percent increase to the 2020
tax assessment roll for this budget. This forecast is preliminary, as the Assessor is
scheduled to issue its official forecast in May 2020 and release the final roll in July 2020.
We will continue to work with the Assessor to update assessed value projections. The
budget also assumed a slight growth in statewide sales tax. Given the early impact of
COVID-19, this assumption will be reevaluated in subsequent budget phases.

RECOMMENDED BUDGET HIGHLIGHTS

Children, Families and Seniors

 Senate Bill (SB) 80 Earned Income Disregard (EID)―Adds $46.3 million to the
Department of Public Social Services (DPSS), partially offset with State and
federal revenue, to support California Work Opportunities and Responsibility to
Kids (CalWORKs) cost per case increases resulting from the passage of SB 80,
which increased the EID from $225 to $500. EID is the amount of income excluded
when determining families’ monthly CalWORKs grants. This increase will reduce
the number of families becoming ineligible for CalWORKs because they exceeded
income limits due to the rising minimum wage.

 CalWORKs Stage One Child Care Program―Provides $5.2 million to DPSS to
align the Department’s childcare services budget with State and federal
allocations. The Stage One Child Care Program increases access to child care
services for CalWORKs participants continuously for 12 months or until the
participants are transferred to Stage Two.

 California Alternative Payment Program for Child Care―Adds $6.0 million to
the Department of Children and Family Services (DCFS), fully offset with State and
federal revenue, for childcare services vouchers for foster parents and
dependency-involved families.