Featured Policy: Fixing Food Stamps in California

golden ideas

for a progressive california

Fall 2010

Golden Ideas for a Progressive Cali fornia Pacific Regional Publication

National Director

Hilary Doe

Deputy Director Kurston C. Cook

Pacif ic Regional Coordinator

Erika K. Solanki

Senior Editor Amreen Rahman

Assistant Editor

Jenna Edzant

Content Editor and Legislative Advisor

Kevin Powers

The Roosevelt Institute | Campus Network

455 Massachusetts Ave NW Suite 650

Washington, DC 20001

In the fall of 2009 a group of student leaders andprogressive policy thinkers came together at the RooseveltWestern Regional Retreat to imagine a conference andpublication centered around the problems and unique policysolution to the most convoluted issues in California today.Months later “Golden Ideas for a Progressive California” islaunched as a student response to the numerous policy issuesthatplagueCalifornia.Thepolicymemosandwhitepapersinthispublication exemplify the creativity, thoughtfulness, and thepropensity to engage in the policy making process—characteristics not often associated with today’s college agedpopulation. An overarching theme of the pieces in thispublication is region specific solutions that tap into the uniquegeopolitical circumstances of California’s vast and diverseregions.

This publication could not have been launched withouttheeffortsofmanyindividuals. IwouldliketoparticularlythankKevin Powers, a Roosevelt Alum who selflessly edited policypieces in order to maximize legislative traction and relevance.Kevinworkedcloselywith theEditorialstaff intermsofcontentrevisions. His comments and suggestions were essential to thepublicationandhisuniquebackgroundasaRooseveltalumandas a legislative assistant to Assemblymember Marty Blockofferedaninsider’sinsighttoauthors,givingthemanideaoftheimportantcomponentsofastrongpolicyproposal.

We would also like to thank the Roosevelt InstituteNational Staff: Kurston Cook, the National Field Director, fortirelesslyhelpingandadvocatingforthesuccessfullaunchofthepublication and conference at every step; Tarsi Dunlop, theDirector of Operations and Administration, and Hilary Doe, theDirectoroftheRooseveltInstitute|CampusNetwork.

Sincerely,AmreenRahmanSeniorEditor

Copyright©2010bytheRooseveltInstitute.Allrightsreserved.

Theviewsandopinionsexpressedhereinarethoseoftheauthors.TheydonotexpresstheviewsoropinionsoftheRooseveltInstitute,itsofficers,oritsdirectors.

Ensuring Stable Revenues for California Ian Magruder, Diane Coppini and Ilana Newman University of California Berkeley

Fixing Food Stamps in California Rajiv Narayan University of California Davis

A Comprehensive Plan for Healthcare Infrastructure in California’s Heartland: Addressing Central Valley Healthcare Needs Megha Mahida and Amreen Rahman University of California Los Angeles

Mitigate Southern California Traffic: Coordination, Alternatives and a Congestion Price System Erika K. Solanki and Karl Taraporewalla University of California Los Angeles

Fixing Nutritional Access in Under-Served Urban Centers Torin Jones, Willis Hon and Ilana Newman University of California Berkeley Introducing Competition into California’s Prison Systems Brent Gaisford University of California Los Angeles

Combating Student Homelessness: 24-Hour Peer-Run Services Jenna Edzant, Joelle Gamble and Amreen Rahman University of California Los Angeles A Tax Revolution in California Kunitaka Ueno University of California San Diego

Implement Rehabilitation Programs to Reduce Prison Overcrowding Shah-Rukh Paracha University of California Los Angeles

Message from the Editors

cont

ents

Ensuring Stable Revenues for California

Ian Magruder, Diane Coppini and Ilana Newman, University of California Berkeley

History

California, the Golden State, was once at theforefront of education, innovation, and technology.Notonly isCaliforniarichwithdiversityandcreativity,but ithas also been consistently ranked as the fifth or sixthlargest economy in the world. Up to 2005, the stateexpanded services and spent freely; however, since theenergy crisis and the dot com bubble burst, CaliforniahasbecomethestateofNO:no funding for schools,nofunding for services, no funding for infrastructure.Revenues inCaliforniafluctuate,strainingthebudget.Intimesof lowand immobile earnings, thestate is forcedtomakecuts. Incontrast,during timesofhigh revenue,thestatespendsfreely.TorestoreCaliforniaasaleader,we must provide essential services for our residentsconsistently.

In March of 2004, California voters approvedProposition 58, establishing the Budget StabilizationAccount (BSA). This proposition requires the StateControllertotransfer3%oftheestimatedGeneralFundrevenues from the General Fund to the BSA. Thelegislature may transfer amounts in excess of thespecified percentage to the BSA. In addition, theGovernor,byexecutiveorder,maysuspend thetransferto the BSA. Subsequently, for the last two years, anymoney transferred into the BSA has been transferredback into the General Fund. The BSA currently has nomoney. California has another special fund, the SpecialFund for Economic Uncertainties (SFEU). Currently, anyunexpected revenues the state receives are depositedintotheSFEU.ItoperatesliketheBSA‐‐transfermoneyinfrom the general fund, or transfer money out to thegeneralfund.

Policy Alternatives

Given that both of California’s “rainy day”reserve‐funds, the SEFU and the BSA, are presently atlowlevelsandunable toserve thestatewhenrevenuesdecreasedramatically,reformisneeded.SincetheSEFUis a smaller fund primarily used for any unexpectedrevenues or expenses between budgets, this policyproposal focuses on reforming the BSA, which has agreater mandate to ensure the financial stability ofCalifornia. The following three recommendationswouldstrengthenandexpandtheabilityofthereservessothat

the reserves could provide funding for California whenthestatefacesbelowaveragerevenues.

Recommendation1:Expandthesizeoftherainyday reserve fund. Increase the size of the BudgetStabilizationAccount(BSA)fromthecurrentlevel,either5%of state revenues or $8 billion (whichever is higher)to 15% of revenues. This increase would bring the fullsizeoftheBSAtoanestimated$13.8billion inthenextfiscalyear.2Onceitreachesthenewcapacity,thelargerBSAwould give the legislaturea larger fundof reservesto draw from in case of natural disasters or dramaticdecreasesinrevenueduringeconomicdownturns.

Recommendation 2: Ensure that funds can beremovedwhennecessaryduring lowrevenue yearsandestablish criteria for what circumstances warrantremoval of funds. Pass a law that allows the legislaturetoremovefundsfromtheBSA.Fundswouldberemovedonly for emergencies – such as fires, earthquakes, andothernaturaldisasters–orwhenstaterevenuesarenothigh enough to match state spending level set in theprevious year, adjusted for population and inflationchanges. In order to protect reserves for the years inwhich they are most needed, BSA funds could not bewithdrawnforanyotherpurposes.

Recommendation 3: Ensure that funds will beaddedduring high revenue years. The Governorwill beable to only stop the BSA transfer in years when thestate does not have enough revenues to pay for statespending equal to theprevious year’s levelof spending,adjusted for population and inflation. This limitationwould ensure that the Governor does not suspend theannual transfer of General Fundmoney into theBSA intimeswhenrevenuesoutpacecosts,forexampleduringthe 1990’s economic boom,whenCalifornia had excesstax revenue that could have easily been shifted into araining day fund.3 In short, a portion of Californiarevenuesshouldbemovedintoafundtosaveforfuturetimesofeconomicdownturn.

Outcomes & Conclusion

Theultimateofgoalofthispolicyproposalisthestabilization of California’s budget in order to preventregressive tax increases and drastic cuts in funding forstate programs during periods of low‐revenue. Thetargets of recent cuts in state funding have beeneducation, healthcare, social services, and rehabilitativeandcorrectionalfacilities.Diminutionoftheseprogramsindividually

not only compromises thequality of life andwelfare ofvulnerable individuals, but is also a detriment to thewell‐beingandfutureprosperityofCaliforniaasawhole.Education The primary victims of recent state budgetinstabilityhavebeenstudents. According to theofficialLegislative Analyst Office’s 2009‐10 California SpendingPlan,thelargestsinglegroupofsolutionsadoptedduringthe budget process—totaling $14.5 billion—broughtProposition 98 spending for K‐14 educationdown to itsminimum guaranteed funding level under the StateConstitutioninboth2008‐09and2009‐10.4

Increasesinclasssizes,cancellingofsummerandafter‐school programs, and laying off teachers areexamples of the damages sustained by the statelegislature’s misguided prioritization of funds. Recentbudget cuts to higher education call into question thestate’scommitment toprovide its residentswithaccessto a high‐quality, affordable college education. In theabsence of funding, fewer Californians have theopportunitytoearnacollegedegreeatthestate’spublicuniversities. In the future, the state (and globaleconomy) will be in short supply of highly skilledworkers.

Ideally, the outcome of the proposed budget‐stabilization policies will guarantee the intransience offunds for educationbecause it will allow revenue to beutilizedforanaspectofthestateagendathattranscendspresentconcerns inpreparationforthefuture.ResearchbytheAmericanEducationalResearchAssociationshowsa correlation with higher reading and math scores ofelementarystudentsinstateswithnewlyreformedfiscaldiscipline, accountability, and transparency policies.Prevention of further budget cuts in education wouldbenefit current students as well as employeesexperiencingfurloughsandlay‐offs.Services The sector of health and human services, anessential resource for California’s most under‐served

citizens, also has been a prominent victim of fiscalvolatility. Recently the Governor vetoed $80 millionfrom the 2009‐10 appropriation for Child WelfareServices Program, the state legislature cut foster careprograms by ten percent, and the Healthy FamiliesProgramnowfacea$196millionstate fundingshortfallfor 2009‐10.5 In addition, General Fund support forcommunityclinicprogramshasbeencutby$35.1millionandpayment toMedical public safety‐net hospitals hasbeen reduced by ten percent, according to research bythe California Budget Project.6 Alongside thepreservationofcorporatetaxbreaks,thecontinuedlackof budget stabilization is clearly unjust. Furtherunderminingthestate’srevenuebasewillleadtofurthercuts thatplace theyoung, thesick,and thepoorat thebottomofCalifornia’sprioritizationhierarchy.Programs Otherprogramsthathaverecentlyfacedfundingcuts include correctional and rehabilitative facilities,publicworksplans,andinfrastructuremaintenance.Theproposedpolicieswould increasethesizeoftheBudgetStabilization Account, which would result in prolongedtransfermoneyat theannual3%rate fromtheGeneralFundintotheBSA. Thispresentsthe trade‐offofshort‐term set‐up costs with long‐term benefits of fiscalstability. ItwilltaketimefortheBSAtoreachexpandedsize, and the cost of reaching the target size will beshort‐term spending that is diverted into the BSA.However, when revenue is down in the future, cuts incrucialprogramspreviouslydiscussedcanbeavoidedbytapping into a strengthened and expanded BudgetStabilization Account. A study by the AmericanEducational Research Association shows a correlationwith higher reading and math scores of elementarystudents in stateswith newly reformed fiscal discipline,accountability,andtransparencypolicies. Preventionoffurther budget cuts in educationwould benefit currentstudents as well as employees experiencing furloughsandlay‐offs.

Sources

1"OfficialVoterInformationGuide."CaliforniaSecretaryofState.http://www.voterguide.sos.ca.gov/propositions/(accessedFeb11,2010).2"CaliforniaForward2010FiscalReformPrincipals."CaliforniaForwardActionFund.http://www.cafwd‐action.org/projects/2010‐reform‐p(accessedFeb9,2010)."Governor'sBudget2010‐2011."StateofCalifornia.8Jan2010.http://govbud.dof.ca.gov/StateAgencyBudgets/8000/9(accessedFeb17,2010).4McLean,Hilary."StateSchoolsChiefJackO'ConnellHighlightsImpactofBudgetCutstoEducation." CaliforniaDepartmentofEducationNewsRelease,3Jun2009,http://www.cde.ca.gov/nr/ne/yr09/yr09rel86.asp.5"HumanServicesandChildcare."CaliforniaBudgetProject.16Nov2009.http://www.cbp.org/publications/human_services_lan(accessedFeb13,2010).6Taylor,Mac."2009‐10CaliforniaSpendingPlan."California'sLegislativeAnalyst'sOffice.1Oct2009.http://www.lao.ca.gov/2009/spend_plan/spending_pla(accessedFeb10,2010).

"Official Voter Information Guide." California Secretary of State. http://www.voterguide.sos.ca.gov/propositions/ (accessed Feb 11, 2010).

Fixing Food Stamps in California

Rajiv Narayan, University of California Davis

Introduction

Until recently known as the Food StampProgram,theSupplementalNutritionAssistanceProgram(SNAP) functionsasa safetynet formillionsof families.By supplementing the income of their beneficiaries,SNAP improves its participants’ access to a healthy,completediet.Nationally,theprogramserves34millionpeopleamonth.3millionCaliforniansparticipate in theprogrameachmonth,though3millionmoreareeligible,butnotparticipating.1

This paper will consider the shortfalls of theCalifornian operation through an analysis of theprogram’s history, the program’s characteristics inCalifornia, and recent legislative developments in theState Assembly. It will then aggregate the key policypitfalls afflicting California, before finally appraisingpotentialcoursesofaction.

History

The Supplemental Nutrition Assistance Programbegan as a series of iterations under the name “FoodStamps.”Theinitialpurposeoftheprogramin1939wasto address what its first administrator, Milo Perkins,identifiedasagreatgorge–withagriculturalsurplusesonone side and underfed, unemployed urbanites on theother.2 When the program ended four years later in1943, it was because the conditions that predicated itsneednolongerexisted.Astheprogramfounditsoriginsinagriculture, ithas remainedunder theadministrationoftheUnitedStatesDepartmentofAgriculture.

Theprogramreappearedalmosttwodecadeslaterwiththebackingofseveralprominentsenators.Tofulfilla campaign promise to Virginia, John F. Kennedy’s firstexecutive order implemented a pilot version of theprogram in 22 states. Themore modern incarnation oftheprogramwasrealizedwhenLyndonJohnsonworkedwith Congress to formalize the law into permanentstature in 1964. Notable provisions inserted at thisjunction included the shared responsibilities foradministering the program between the federal andstategovernments.

Due to thegeographic expansionof theprogram,participation rapidly increased from the late 1960s

through the 1970s.Where onemillion individuals usedFoodStampsin1966,theprogram’sbenefitsreached15million by October 1974. This tremendous expansioncreatedcauseforaconcernthatcontinuestoframetheFood Stampsdebate: How canwe expand theprogramto help more, while still keeping the programaccountable?

The 1970s saw major legislative updates to theprogram; national standards for eligibility requirementswere implemented, funding schemes were adjusted tobalance the responsibility between states and thefederalgovernment,and theprogramwas expanded toaid every state. In 1977, the program was overhauledonce again in The Food Stamp Act, which includedprovisions to expedite access and tighten controls onfraud.

While legislation in the early 1980s cut backbenefits and limited eligibility criteria, the mid‐to‐late1980s sawamild expansionof theprogram to addressrising domestic hunger. To enhance the efficiency andeffectiveness of the program, Electronic TransferBenefits (EBT) began in 1988 (theuseof EBT cardswasuniversal across the country by 2004). EBT eliminatedtheneed for coupons, alleviating the concerns of thosewho felt stigmatized by their participation in theprogram.

After hitting a peak of benefiting 28 millionindividualsin1994,participationbegantowanethroughtheendofthedecade.Whilepartofthisdeclinecanbeattributedtofallingunemployment,muchof ithasgoneunexplained. One factor to consider is 1996 WelfareReform, which brought cuts and limitations to theprogram by removing certain population sub‐groups(adults without dependents and legal immigrants) fromthose able to benefit fully from the allotted aid.However, the 1997 Balanced Budget Act and the 1998Agricultural Research, Education, and Extension Actadjustedcertainprovisionstorestoresomeofthecutaidandmarginalizedgroups.

Asparticipationfellto17.2millionbyFY2000,theUSDA refocused on facilitating access to the program.Themajorpieceoflegislationintheearly2000sforFoodStampswasthe2002FarmBill (FoodSecurityandRuralInvestment Act of 2002). It restored several eligibilitycriteria, provided incentives for states with low errorinpende

counts in enrollment (and disincentives for states withrepeatedly high error counts), awarded performance‐means by which states could simplify program access,administration,andreporting.

Figures began to improve soon thereafter. By2006,participationreached26million.Paymentaccuracyincreasedfrom34percentinFY2000to94.12percentinFY2004.Owingtomarkedachievementsinaccuracy,theUSDAawarded24statesatotalof$48millioninFY2005.Since the beginning of the decade, 49 states haveadopted a simplified reporting system (with Californialeftover).

As non‐disaster participation reached an all‐timehigh of 29 million people per month in 2008, programaccuracy continued to improve. The 2008 Farm Billcommitted $10 billion to the program over thesubsequent 10 years. To keep with the tide of otherstates, the USDA changed the name of the program tofight stigma. It is now formally known as theSupplementalNutritionAssistanceProgram.

SNAP in California

The California Department of Social Services(CDSS) manages the program statewide. Benefits areaccorded tohouseholds,whichalsodoubleas themaineligibility unit. Households, not individuals, receivebenefits.3 Therefore, only when the household’s grossincome is lower than the eligibility criteria will thehousehold receive assistance. Within the eligibilitycriteria there are various exemptions and deductions.Forexample, ifelderlyordisabledpersons reside in thehousehold,thegrossincomelevelmaybehigher.Ifeachindividual in the household is receiving a recognizedform of assistance (such as CalWORKs), the householdbecomescategoricallyeligibleandautomaticallyqualifiesforbenefits.Unlesstheyareexempt,allbeneficiariesareexpectedtomeetaworkrequirement.

Although the CDSS manages the programstatewide, County Welfare Departments (CWDs) carrymuchof the responsibility for the administrationof theprogram, especially in determining household eligibility.TheUSDA financesall thebenefitsandhalfof the totaladministrationcostsborneby thestates.The remainingcosts are divided among the state and localgovernments,with the total splitbeing 50‐35‐15by thefederal,state,andlocalgovernments,respectively. InFY2009‐2010, the federal government contributed $602.9million to administration; the State contributed $418.4million,andthecounties,$158.9million.4

While SNAP is a federal program, states have theauthorityto“customize”theirprogrambyuseofoptionsaffordedtothembyfederallegislation,mostnotablythe2002 Farm Bill.5 It is through these options that stateassemblies legislate the administration of the program.The Food and Nutrition Service (FNS) of the USDAcollectsdataontheoptionsexercisedbyeachstate.

This paper will focus on these options, as theyrepresent the most amendable aspects of SNAP inCalifornia.Ahandfulofoptionsareofparticularinterest,andshouldbeheld incomparisontootherstates.Inthenext section, each noted option is expanded upon.Californiaisoneofonlytwostatesnottotakeadvantageofsimplifiedreporting.Californiaisoneof16statesnottoofferexpandedcategoricaleligibility.35stateseitherhave or are working on electronic applications –Californiaisnotoneofthem.

Recent Legislation in State Assembly

Of the six most recent legislative attempts tomodify a SNAP option, all but two have failed. In the2007‐2008 session, Assemblyman Jim Beall Jr. wassuccessfulinpassingAB433,abillthatservedtochangethe name of the program to SNAP and expandcategoricaleligibilitytoMedi‐Calrecipients.6Inthe2008‐2009 session, AB 719 (introduced by AssemblywomanBonnie Lowenthal) extended benefits to youth exitingthefostercaresystemfor12months.7

Inthe2008‐2009session,AB1057(Beall),AB1198(Swanson),AB643(Skinner)allfailed.8Hadtheypassed,they would have eliminated the statewide fingerprintrequirement, eliminated the lifetime ban on convicteddrug felons fromreceivingbenefits,andallowedcountywelfare departments to transfer a recipient’s benefitsfromone county to another (as opposed to requiring asecond application process). Most recently, AB 1642(Beall) has met its end in the 2009‐2010 session.5 AB1642 attempted to move California to a simplifiedreportingsystem.

Key Policy Concerns

At the policy level, twomajor concerns structuretheneedforreform.Oneproblemafflictingnearlyeverystate is the program's participation rate, the ability ofSNAPtoreachitsintendedpopulation.AnissueendemictoCaliforniaisitsprohibitivelyhighadministrativecosts.

The following sections will consider the structuralmotivationandmanifestationoftheseconcerns.

Performance as a Function of Participation

Since the passage of the 1993 GovernmentPerformance and Results Act, policymakers have beencompilingdataonprogramstogaugetheireffectiveness.The Supplemental Nutrition Assistance Program (SNAP)participation rates command the most attention fromthe USDA in this respect. Participation rates track thereachoftheprogrambydeterminingwhatproportionofthe eligible populationparticipates in the program. TheUSDA predicates their goals for SNAP on these rates,which are packaged together and released annually. In2010,forexample, theintendedgoal istoreach68%ofthe eligible population in the given fiscal year.10 In FY2007(thelatestyearforwhichthereisdata),66%oftheeligible population participated in the program.11 Thisindicator does not capture the wide variation betweenstates. Indeed, 17 states display participation ratessignificantlybelowthenationalaverage.12

Oneofthesestates isCalifornia,whichranks50

out of 51 when data includes the District of Columbia.Among theeligiblepopulation,only 48%participated inSNAP.While somestateshavemadeprogress in raising

their participation rate (Iowa, a noteworthy case,increasedtheirratefrom65%in2005to70%in2006to74%in2007.),Californiahasobservednolastinggrowth.

When comparing participation among theworkingpoor,Californiaranks lastat33%in2007,againwith no lasting growth.13 The disparity betweenCalifornia and the national average is starker for theworkingpoor.Whilethestate'sparticipationrateisonly37.5% lower than the national average for overalleligibility, itsparticipation rateamong theworkingpooris 70% lower than the national average. Discussedfurther below is the combination of institutionalobstacles that explain limited outreach to the latterpopulationsubgroup.

The Consequences of Low Participation

CharacterizingtheperformanceofSNAPthroughparticipation rates does not speak to the full extent ofCalifornia's significance as thenear‐worst ranking state.Nationally,SNAPbenefits34millionpeopleamonth.The3millionCalifornianbeneficiariescomprise roughly10%ofthenation'stotal.The3millionmoreCaliforniansthatare eligible, but do not participate, are weighing downthenationalrate.Duetothesizeofthestate,anyhope

of improving the national level is inherently tied toCalifornia'sabilitytoimproveitsownparticipationrate.

A more pressing concern is the tremendousopportunity cost California incurs when it fails to fullyenroll the eligible population. Because benefits arefinanced by federal dollars, increasing participation istantamount to bringing in free aid to the state. Indeed,recordsfromtheCaliforniaDepartmentofSocialServicesindicate that $469.8 million reached the 3 millionparticipating beneficiaries in February 2010.14 With 3millionmoreeligiblenotparticipating,thestateforegoes$3.7 billion in federal benefits each year.4 When apotential beneficiary does not receive the intendedfederaldollars,notonlydoes that individual struggle toputfoodon the table,butthestate losesaswell.Spentaid generates revenue for every level of government.Each year, estimates California Food Policy Advocates,the state budget loses a potential $121 million andcounty budgets lose $32million.16With both state andcounty administrations in a constant state of financialstress,theselostfiguresarenottrivial.

Finally, the state loses a substantial amount ofeconomic activity. To the benefit of local economicactivity,SNAPbenefits(formerlyknownasFoodStamps)mustbespentonfood.Becausethebenefitisamonthlyallowance, they cannot be saved or invested. As such,every dollar of spent benefits generates $1.84 ineconomic activity.17 For comparison, note that eachdollar of federal stimulus money generated $1.26 ofeconomic activity. Due to California's abysmalparticipation rate, the state foregoes $6.9 billion ineconomicactivityannually.

Barriers to Participation

TimeCommitment:

Foranapplicant todetermine the eligibilityandapplyforaid,heorshemustmakeatleastthreetripstothe appropriate local office. Trips include paperworkfiling, interviews,andeducationontheoperationoftheprogram. Studies have shown that applicants spend, onaverage, five hours applying for aid. Moreover, officesthat manage SNAP benefits have held traditional,weekday hours of operation since the beginning of theprogram. For an applicant to come in requires takingtimeofffromwork–timethatisusuallyuncompensated.Ifeligibleapplicantsareemployedduringthetraditionalworkdayhourstomakeendsmeet,theyarelesslikelytoapply for benefits. Under these restraints, it isconceivablewhyparticipationamongtheworkingpooris

QuarterlyReporting: Toremainenrolledintheprogram,beneficiariesmust report their financial status on an intervaldetermined by the state. Prior to 2002, five years ofsuccessive legislative efforts attempted to loosen theburden on monthly reporting. The argument then wasthat monthly reporting is both insignificant to theprogram's efficient operation and time‐consuming forthebeneficiary.Replacingmonthlyreporting(asperbillsAB 444 ad AB 692) is the marginally less austererequirement

Fingerprint‐Imaging:

California joins only three states (Arizona, NewYork, and Texas being the others) in imposing aStatewideFingerprintImagingSystem(SFIS)requirementon its applicants. While the stated reason forimplementing SFIS is to reduce fraud amongbeneficiaries, the State Auditor found that the costs ofthesystemmightnotcover itspotentialbenefits.18SFIS,which is maintained in a state‐run computer database,costs the state $8 million annually. To potentialbeneficiaries, this requirement is problematic on manylevels.Notonlyistheeligibleapplicantrequiredtocomein for fingerprint imaging, but everyone in theirhousehold must submit to fingerprint imaging as well.The stigma of being fingerprinted then becomes aproblemforboththeapplicantandeverybodyelsetheylive with, whether or not they eventually receivebenefits.

LackofOutreach:

The most recent survey data collected byCalifornia Food Policy Advocates suggests that theotherwise eligible candidates lack information abouttheir status and theprogram itself.While outreach is aconcern that ranks second to institutional barriers, ithelps explain lackluster participation rates. 71% ofeligiblepersonshavebeenshownto lacktheknowledgerequiredtoobtaintheirbenefits.19

Administering Benefits

Another source of program variation acrossstatescanbeobserved in thecostofadministration.Asstates have control over their eligibility procedures (asnoted above) and the systematic administration of theprogram, states control the costs of the program. The

costsofadministrationareborneequallybytwoparties,the state and federal government. A state with largeexpenses, then, is not only a burden unto itself, but itplacesfiscalpressureonfederalsupportaswell.

California has the largest caseload of any state,sothecostsofoperationarepredictablyhigh.However,the cost is not well correlated to the state population.When administrative costs are adjusted and measuredon a per case basis, California's costs are shown to be149%higherthanthenationalaverage.Whilethenationspends,onaverage,$469oneachparticipant,Californiamanagestospend$1169.20Acrossthenation,Californiaspends the most per case. Without population toaccountforadramaticdifferenceincosts,itiscrucialtocurbcostsandutilizefundsbetter.

Barriers to Curbing Costs

AppraisalofCosts:

There is a "black box" on state SNAPexpenditures. While the state and federal governmentshare the administrative cost of the program, thecounties within the state are the agents who actuallyadminister the burden. As they incur the first round ofcosts,theysendreceiptstotheCaliforniaDepartmentofSocial Services, which then reimburses them for theirexpenditures.Whenthesereceiptsaresentin,however,no detail is given as to how and where theadministration costs are manifest. Because Californiadoesnotknowthecompositionofitshighadministrativecosts,itcandolittletoreformthesystempresently.

ExtraRequirements:

Whileit isnotwellknownwhyCaliforniaspendsan exorbitant amount per case, multiple analystsstipulate thatcosts rise fromadministering theancillaryrequirementsthestateimposes.Notonlyisitdifficultforeligible applicants to come into a countywelfare officefor five hours over three visits, it is expensive forcaseworkers to handle each additional hour ofprocessing. Not only is it stigmatizing for applicants tosubmit to fingerprint imaging, SFIS costs the state asubstantial amount of dollars to maintain each year.Quarterly Reporting increases the burden onbeneficiaries, but it also imposes an extra filing andprocessingrequirementoncountycaseworkers.

Recommendations

StandardizeFace‐to‐FaceInterviewExemptions:

substantiallylowerthanoverallparticipation.

Federal law requires that State agencies conductat least one interview every 12 months with a SNAPbeneficiary. The interview requirement is among themost involved aspects of the application process, as itcalls for a prolonged physical appearance andquestioningperiod.There isprecedenceforreform.TheState of California grants exemptions for face‐to‐faceinterviews, as per a waiver granted by the federalgovernment. However, these exemptions are onlygranted in selected regions (as the chart aboveindicates). AB 231, which failed passage in 2004,provides a model for realizing this recommendation.When the requirement for a face‐to‐face interview iswaived,atelephoneisconducted.

ImplementElectronicApplications:

Though not all aspects of the application processcan be streamlined electronically, most forms in theprogramcanbefilledandrecordedelectronically.Thisisbeneficial for the administration of the program in atleasttwoways.First, itcutsdownontheworkrequiredby the County Welfare Department (as they no longerneed to transcribe the information onto a computerrecord). Second, it turns every internet‐capablecomputer into a site where a SNAP application can befilled. Even if the household does not have access to acomputer or the Internet, every public library nowbecomes an application site. At least 11 other states(such as New York, Pennsylvania, and Texas) have fullyimplementedelectronicfilingusing“e‐Signatures”.2

EliminateFingerprint‐Imaging:

This requirement was introduced due toconcernsthatSNAPwasawardingbenefitstofraudulentapplicants.However,theBureauofStateAuditsfoundinJanuary2003thattheStatedidnotdeterminetheextentof fraud before implementing SFIS at a cost of $31million. In2003,theDSShasrequestedinvestigationsof65householdssuspectedofmultiple‐aidfraudinagivenmonth, compared to the 660,000 households receivingbenefits then.22 This means $8.5 million is being spentevery year to eliminate fraud for less thanone‐tenthofonepercent of households receiving benefits. Since theinceptionofSFIS,theDSShasneverreleasedtheamountofconfirmedcasesoffraud.

TransitiontoSimplifiedReporting:

California currently require households receivingbenefits to report their income status every quarter. Amove to SimplifiedReporting cuts down the amount ofpaperwork required to report income, and changes the

requirementtosemi‐annualreporting.Givenfederallaw,California should not have the ability to demandquarterly reporting. The State has only been able tosustainthisactivitythroughaseriesofwaiversobtainedfromtheUSDA.Currently,80othergroupsinhavejoinedCaliforniaFoodPolicyAdvocatescallingfortheUSDAtoreject California’s most recent waiver.23 Before that,nearly half a dozen pieces of legislation have beenintroduced to make the transition to SimplifiedReporting.

Mandate Comprehensive Budget Breakdowns forCounties:

ThefirststeptoreducingCalifornia’sastronomicaladministration costs is to break open the “black box”that government analysts have alluded to. Instead ofrequiring County Welfare Departments only to submitreceiptsofSNAPexpenditures to theState, theyshouldbe required to submit detailed budget breakdowns oftheiractivity.Thisway, itbecomeseasierforanalyststosee exactly where exorbitant costs, if any, are comingfrom. Until then, SNAP administrative costs areuntouchabletoeveryauditingpower.

Conclusion: The Risks to Reform

This paper has thus far covered the benefitsCalifornia can expect to incur from overhauling SNAP.Every discussionof reform should also include the riskstoreform.SNAPisnotimmunetothenegativeeffectsofreform. The problems that result from specific policychangescanbegroupedintotwogeneralareas:

TransitionCosts:

Every element of reform will catalyze anexpensive transition. For example, an overhaul of theSFIScouldcostatleast$20millionintheshortterm.Thisis because SFISworks within a greater system of socialprograms. Removing it requires restructuring theoperation of several social programs in the state.Similarly, implementing electronic filing necessitates asystem for processing online applications. RequiringCWDstoreporttheirbudgetbreakdownsisalsolikelytorun a cost, as it requires time and a system to reportthesecosts,aswellastimetoanalyzethesecosts.

IncreasedFraud:

A high barrier to entry is maintained to preventindividualsfromreceivingmorefundsthan theymaybeeligible for. Reducing the barriers to entrywill increaseprogram participation, but it is likely to increasefradulent

fraudulent participation as well. This is because moreapplicantsandbeneficiariesarebothhardertotrackandexpensivetoaudit.

Ineithercase,thispapermakestheargumentthatthe benefits outweigh the costs. On the one hand,implementing the recommendations will help theadministration of the program run smoother. Even ifthere are transitional costs, the medium and long‐runbudget projections predict that that the

recommendationswill reduce program costs.Were therecommendations to further outreach, recall thatexpandedparticipationbringsinrevenuetotheStateaswell. Finally, the greatest benefit restswith thepeople.Though policymakers should remain cognizant of thebenefitstostreamliningaprogram, it ismoreimportanttoremember thatabetterprogramhelpsmorefamiliesput food on the table. When every policy has beenimplemented, this is the goal to which the programstrivestorealize.

Sources

1"OfficialVoterInformationGuide."CaliforniaSecretaryofState.http://www.voterguide.sos.ca.gov/propositions/(accessedFeb11,2010).2"CaliforniaForward2010FiscalReformPrincipals."CaliforniaForwardActionFund.http://www.cafwd‐action.org/projects/2010‐reform‐p(accessedFeb9,2010).3"OfficialVoterInformationGuide."CaliforniaSecretaryofState.http://www.voterguide.sos.ca.gov/propositions/(accessedFeb11,2010).4"CaliforniaForward2010FiscalReformPrincipals."CaliforniaForwardActionFund.http://www.cafwd‐action.org/projects/2010‐reform‐p(accessedFeb9,2010).5"Governor'sBudget2010‐2011."StateofCalifornia.8Jan2010.http://govbud.dof.ca.gov/StateAgencyBudgets/8000/9(accessedFeb17,2010).6McLean,Hilary."StateSchoolsChiefJackO'ConnellHighlightsImpactofBudgetCutstoEducation."CaliforniaDepartmentofEducationNewsRelease,3Jun2009,http://www.cde.ca.gov/nr/ne/yr09/yr09rel86.asp.7"HumanServicesandChildcare."CaliforniaBudgetProject.16Nov2009.http://www.cbp.org/publications/human_services_lan(accessedFeb13,2010).8Taylor,Mac."2009‐10CaliforniaSpendingPlan."California'sLegislativeAnalyst'sOffice.1Oct2009.http://www.lao.ca.gov/2009/spend_plan/spending_pla(accessedFeb10,2010).9AlexisFernandez,CaliforniaFoodStampsCharacteristicsReport,report(Oakland:CaliforniaFoodPolicyAdvocates,2010),pg.1.10UnitedStatesofAmerica.UnitedStatesDepartmentofAgriculture.FoodandNutritionService.AboutSNAP.http://www.fns.usda.gov/snap/rules/Legislation/about.htm(accessedJune10,2010).11LegalServicesofNorthernCaliornifa,andCaliforniaFoodPolicyAdvocates."1.Summaryofbasiceligibility~CaliforniaFoodStampGuide."CaliforniaFoodStampGuide.http://www.foodstampguide.org/summary‐of‐basic‐eligibility/(accessedJune10,2010).12UnitedStatesofAmerica.CaliforniaStateLegislature.AssemblyCommitteeonHumanServices.SupplementalNutritionAssistanceProgram(SNAP).January2009,pg.2.13UnitedStatesDepartmentofAgriculture.FoodandNutritionService.FoodStampProgramStateOptionsReport.ByProgramDevelopmentDivision.Washington,D.C.,2006.14"CFPA‐NutritionLegislationUpdate5.29.08."CaliforniaFoodPolicyAdvocates.http://www.cfpa.net/Alerts/5.29.08.html(accessedJune10,2010).15Canalis,John."Billwouldaddfosterchildrentofoodstamprollsatage18."ContraCostaTimes,June,2009.16UnitedStatesofAmerica.CaliforniaStateLegislature.AssemblyCommitteeonHumanServices.SupplementalNutritionAssistanceProgram(SNAP).January2009,pg.317"2010LegislativeTrackingPage."CaliforniaFoodPolicyAdvocates.http://www.cfpa.net/2010leg/index.html(accessedJune10,2010).18Cunnyngham,KarenE.,andLauraA.Castner.ReachingThoseinNeed:StateSupplementalNutritionAssistanceProgramParticipationRatesin2007.Report.Washington,D.C.:UnitedStatesDepartmentofAgriculture,2009,p.1.19CunnynghamandCastner,2009,p.1.20CunnynghamandCastner,2009,p.8.21CunnynghamandCastner,2009,p.8.22CaliforniaDepartmentofSocialServices.HealthandHumanServicesAgency.DataSystemsandSurveyDesignBureau.FoodStampProgramParticipationandBenefitIssuanceReport.201023UnitedStatesDepartmentofAgriculture.FoodandNutritionService.FoodStampProgramStateActivityReport.Washington,D.C.,2006.24UnitedStatesDepartmentofAgriculture.FoodandNutritionService.FoodStampProgramStateOptionsReport.ByProgramDevelopmentDivision.Washington,D.C.,2006,p.22.25Kruckenberg,Kami.FrequentlyAskedQuestions:SaveMoney,FightHunger,ReduceGovernmentWaste:EndFingerImaging.Report.Oakland:CaliforniaFoodPolicyAdvocates.26"Re:CaliforniaSNAPWaiverExtentionRequest."CaliforniaFoodPolicyAdvocates,GeorgeManalo‐LeClairtoJaneyThornton.July31,2009MarkShimada,Tia.LostDollars,EmptyPlates:TheImpactofFoodStampParticipationonStateandLocalEconomies.Report.Oakland:CaliforniaFoodPolicyAdvocates,2009,p.3.27Shimada.LostDollars,EmptyPlates,2009,p.3.28Shimada.LostDollars,EmptyPlates,2009,p.2.29CaliforniaStateAuditor.BureauofStateAudits.StatewideFingerprintImagingSystem:TheStateMustWeighFactorsOtherThanNeedandCost‐EffectivenessWhenDeterminingFutureFundingfortheSystem.ByElaineM.Howle.Sacramento,2003.30KnockingDownBarrierstoFoodAssistance:AShortProgressReportforCalifornia.Report.Oakland:CaliforniaFoodPolicyAdvocates,2004,p.5.31UnitedStatesDepartmentofAgriculture.FoodandNutritionService.FoodStampProgramStateActivityReport.Washington,D.C.,2006.32UnitedStatesDepartmentofAgriculture.FoodandNutritionService.FoodStampProgramStateOptionsReport.ByProgramDevelopmentDivision.Washington,D.C.,2006,p.22.33Kruckenberg,Kami.FrequentlyAskedQuestions:SaveMoney,FightHunger,ReduceGovernmentWaste:EndFingerImaging.Report.Oakland:CaliforniaFoodPolicyAdvocates.34"Re:CaliforniaSNAPWaiverExtentionRequest."CaliforniaFoodPolicyAdvocates,GeorgeManalo‐LeClairtoJaneyThornton.July31,2009

A Comprehensive Plan for Health Care Infrastructure in California’s Heartland: Addressing the Health Care Needs of the Central Valley

Megha Mahida and Amreen Rahman, University of California Los Angeles

Inordertoaccommodatethegrowingneedforprimary,preventativecareforruralunderprivilegedmembersoftheCentralValley,acomprehensivehealthcaresystemmustbeestablishedthroughtherestructuringofsafetynet hospitals, institution of sustainably funded clinics, expansion of employed community healthworkers, andcreationofasystemoftelemedicine.

History

Safety net health systems providecomprehensivecoverageforuninsured,lowincome,anddisadvantagedpopulations.Thus, their institution in theCentral Valley can well address the needs of thepopulationwhich is largely rural,uninsured,andsuffersfrom a higher rate of chronic diseases. Currently thehealth system in place largely includes communityhospitals and clinics. It suffers from overcrowding inemergency rooms as a result of the greatly uninsuredpopulationwhichrelieson theERforprimarycare.Thischaracteristic of the population is also related to theshortage of healthcare workers in the Central Valleyregion.Thenumberofcurrentfederalhealthcarecentersin the Central Valley is 206 out of 961 total healthcarecenters in California. This assessment refers to theCentral Valley as a region spanning 42,000 miles downCalifornia, and is indicative of the Central Valley’s vastsize and fragmented system of strained access tohealthcare.2 The systemof healthcare fundingprovidedona local,state,andnational level in theCentralValleyis inadequate for providing coverage for the over846,000CentralValleyresidents;itisfurthermoreunabletosustainproficientlevelsofhealthcareworkersneededtooperateeffectiveprogramsofpreventativecare.3Thiscurrentsystemisinefficientinitsrelianceonemergencyroom care to address the chronic illnesses and primarycare needs of the rural and uninsured residents of theCentralValley.Thelackofwidelyaccessibleprimarycareis not cost‐effective. As a result, more governmentfundinggoesintoacutecare,involvingthecomplicationsthat result when preventable primary care illnesses gountreated.

Analysis

In order to adequately address the health care crisis in the Central Valley, a bottom up approach must betaken to rectify every level of health care. The mainprovidersofhealthcaretoindividualswhoareuninsuredor insured through Medi‐Cal are safety‐net providers.

These include community health centers, clinics, publichospitals, and private safety net designated hospitals.Out of all of these providers, the only institutions toreceivefundingfromthefederallevelundertheauspicesofbeinga"ruralfederallyqualifiedclinic"arecommunityhealth centers. Thus, many health care systems beardisproportionate costs of the uninsured. Furthermore,individuals who are insured through Medi‐Cal arefunneled into these safety net providers, leading tooverburdened hospitals and clinics that simply do nothave the resources to accommodate and adequatelytreat the large number of patients. Many healthcaresystems in the Central Valley are funded throughMedicare. However, Medicare pays hospitals in theValley 56‐75% of average national rates.4 This level ofpaymentisnotonlyinadequatetomeettheneedsoftheCentral Valley and its large uninsured and underservedpopulation, but also forces hospitals to decrease thearray of services offered. The Central Valley has in factone of the lowest Medicare fee‐for servicereimbursements in thecountry.5With thepopulation intheValleyexpectedtogrowsignificantly inthenextfewyears, coupledwitha largeagingpopulation, the fragilestateofsafetynethospitals issuretobeexacerbatedinthecomingyearsifnoactionsaretaken.Due to several factors, including but not limited to alargepopulationandthenomadicnatureofsomeofthepatients,careathospitals intheCentralValleyfocusonacute care and ignore the chronic diseases thatexacerbate thehealth of individuals living in theValley.Oneindicatorofchronicdiseasesistherateofobesity.AstudybytheCentralValleyHealthPolicy Institutefoundthat the percentage of overweight and obese adults,adolescents, and seniors were significantly higher thanthe state average across the board.6 Other chronicdiseases, primarily diabetes and asthma, also affect a ilarge proportion of Central Valley residents. The 2005California Health Interview Surveyreported that theValley had higher rates of individuals with asthmareceiving emergency care than all other regions inCalifornia.7 In fact, in an analysis of indicators of healthindepdent

status: adult obesity, adult tobacco use, motor vehicledeaths, air quality, flu shots for elders, and access toprenatalcare,theValleyscoredfarbelowtheCaliforniaaverage.8 There are more factors that exacerbatehealthcareintheValley.By in large ispoorerthanmostotherregionsinthestate.50%oftheregionhasincomesunder200%ofthefederalpovertyline,incontrasttothestate average of 34%.9 The Valley also has higherunemploymentratesthanthoseoftwo‐thirdsofoutsideCaliforniacounties. Also therehas recentlybeena largeinflux of new residents into the Valley. According toestimates, by 2050 six counties from theCentral Valleywill be among the fastest growing countries inCalifornia.10

Audience and Stakeholders

County officials would be interested inimplementing a system of safety net hospitals whichwould take advantage of already existing infrastructureandwouldinvolveincreasingtheemploymentofprimarycare community health workers and tech companies.Creating a comprehensive safety net hospital systemfocused on fulfilling the uninsured and underprivilegedcommunity's basic medical needs would necessitatemore healthcare as well as telemedicine, which wouldspecifically target the populationswith nodirect accesstohospitals.ItistothefinancialbenefitoftheCaliforniaStateAssemblyandCalifornia taxpayers tosupport theinstitution of a system of safety net hospitals in theCentral Valley. The system's change in focus fromproviding acute care to primary care for uninsured,vulnerableresidentsoftheregion,willinthelongrun,bemore cost‐effective and sustainable. Perhaps, mostcritical is the increased access to healthcare for thosewho currently fall into the gaps of federal fundingprograms, which in the Central Valley includes manyimmigrantsandfarmworkers.

Next Steps

In order to address the disproportionate funds thatsafety hospitals in the Central Valley receive inproportion to the levels of uninsured and Medicalpatients, theguidelinesforfundingshouldbereformed.There should be an increase of funds to national percapita levels.11 In order to make this level of fundingsustainable,anewmethodologyought tobedevelopedin order to account for the diverse geography of theCentral Valley which includes a mix of both urban andrural areas.12 Furthermore, in upcoming allocations ofthe budget for healthcare, the growing needs of theCentral Valley in healthcare ought to behighlighted.

Often the rural parts of California are ignored becausetheysimplytonothavetheconstituencyorthelobbyistgroups to further their cause. The Central ValleyaccountsforasignificantproportionofCalifornia'sGDP.If Central Valley residents are not able to accessadequate healthcare, the productivity of workers willdrasticallydecrease,especiallywhentakingintoaccountthechronicnatureofmanyoftheailmentsoftheValleyresidents.Thusthehealthoftheregionisdirectlyrelatedtoeconomiccosts.Preventativecaremustbeasmuchofapriorityasacutecare. Currently, the Valley's emergency rooms arefloodedwithcasesfromindividualswithchronicdiseaseslike asthma and diabetes, whose conditions have beenexacerbatedduetothelackofprimaryandpreventativecare. In order to reform this, all safety net providersoughttobefundedtofacilitatethisrefocusingofcaretothe preventative side. Specifically these funds ought tobe allocated in order to increase outreach andeducational programs that help manage chronicdiseases.13Thistypeofoutreachisparticularlykeywhentaking into account the socioeconomic status of thepatientswhogotosafetynetclinics.Another step thatmust be taken to address thehealthcaresituation in theCentralValley is thehugeshortageofhealthprofessionals.TheCentralValleyhasthelowestnumberofprimarycareandspecialtydoctorscomparedto every other region in the state. Furthermore, theregionlacksmidlevelhealthcareprovidersaswell,suchas nurses, nurse’s assistants, and physician’s assistants.The root causeof this shortage isacoupling of the lowreimbursement rates due to the primarily uninsuredpopulation, and the fact that these professionalsgenerally find the Central Valley undesirable. In fact,manyresidentsthatarerecruitedtodotheirresidenciesin the Central Valley often are not interested incommunityhealthclinicsandsoonleavetheValleyaftertheirresidencyends.14 Inordertotackletheshortageofhealth care workers, there have to be both long termand short term approaches. A short term approach tosolvethegapofhealthcareproviderswouldbetomakenurses and physicians assistants more autonomous, whichwould increase thepatient load that clinicscouldaccommodate. Long term strategies would includecreating incentives for doctors ‐ both primary andspecialtycare‐toliveandpractice intheCentralValley.Potential incentives that could facilitate an influx ofmedicalprofessionalswould includesubsidizing the gapin reimbursement.15Also,a largenumberof residenciesintheCentralValleygotoforeigneducateddoctorswho

Sources

1“FederallyQualifiedHealthCentersandStatePolicy,”CaliforniaHealthcareFoundation(2009)<http://www.chcf.org/documents/policy/FederallyQualifiedHealthCentersAndStatePolicy.pdf>2CentralValleyPoliticalReport(2010)http://centralvalleypac.com/centralvalleypr/Default.aspx3“CentralValleyHealthReform,”HealthAccess(September17,2009).www.health‐access.org/.../Central%20Valley%20Health%20Reform%209‐17‐09.pdf4Capitman,JohnA.,andDeborahG.Riordan.“GrowingaHealthierSanJoaquinValley:RecommendationsforimprovingthePublicHeathandHealthcareInfrastructure,”CentralValleyHealthPolicyInstitute.(January2007)http://www.csufresno.edu/ccchhs/documents/CVHPI_recomend0107.pdf 5Ibid6“CentralCalifornia:RegionalObesityPreventionProgram,”CaliforniaCenterforHumanandHealthServices(August31,2010).http://www.csufresno.edu/ccchhs/institutes_programs/CCROPP/publications/CCROPP_onepager8press_cropped.pdf7Capitman,JohnA.,andDeborahG.Riordan.“GrowingaHealthierSanJoaquinValley:RecommendationsforimprovingthePublicHeathandHealthcareInfrastructure,”CentralValleyHealthPolicyInstitute.(January2007)http://www.calendow.org/uploadedFiles/health_reform_2007.pdf8Ibid 9Ibid 10Ibid 11“HealthPromotingSchools”CentralCaliforniaCenterforHealthandHumanServices(2010).http://www.csufresno.edu/ccchhs/documents/HPSReport‐FinalCopy.pdf12Ibid 13Ibid 14Ibid 15Ibid

16Rahman,MohammadA.,KudzaiNyandoro.“TelemedicineintheSanJoaquinValley:OpportunitiesandBarriersinAdoption,”CentralValleyHealthPolicyInstitute.(December2009).http://www.csufresno.edu/ccchhs/institutes_programs/CVHPI/publications/Telemedicine_Barriers_in_SJV.pdf 17“FCCEmphasizesTelemedicineinPreviewofU.S.BroadbandPlan,”iHealthBeat:ReportingTechnology’sImpactonHealthCare(February22,2010).http://www.ihealthbeat.org/articles/2010/2/22/fcc‐emphasizes‐telemedicine‐in‐preview‐of‐us‐broadband‐plan.aspx?topic=telehealth

often soon leave the Central Valley. Increasing thenumber of residencies and including a requirement forclinic hours and a number of years of practicing in theCentralValleywouldhelpmeettheneedsoftheCentralValley intheshortterm.But inorderfor truelongtermsustainable retention of medical professionals in theCentral Valley, theremust be amedical school in orderto act as a hub for providing health care professionalsinterestedinruralhealthandpracticingintheValley.UCMerced is the most viable option for such a medicalschool. Given the number of California applicants thatare turned away from schools focused on primary care(UCIrvine,UCDavis),thereisahugedemandforanewUCmedicalschool.Asidefromhealthcareprofessionals,with MD/DO degrees, there is a huge need for publichealthworkerstofacilitatecommunityhealtheducationandoutreachprograms.Inordertoincreasethenumberof public health professionals, similar educationprogramsandincentivesshouldbeestablishedtoattractandtraincommunityhealthcareworkers.Telehealth has expanded to include a wide range of healthcareservices fromassimpleandstraightforwardasplanningappointmentsandrefillingmedications,toascomplex as diagnosis of retinopathy. TheCentral Valleyserves to benefit immensely from a cohesive andefficienttelehealthnetwork.Duetothevastruralareas

in the Central Valley, often times it is not logisticallypossible for many residents to access clinics andhospitalsthatarefarremovedfromtheirresidence,ortofollowuponvisitsinatimelyfashion.Furthermore,two‐thirds of Central Valley residents have computers andapproximately 60% have access to the internet. In thepast there have been several initiatives to establishtelehealth programs in the Central Valley. CaliforniapassedtheTelemedicineDevelopmentActof1996whichreimbursed the establishment of telemedicine services.Therehavebeenafewsuccessfultelemedicineprogramsin the Central Valley that are key indicators for thepotentialsuccessofacohesivemoreuptodatenetwork.TheCentral CaliforniaTeleophthalmologyNetworkusedhigh techcameras tosend imagesof retinasofpatientstospecialistsinordertodiagnoseretinopathy.TheKingsView Behavioral Health centered in Fresno, providedmental health services to rural parts of the Valley.16 AtelehealthnetworkwouldnotbefiscallyirresponsibleastheFCCiscurrently in launchinganinitiativeto increasetelehealth. It recently granted $145 million to 16telehealth projects and has extended the deadline toapply for funding for a year. Furthermore, the FCC isincreasing broadband access to rural parts of America,whichwouldsolveforthebarrierofslowinternetwhichhaspreventedtheadoptionoftelehealthinthepast.17

Mitigate Southern California Traffic: Coordination, Alternatives and a Congestion Price System

Karl Taraporewalla and Erika K. Solanki, University of California Los Angeles

In order to adequately address the convoluted socio-economic issue of traffic congestion, policymakers must consider the unique geo-political aspects of the greater Los Angeles area. By systematically addressing coordination, enhancing public transportation alternatives, and gradually implementing a congestion pricing system on all Southern California freeways, policymakers will implement a long-term, comprehensive solution to traffic alleviation.

History

Residents in major cities are becomingincreasingly irritated by traffic and congestion as dailycommutes increase. Negative externalities such as airpollutionaremoreapparent,andpublicalternativesarebeingdevelopedand improved tooslowly.According tothe RAND Corporation California Traffic CongestionStatistics database, since 1982 Southern Californiafreeways have consistently ranked first in annualcongestioncosts. Strong gubernatorial leadership is critical toassisting participants in overcoming barriers to achievecoordination.Inordertogarnersupportforcoordinationefforts, Maryland officials organized a series of forumson transportation to introduce the concept ofcoordination, view the proposed process, and facilitatediscussion among stakeholders. Furthermore, NewJersey’sGovernorestablishedaninteragency taskforce,New Jersey’s Intergovernmental Transportation WorkGroup, which provides a roundtable platform forstakeholderstocooperateandcollaborate.2 Multiplestudieshaveproventhat limitedaccessto reliable transportation serves as a barrier to gainingand maintaining employment. In response, in 1998Congress authorized the Transportation Equity Act forthe 21st Century (TEA‐21), a federal transportationfundingbillthatpromoteslocaltransportationinitiatives,which connect low‐income citizens to employment.Under TEA‐21, Congress approved the Job Access andReverse Commute (JARC) program to fund newtransportationservicesandtheimprovementofexistingservices.3 In order tomeet comprehensive transportationneedsinSouthernCalifornia,thestatelegislatureshouldprimarily advocate for three initiatives in the followingorder: (1) increase the overall coordination of publictransportation systems within the region; (2) increasethereachandfrequencyoftheMetrotransitbusesthatare operated by the Los Angeles County Metropolitan

Transportation Authority to better serve lower‐incomeresidents that are adversely affected by inadequatepublic transportation systems; and (3) with overallenhanced public transportation alternatives available,implement a congestion pricing strategy gradually onSouthernCaliforniafreewaystocurbtraffic. Thegovernorcaninitiatecoordinationeffortsbyestablishing an interagency task force that fosterscooperation and collaboration among regional transitproviders. Successful implementation of coordinationmechanismswill increase transportationavailabilityandaccess to jobs, enhance transit system and servicequality, improve cost effectiveness, and eliminateduplicativeefforts. The Los Angeles County MetropolitanTransportation Authority should increase the reach andfrequency of its limited bus lines, including the MetroRapidandMetroExpressservices.AlthoughthepassageofMeasure R and the expansionof the subway systeminto West Los Angeles will eventually provide a publicalternative and mitigate congestion, the completion ofsuchlargescaleprojectsinterruptcurrenttransportationroutes,involvelong‐termconstruction,andrequirelargefunding grants. The expansion of bus routes and anincrease in the number of time‐efficient buses inoperationare logisticallyfeasiblerecommendationsthatwill provide immediate relief to commuters andrelativelyminimalcosts. It is critical for policymakers to institutecoordination mechanisms and expand limited bus linesto enhance access to affordable and reliabletransportation alternatives before using congestionpricingasa fairand equitablemethodof pricing traffic.Ascurrentlyproposed, the carpool lanesalong14milesof the 10 freewayand11milesof the110 freewaywillbeconvertedfromhighoccupancyvehicle(HOV)lanestohigh occupancy toll (HOT) lanes. Those that choose touse the HOT lanes will be subject to fees of $0.25 to$1.40permile.EachdriverthatmightpotentiallyutilizeHOT lanes must purchase a pass and place it in their

indepent

vehicle.ElectronicmonitoringdevicesinstalledalongtheHOT lanes will detect when a car is utilizing the HOTlanes, identify its pass, and charge the driverproportionaltousage.4

Key Facts

• According to the RAND Corporation California TrafficCongestion Statistics database, Los Angeles areacommuters in 2006 spent approximately 39 hourswaiting incongested freeways.Thesamestudy foundthat annual congestion costs increased from $1.69millionin1982to$10.16millionin2006.7

• AlthoughtheU.S.DepartmentofTransportation(DOT)largely funds state and local public transportationservices, various other federal departments alsoprovide transportation funding through 41 differentprograms, resulting in an overall lack of coordinationamong regional public transit programs, andfragmentedandduplicativetransportationservices.

• Several studies suggest that welfare recipients andlow‐income residents face several barriers toemployment, with adequate and reliable access totransportationattheforefront.8

• According to a study sponsored by the Urban MassTransit Administration, the cost‐effectivenessofabussystem to provide efficient transit is far greater thanheavyor light rail transit systems inmediumand lowdensitycities.9

Talking Points

• TheNationalGovernor’sAssociationCenter for BestPracticeshasdubbedcoordinationahighlyeffectivetoolthatenhancestransportationservicesatlittleornoadditionalcosts.

• TheMetroExpressoffersreduced‐stopservicealongthe extensive Los Angeles freeway system. Sincemany lower‐income residents live in neighborhoodsdistantfromemploymentopportunitiesandwithoutregularaccesstoreliableformsoftransportation,anincrease inquality, reliability,access,and frequencyofMetroExpressbusesareespeciallynecessary.

• London, Singapore, Stockholm, and New York Cityhave all successfully instituted congestion pricingsystems that have reduced traffic congestion andgenerated substantial revenue. In these cities thereis relatively elastic demand for transportationservicessinceconvenientandaffordablemasstransit

alternatives are already in place, permittingcongestionpricingasanequitablemethodofpricingtraffic.

Analysis

Sustainablecoordinationiscriticaltoperpetuallyenhance transportation services. Transportationcoordination addresses multiple needs and goals withlimited resources by consolidating services andeffectively minimizing costs. The creation of formalcoordination mechanisms will allow the Governor toprovide more effective transportation solutions tofurther mitigate negative externalities from inadequatepublic transit systems. Greater coordination coupledwithanexpansionofa reliablebussystemwill increasethe ability of lower‐income residents to obtain andmaintain employment. Improving thequality, reliability,access,andfrequencyoftheMetrobuslineswillprovideanattractivealternativetodrivingprivatevehicles.

Next Steps

The ability of officials to price traffic as acommoditytofurthermitigatethenegativeexternalitiesoftrafficiscontingentupontheabilityofpolicymakerstoestablish a well‐developed, accessible and affordablealternative. Therearemanywaysthattheimplementationofan interagency task force as well as the furtherdevelopment of rapid bus lines can be funded to bemore budget neutral and lower the burden on the taxpayers of Los Angeles. The Federal Transit Authority(FTA) has developed a “New Starts” program used tohelpfundtransitprojectsthatmeetcertaincriteria.Sincethe New Starts program is funded by the FTA Section5309grantprogram,expansionoftherapidbuslinesandimplementation of the interagency task force can befundedinpartbythisfederalgrant. InJanuary2010theNew Starts program shifted their policy to fund thoseprojects that would reduce cost and time of dailycommutes while focusing on issues such as economicdevelopment opportunities and the environment.5According to Sections 5309 and 5318 of the program,eligible projects include those that “include thepurchasing of buses for fleet and service expansion”alongwithotherrelatedequipmentandfacilities.6 Theproposalsmade in thispapercangoa longway to meeting and implementing the criteria that arenecessary to receive funding from the New Startsprogram, and all in all will result in less of a financialburden on the residents of Los Angeles, and a budgetneutralsolutionforthestateofCalifornia.

Sources 1RANDCaliforniaTrafficCongestionStatistics."RANDCalifornia:ComprehensiveCaliforniaandU.S.StatisticsonEconomics,Demographics,Education,Health,Environment,CommunityandGovernmentFinance.Web.08Nov.2010.<http://ca.rand.org/stats/community/trafficcongestion.html>.2"ImprovingPublicTransportationServicesthroughEffectiveStatewideCoordination."NGA.2002.Web.8Nov.2010.<http://www.nga.org/cda/files/011503IMPROVINGTRANS.PDF>.3BlumenbergE.Onthewaytowork:Welfareparticipantsandbarrierstoemployment(2002)EconomicDevelopmentQuarterly,16(4),pp.314‐325.4Weikel,Dan."L.A.CountyConsidersCongestionPricingfor110and10Freeways‐LosAngelesTimes."TheLosAngelesTimes.09June2009.Web.08Nov.2010.<http://articles.latimes.com/2009/jun/09/local/me‐tollway9>.5"NewStartsPolicyShift:January2010."FederalTransitAdministration.Jan.2010.Web.08Nov.2010.<http://www.fta.dot.gov/planning/newstarts/planning_environment_11045.html>.6"BusandBusFacilities(5309,5318)."FederalTransitAdministration.Web.08Nov.2010.<http://www.fta.dot.gov/funding/grants/grants_financing_3557.html>.7RANDCaliforniaTrafficCongestionStatistics."RANDCalifornia:ComprehensiveCaliforniaandU.S.StatisticsonEconomics,Demographics,Education,Health,Environment,CommunityandGovernmentFinance.Web.08Nov.2010.<http://ca.rand.org/stats/community/trafficcongestion.html>.8Ibid9Kain,J.F.(1988),Choosingthewrongtechnology:Orhowtospendbillionsandreducetransituse.JournalofAdvancedTransportation,21:197–213.http://www3.interscience.wiley.com/journal/123245949/abstract

program, and all in all will result in less of a financialburden on the residents of Los Angeles, and a budgetneutralsolutionforthestateofCalifornia.

Fixing Nutritional Access in Under-Served Urban Centers

Torin Jones Willis Hon and Ilana Newman, University of California Berkeley

Localgovernmentswithunderservedurbancenterscanutilizeestablishedcommunity‐basedorganizationstoaddressissuesoffoodsecurityandaccessibilitytonutrition.

Key Facts

• Chronically malnourished children lack thenutrients needed for proper health anddevelopment.

• WestOaklandhaslongbeenunder‐servedingroceryretail.

• The community depends on themore than40 convenience stores to provide food,resulting in malnutrition and constant foodinsecurity.

• These convenience stores provide poorquality preprocessed foodstuffs for pricesthatare30%‐100%morethansupermarkets.

• Poor nutrition and eating habits arereinforced at a young stage leading tolifelongnutritionissues.

• TheCityofOaklandhastheabilitytotakeanactive role to reinforcepropereatinghabitsandprovidefreshfoodforthisunder‐servedcommunity.

History

Children can become malnourished for reasonsthat have nothing to do with hunger. This malnutritionarises from a lack of food that provides the rightnutrients, vitamins, and minerals. Many inner‐city andlow‐income communities in California suffer frommalnutrition and undernourishment. Federal foodassistance programs currently employed have lowparticipationratesanddonotaddressissuesinregardtothe retail landscape of West Oakland. However,community‐based solutions for addressing chronicmalnutrition are extremely viable. The community ofWestOaklandintheCaliforniaBayAreaisanexampleofan underserved community that could greatly benefitfrom the implementation of a nutrition programinvolving the local government utilizing and assistingcommunity based organizations in providing food andknowledge(Said2009).TheWestOaklandcommunity iscurrentlyunderservedbyretailgrocerystores,leadingtochronic malnutrition and food insecurity among itsresidents(People'sGroceryn.d.).

West Oakland can utilize existing organizationslikeThePeople’sGroceryandMandelaFoodCooperativeto organize food distribution and nutritional educationfortheresidentsofWestOakland.ThePeople’sGroceryrunsacommunity supportedagricultureprogramcalledthe Grub Box program (People's Grocery n.d.). Theprogramprovidesaffordableboxesoffresh,organicandlocally‐grownproducewhichfeedsafamilyoffourforaweek. Similarly, Mandela Foods Cooperative isattempting to provide a full‐service grocery store andnutritional education center in West Oakland. Bothorganizationsaimtosatisfyimmediatefreshfoodneeds,provide nutritional education, and alleviateunemployment in West Oakland (Mandela Foods n.d.).Malnutrition and food insecurity are underlyingproblems that the City ofOaklandmust address if theywant tobegin to tackle othermoreprominent citywideissues. The city can accomplish this with an activecampaignutilizingthehelpoftheexistinglocalNGOs.

Analysis

Avarietyoftrade‐offsexistinchoosingtoleavethetaskof confronting the epidemic of food insecurity in WestOakland to a multitude of non‐profit organizations andcooperatives with little federal funding support. Thisincludes the difficulty experienced by researchers toobtain information about food insecurity aswell as theexisting responsive initiatives spread across multitudesof disjointed organizations. In addition, the marketsystem fails to internalize the detrimental externalitiesassociated with food insecurity, including high costs ofhealthcareandemergencyfooddistribution.

In recognizing the current economic situation ofCalifornia and local governments, utilizing and assistingthese community‐basedorganizations in providing foodand knowledge is a practical way to address the issue.The City of Oakland could save both money andmanpower by working with existing programs likePeople’s Grocery and the Mandela Food Cooperativewhich already have respectable reputations and namerecognitioninthelocalcommunity.Barriersthatremainfortheseorganizationsincluderesidentapathyorsimplynotknowing theyexist.Usingcityevents thatshowcasegood eating habits, city officials can guide residents towoww

these organizations and assist them with utilizing theirservices.Thecitygovernmentcanalsoutilizecity‐ownedspacessuchparksandbuildingstofacilitatetheactivitiesofthecommunitybasedorganizations.

Organizing a new farmers’ market in West Oakland isanother alternative for the city to consider, but thecurrent financial reality of the city would hamper itssuccess. Due to transportation costs and the smallvolume of produce sold, farmers may have to chargehigh prices in order to meet operating costs. For themarket to have a noticeable benefit for low‐incomefamilies,organizersmustbeabletooffertheproduceatlowcost.Private for‐profit suppliers can be contracted by thegovernment to enable development of commercialsupermarkets and grocery stores, improving the retaillandscapeandtheoretically,producingoutputefficientlysothatsocietygains. Installmentof largenationalchaingrocerystoreswouldprovidejobsaswellasrespondtotheproblemofinaccessbylow‐incomeresidentsofWestOakland to appropriate food retail establishments.Contracting for‐profits as a policy to combat foodinsecurity would be inefficient, however, due to theextremely high costs of implementation including start‐up capital, gross revenuepotential, and thepercentageof gross revenue required to maintain operations.2

Corporatetaxdeductionsandcreditscanbeawardedtocompanies so that they face lower costs to engage inactivitythatsupportstheobjectivesofthecommunity,inthiscasefoodsecurity.Thisentailsthecreationof“FoodRetail Enterprise Zones” as an expansion of the newlyintroduced Enterprise Zone Tax Incentives, whereby“food retailers that provide nutritious foods in theseneighborhoods are exempt from Oakland businesstaxes”3. Thedevelopmentof“food enterprisezones” in

underservedneighborhoodswouldenablefoodretailers,exempt from Oakland business taxes, to providenutritious foods. This alternative differs fromcontractingprivatecompaniesbecause itallowsexistingestablishments tomaintain their autonomy and remainin West Oakland, facilitating their own “corner storeconversions” and shifting from tobacco and liquor salesto fresh foods.4 Byutilizing thesubstantialpresenceofalready existing food retail stores as well as newlyimplemented policies that support economicdevelopment, local establishments can be transformed,without high start up costs, to address the nutritionalneedsofthehistoricallyunderservedcommunity.5Thesestoresarealreadybeen integrated into thecommunity,are centrally located, and are accessible to residentsbothbywalkingandpublictransportation.Collaboration between large supermarkets and cornerstores is an option to increase political feasibility, inwhicheitheranindependentorchainstoreactsasacoresupporter ofanetworkof small satellite stores carryingthesupermarket’snameorbrandorlogoinareaswhereit would be infeasible to install spacious, full‐servicesites. The larger market would be responsible for thepurchase, storage, delivery, and re‐sell of products tolocalcornerstores.TheCityofOaklandneedstoutilizetheestablishedandreputablecommunitybasedorganizationstoaddresstheissues of malnutrition in its long underserved WestOakland community. Working with these organizationsprovides an attractive and effective way to tackle theissue in light of the city’s current financial situation. Inaddition, “corner store conversions” exemplify a policyalternative that requires little investment of federalfunds yet reaps gains associated with reducing foodinsecurity and nutrition‐related diseases amonginhabitantsofCalifornia.

Sources1Andrews,Margaret."FoodStampProgramAccessStudy."EconomicResearchService.UnitedStatesDepartmentofAgriculture,May2004.Web.April282010.

<http://www.ers.usda.gov/publications/efan03013/>.2White,Dustin."FoodSecurityinOakland,CA:CreatingAccesstoHealthyFood."UniversityofCalifornia,Berkeley,2003.Web.April122010.<http://landscape.ced.berkeley.edu>.3Unger,Serena,andHeatherWooten."AFoodSystemsAssessmentforOakland,CA:TowardaSustainableFoodPlan."OaklandMayor’sOfficeofSustainability.UniversityofCalifornia,Berkeley,DepartmentofCityandRegionalPlanning,May242006.Web.April122010.<http://oaklandfoodsystem.pbworks.com/>.4Farfan‐Rameriz,Lucrecia.1998.“CultivatingHealth:AWestOaklandFoodSecurityPlanningProject:AProfileofWestOaklandNeighborhoods–PartI.”UnpublishedWork.5“NeighborhoodGroceries:NewAccesstoHealthyFoodinLow‐IncomeCommunities.”CaliforniaFoodPolicyAdvocates.January2003.January2006.<http://www.cfpa.net/Grocery.PDF>.

Introducing Competition into California’s Prison Systems

Brent Gaisford, University of California Los Angeles

History

States across the country face rising costs fortheircorrectionsandrehabilitationefforts,mostnotablyin California, where the prisons are currently operatingat190%ofcapacityandtheprisonsystemabsorbsmorethan $8 billion of state money every year. The prisonsystemsbudgethasswollenfrom3%ofthegeneralfund30 years ago to 11% today.2 However, the extremelyhighcostsoftheprisonsystemarenotmakingforbettertreatmentorrehabilitation,asCaliforniafacesoneofthehighest recidivism rates in the country, with 27.4% ofCalifornia's parolees re‐incarcerated, compared to thenationalaverageof15.5%.3California'sprisonhealthcaresystemwasruledunconstitutionallynegligentbyapanelof federal judges in 2006, and the state's prisonhealthcare system has been under federal receivershipsince then.4 The state faces crises of both cost andquality of the prison system, and a solution is neededthatwilladdressbothproblems. Many states have turned to private prisons asthe solution to their cost problems, and California islikelytodothesame.However,thecurrentpaystructurefor companies who operate private prisons encouragesworse conditions for the prisoners. They are paid on afixedyearlycontractregardlessofthecaretheyprovide,and thus these companies are driven to provide thecheapest facilities and care possible for the inmates inorder tomaximize their profits. Additionally, numerousscholarlyarticleshavebeenpublishedon thedifferencebetween public and private prisons, and they almostinvariably conclude that private prisons do notoutperform public prisons on quality of care or cost tothestate.5However,therearesomenotableexceptionswhere private prisons have proven to be both lessexpensiveandofhigherqualitythanpublicprisons.6Thejournal articles which found private prisons to besuperior concluded that theseparticular private prisonswere outperforming their counterparts because theyexisted in a state of competition with other prisons,whether public or private. Additionally, competitionwithintheprisonsystemalsoencourageslessexpensive,bettercareatpublicprisons.7Thusprivateprisonscanbean integral part of a state's prison system when theyexistinastateofcompetition.

The city of Indianapolis is an excellent exampleofthesuccessofcompetitionbetweenpublicandprivateentitiesforpubliccontractsandservices.UnderStephenGoldsmith,MayorofIndianapolisfrom1992‐2000,morethan 75 government services were opened up tocompetitionfromtheprivatesector.8Overthecourseofthis period, "The city’s budget fell by 7 percent and itswork force—not including police officers and firefighters—shrankbymore than 40percent. At the sametime,thecity investedmorethan$750millioninstreetsand parks, slightly reduced taxes, and maintained itsunemploymentratebelow3percent".9Notonlydidthecityseecostsfall,therewerealsoqualityincreaseswhichaccompanied the introduction of competition.Furthermore, Indianapolis created a unique system forrewarding its best performing public services. Thosepublic agencies that were able to complete contractsbelow their bid were rewarded with 25% of thosesavings in the formof employeebonuses,providing yetanother incentive for public sector employees toincrease their productivity. However, not all ofIndianapolis's attempts at introducing competitionworkedwell, suggesting a need for transparency in thebidding process for new contracts and an oversightcommittee independent from both the public biddersand the private sector. Fortunately, the Office of theInspector General in California is already veryindependentfromtheDepartmentofCorrections,andalevel playing field for bidders could be created fromstudyingcaseslikethoseinIndianapolisinordertobringCaliforniasimilarcostsavingsandqualityincreases.

Analysis

There are two ways to introduce competition:rewarding the best prisons or punishing the worst.Rewarding the best prisons does not create any incentivefor theworstperformingprisons to improvebecause theirinitial huge disadvantage makes catching up with bestprisons prohibitively expensive and not worth the risk ofnotwinningtheprize.Alternatively,bypunishingtheworstperforming prisons, you create an incentive for the worstfacilities, and thus those that most need improvement.Usingasystemwhichpunishesapoorlyperformingprisonwith reduced funding is a sure way to make the prisonworse, not better, so a different incentive system isrequired. If instead the worst performing prisons arepunished by turning over operational control to theindpendent

lowest bidder at an open auction for that prisoncontract, whether the winner is the state or a privatecorporation, a system is created with a very strongincentiveforworstperformingprisons togetoutof thebottom of the distribution. For a public prison, thewardenandalltheemployeesarestronglymotivatedtoimprove conditions to keep their jobs and reputationuntarnished, whereas private prison companies wouldbe motivated by the desire to keep that contract, andhence their profits. In order to create competitionamong prisons to decrease costs and simultaneouslyincrease quality, all of the state's prisons would beranked against each other based on cost and quality.Then, those prisons that perform worst in eithercategory will see the right to operate their prisonauctioned off to the lowest bidder. This will keep theminimumqualityofcarewithin theprisonsystemrisingforyearstocomewithoutcostlyadditionalstandardsorinspections,whilesimultaneouslydecreasingcoststothestate.

Next Steps

Creating a comprehensive rating system is the largestobstacle to this programHowever, the CaliforniaOfficeoftheInspectorGeneraliscurrentlyengagedincreatingjust such a rating system. Additional political pressurefromtheGovernor'sofficeorthestatelegislaturewouldlikely speed this process. Any idea which incorporatesany possibility of privatizing prisons will no doubt facestiff opposition from the California Correctional PeaceOfficers Association (CCPOA), which is probably thestrongest union in the state. This proposition doesrequire legislation and hence the cooperation of boththestateassemblyandthesenate.Fortunately,thisisanidea which can exist alongside all of the currentsuggestionsforeasingCalifornia'sprisonwoes,includingearly releases, reductions in parole, reduction ofmandatory sentencing laws, and increased use of lowcostoutofstateprivateprisons.However,regardlessofthe progress or legislation made in any of these areas,introducing competition into the state's prison systemwillstillundoubtedlyresultinsignificantcostsavingsandrisingstandardsofcare.

NextSteps

California legislative should reform the allocation ofdollars used in the prison system to implement morefunds to the expansion of rehabilitation programs.Rehabilitation programs should be put in that fit theneedsof individuals thatwillmost likely reduce the riskof re‐entry due to criminal charges. Reducing re‐entrystatistics of inmates will cause shrinkage in theovercrowdingsoftheprisonsacrossCalifornia.

Sources1Zagger,Zach."Californiafilesnewplantoreduceprisonovercrowding."Jurist.UniversityofPittsburghSchoolofLaw,13Nov.2009.Web.1Feb.2010.<http://jurist.law.pitt.edu/paperchase/2009/11/california‐files‐new‐plan‐to‐reduce.php>.2Goldmacher,Shane,andLarryGordon."Governor'scallforgivingcollegespriorityoverprisonsfaceshardpoliticaltests."LosAngelesTimes,7Jan.2010.Web.1Feb.2010.<http://articles.latimes.com/2010/jan/07/local/la‐me‐education‐prison7‐2010jan07?pg=3>.3UnitedStates.OfficeofJusticePrograms.BureauofJusticeStatistics.ProbationandParoleintheUnitedStates,2007StatisticalTables.ByTomBonczar,MatthewCooper,andLaurenGlaze.2Apr.2009.Web.1Feb.2010.<http://bjs.ojp.usdoj.gov/index.cfm?ty=pbdetail&iid=1650>.4Faryon,Joanne."SoaringCostsForCalifornia’sFailingPrisonSystem."InterviewbyGloriaPenner.KPBS.8Jan.2010.Web.1Feb.2010.<http://www.kpbs.org/news/2010/jan/08/overcrowded‐and‐expensive‐governor‐addresses‐calif/>.5Pratt,TravisC.,andJeffMaahs."Areprivateprisonsmorecost‐effectivethanpublicprisons?Ameta‐analysisofevaluationresearchstudies."CrimeandDelinquency45.3(1999):358‐71.EconomicPolicyInstitute.Web.1Feb.2010.<http://archive.epinet.org/real_media/010111/materials/TravisPratt.pdf>.6UnitedStates.GeneralAccountingOffice.PrivateandPublicPrisons.16Aug.1996.Web.1Feb.2010.<http://www.gao.gov/archive/1996/gg96158.pdf>.7Archambeault,WilliamG.,andDonaldR.Deis."CostEffectivenessComparisonsofPrivateVersusPublicPrisonsinLouisiana:AComprehensiveAnalysisofAllen,Avoyelles,andWinnCorrectionalCenters."JournaloftheOklahomaCriminalJusticeResearchConsortium4(1997).DepartmentofCorrectionsofOklahoma.Web.1Feb.2010.<http://www.doc.state.ok.us/offenders/ocjrc/97_98/cost%20effectiveness%20comparisons.pdf>.8Blumstein,JamesF.,Cohen,MarkA.andSeth,Suman,DoGovernmentAgenciesRespondtoMarketPressures?EvidencefromPrivatePrisons(December2007).VanderbiltLawandEconomicsResearchPaperNo.03‐16;VanderbiltPublicLawResearchPaperNo.03‐05.AvailableatSSRN:http://ssrn.com/abstract=4410079Tabarrok,AlexanderT."PrivatePrisonsHavePublicBenefits."TheIndependentInstitute.2010.Web.1Feb.2010.<http://www.independent.org/newsroom/article.asp?id=1411>.10Leeson,Peter."WhatIndianapolisCanTeachMichigan."Editorial.MackinacCenterforPublicPolicy8Sept.1998.Web.30Apr.2010.<http://www.mackinac.org/article.aspx?ID=653>.11Chang,Hai‐Chiao.MANAGEDCOMPETITIONININDIANAPOLIS:THECASEOFINDIANAPOLISFLEETSERVICES.GovernmentInnovatorsNetwork.AshCenterforDemocraticGovernanceandInnovationatHarvardKennedyhttp://www.innovations.harvard.edu/cache/documents/11043.pdfSchool,6Dec.2005.Web.30Apr.2010.<http://www.innovations.harvard.edu/cache/documents/11043.pdf>.

Combating Student Homelessness: 24-Hour Peer-Run Services

Jenna Edzant, Joelle Gamble and Amreen Rahman, University of California Los Angeles

Universitiesshouldinsurethatthereisatleastonesecure,on‐campusbuildingopen24‐hoursaday,sevendaysaweek,toprovidehomeless/needystudentswithshelter.Duetoa lackofdataonstudenthomelessness,theUCRegentsshouldprioritizetheissuebyinitiatingacross‐systemsurveycollectingdatafromallUCcampuses.

Key Facts

• Many signs can alert universities of homelessstudents,including:alackofcontinuityineducation,poor health and hygiene, or multiple bags/largequantitiesofbelongingstocarryonperson.6

• "Forthe2009‐2010schoolyearandfutureyears.TheCollegeCostReductionandAccessActof2007 (P.L.110‐84) expanded the definition of “independentstudent” to include: (1) unaccompanied homelessyouth; (2) youthwho are in foster care at any timeafter theageof13orolder,and;(3)youthwhoareemancipatedminorsorare in legalguardianshipsasdetermined by an appropriate court in theindividual'sstateofresidence."7

• In a survey study conducted by the CaliforniaResearch Bureau on homeless youth in California,24%ofthoseinterviewedatthetimewereattendingeitherhighschoolorcollege.8

Talking Points

• Due to the lack of statistically based studies onstudent homelessness, universities primarily rely onanecdotal information. In order to quantify theproblem, universities can initiate an identificationprocess of at risk students through psychologicalservices, financial aid, counseling andother studentservices.

• Students may be considered homeless for severaldifferentreasons:unexpectedevictions,familycrisesor a lack of a nighttime residence due to long‐standingfinancialissues.5

• Providing students in need with a dependablenighttimeshelter,viaa24‐houron‐campuslocation,isthefirst‐stepuniversitiescantaketowardscurbingthe spread of homelessness throughout theirstudentbodies.

History

With higher education comes a considerablefinancial burden as the price of attending collegeincreasesannually,andsometimes,bi‐annually.Overthe

pastfewyears,actionshavebeentaken toalleviate thestrainthattuitionplacesonstudents.The2009AmericanOpportunityTaxCreditaddedcoursematerialstothelistof qualifying claims for parents and students. TheStudentAidandFiscalResponsibilityAct(SAFRA),whichwassignedinto lawalongwithhealthcare legislationinearly 2010, significantly increased the amount of PellGrant awards. SAFRA converts student lending fromtaxpayer subsidized lenders to the more cost‐effectiveDirect Loan Program, which lends money directly fromthegovernment.2

Despite efforts to create affordable highereducation,studentsarestillsufferingfromtheeffectsofthefinancialcrisis.In2010,California’sGovernor,ArnoldSchwarzenegger proposed to phase out the Cal Grantsprogram,which many California students had relied onto pay for school. Both the UCs and CSUs have alsoestablished fee increases while drastically cuttingenrollment.3

At UCLA, some students resort to sleeping inlibraries, showering in gym facilities and carrying theirpersonal belongs with them to class. These are notisolated incidents. Fortunately, UCLA has a 24‐hourcampus library. Otherwise, many students would havenoshelteratnight.

Analysis

The majority of college campuses across thecountry feature at least one facility designed as a"studentrecreationalcenter"thatprovidesservicessuchas study rooms and access to computers, lounges,athletic facilities, locker rooms, program offices, andcommonareas. Needystudentsfrequentsuchbuildingsforshelter,hygienicuses,orsimplyacomfortableplaceto rest.4 These buildings become the primary resourceforauniversity’shomelessstudentpopulation.

Next Steps

Schools should guarantee at least one securebuildingopenatalltimestoprovideshelterforhomelessstudents. This may be at a library or a student union.indepent

Thesebuildingsshouldhaveopenandsecurerestrooms,shower facilities and washers and dryers. To minimizecosts, these washers and dryers could be renovated orsecond‐handsetsfromotherresidencehalls. Collecting data on the severity of studenthomelessness is key to implementing this idea. The UCRegents can be the driving force for this policy byinitiating a cross‐system survey to collect data fromvariouscampuses.WorkinginconjunctionwithUCSAwillensurethatthiscanbeaccomplishedasUCSAwill likelyhave thedesire and institutional capacity to collect thedata. Once the data is collected, both the statelegislatureandUCRegentscanworkinconjunctionwithone another to ensure that the UC system has thebudgetcapacityandresourcestoadequatelyaddresstheprevalenceofstudenthomelessness. Universities and colleges should utilize alreadyexistingserviceswhenenactingthisplan,suchasstudentrunsecurityforces.Fundingcancomefromanyexistingfunding for student welfare services. Many schoolsalreadyhavebuildingsopen24‐hoursbutdonotprovideshowers orwashers/dryers or food closets. Centralizingthesefacilitiesiskeytotheproject’ssuccess. If funding allows, universities should institute astudent‐led organization to provide services that could

identify homeless students and provide them withinformation concerning available facilities. They wouldorganize fooddrives tocollectmealplan vouchers fromthe students, as well as, collect donations from theirneighboring community. These groups could also holdfundraiserswithalumnitorequestmonetarydonations.

Audience

Getting students involved and educated aboutstudenthomelessnesswouldbethedrivingforcebehindthe movement. An established and interested group ofstudents would be able to reach out to universityofficialsinrelevantdepartmentssuchasstudentservicesor housing. The next level of stakeholders involves theuniversity board of trustees, or in the case of theUniversity of California system: the UC Regents. Finallyon the national level, involving local representatives ofthe issuewouldbe ideal inorder togain recognitionofthe growing homeless student population. Finally,partneringtheabovestakeholderswith localnon‐profitsinterested in homelessness and social services wouldsubstantiallyhelpfosterasustainablesolution.

Sources1Paik,Neil."Revisedfederalaidapplicationreleased."TheDailyBruin,January27,2010:1,4.2"StudentAidandFiscalResponsibilityAct(updated3.18.10)|EdLaborJournal|CommitteeonEducationandLabor."CommitteeonEducationandLabor.N.p.,n.d.Web.27Jan.2010.3Bader,EleanorJ.2009."HomelessonCampus|TheProgressive."TheProgressive|Peaceandsocialjusticesince1909.N.p.,n.d.Web.30Jan.2010.<http://www.progressive.org/node/718>4Ibid5Bernstein,Nell,andLisaFoster."Voicesfromthestreet:Asurveyofhomelessyouthbytheirpeers."CaliforniaStateResearchLibrary1(2008):1‐133.Web.<http://www.library.ca.gov/crb/6Ibid7“HelptinUnaccompaniedHomelessYouthAccessFinancialAid.”NAEHCY.<http://www.naehcy.org/dl/uy_higher_ed.doc>8Ibid

A Tax Revolution in California

Kunitaka Ueno, University of California San Diego

Implementing a value‐added tax (VAT) and removing the corporate income tax would attract business toCalifornia,solvetheirbudgetcrisis,andgeneratesustainableeconomicgrowth.

High corporate income taxes and heavy regulations are causing amassive business exodus from California. In everymonth of 2009, Nevada – a state with no corporate tax and less red tape – received over a hundred inquiries fromcompaniesinCaliforniaaboutplanstomovetoLasVegas.5TheMilkenInstitute,athink‐tankinSantaMonica,reportedthat California is steadily losing its manufacturing industry to les tax heavy states such as Arizona, North Carolina,Georgia and Texas. The departure of firms and capital has destabilized tax revenues and has undercut California’seconomicperformance.

Moreover, California’s heavy reliance on personal and corporate income taxes is becoming the source of notoriousrevenue volatility. In each recession, Sacramento suffers a sharp decline in its tax revenue – falling more than 24%during the dotcom bust and over 20% in the current recession.6 Collecting taxes from sources that experiencepronouncedfluctuationsleavesthestatepennilessintimesofrecession

Tosolvethecurrentsituation,Californianeedstotwothingsatonce–reducethecorporatetaxandintroducethevalue‐addedtax(VAT).Byreducingthecorporatetax,Californiawillattractbusinessinvestmentandcreatejobopportunities.Byimplementingavalue‐addedtax(VAT),thestatecanensuremorestabletaxbaseandendthefiscalcalamity.

Key Facts

• AnAnti‐BusinessState:ChiefExecutivehasrankedCalifornia theworst state to conduct business forthepastfouryears.1

• Census Bureau indicates that California has beenwitnessing a “tax flight” phenomenon, withconsistent emigration of over 100,000 residentseachyear.2

• Volatile Revenue: California’s income tax revenuefell24%duringthedotcombust, increased20%inthe followingrecovery,andhave fallenmore than20%inthecurrentrecession.3

Talking Points

• Californianeedstoenditsrelianceonincometaxestostopthebusinessexodusandrevenuevolatility.

• A value‐added tax (VAT) would embrace thestability of the existing sales tax while generatingthe additional revenue necessary to offset theeliminationofcorporateincometax.

• Records show that states with strong records ofeconomicfreedom–NorthCarolina,Delaware,andTexas – have attracted business investment andhave maintained a budget surplus in thisrecession.4

History

Texas is a case in point. While California issufferingfromafiscalhole,Texas–astatethatleviesnopersonalincometax–isrunningabudgetsurplus.TexasisbecomingamagnetofAmerica’sbiggestcorporations,hostingmoreFortune500companiesthananyotherUSstate.7 With the steady inflow of investment andemployment,Texas’sjoblessrateof7.1%isthreepointsbelow the national average when California’s is threepointshigher.8Texasillustratesthatlowtaxesandapro‐business climate lure both investment and jobopportunities.

Analysis

WhilebothVATsplayasimilarroleingeneratingrevenue, they differ in their approach. Unlike existingsalestaxesonfinalpurchasedgoods,aVATischargedongoods and services at each stage of production.Consequently, a VAT is embedded in the prices andinconspicuoustotheconsumers.

VATswillmodernize the sales tax byexpandingthe tax base. Unlike income and corporate taxes, thesalestaxhasbeenastablesourceofrevenue.However,the current sales tax system is outdated because it isonly imposed on tangible goods. California is aindependently

predominantly service‐based economy. The TaxFoundationestimatedthatevenwithoutthe8.25%salestax,a2.77%VATcanraiseapproximately$28billionperyear.9 By placing most services under the tax base,Sacramentocouldendtherecurrentfiscalcrises.

Consequently, the VAT would make Californiamore business‐friendly and generate sufficient revenueto remove corporate taxes. Numerous studies illustratethe economic benefits of low taxes and pro‐businessclimate. The Fraser Institute, a Canadian think‐tank,reportedthatstateswithlowtaxesandbusiness‐friendlylegal systems had an annual growth rate that was 20percent higher than the national average from1981 to2005.10 In contrast, states with higher taxes and moreintrusiveregulationsexperiencedanannualgrowththatwas10percentbelowtheUSaverage.11

Next Steps

GovernorArnold Schwarzenegger has organizedabipartisancommissiontoremedyCalifornia’seconomicissues.12 The commission has already proposed somevariants of VAT on the table, but they are likely to bedismissedintheearlyprocess.Togainapopularsupportfor tax reform, it is critical to fix the stagnant economyand employment. The next step is to reduce thecorporate tax. Reducing corporate tax sends a clearmessage to the employers – it shows California’scommitmenttobecomemorebusiness‐friendly.Thiswillattract businesses and create job opportunities forCalifornia. By boosting the economy and employment,thestatewillhaveabetterchanceofgainingthepopularmandatenecessarytoachieveagreatertaxreform.

NextSteps

California legislative should reform the allocation ofdollars used in the prison system to implement morefunds to the expansion of rehabilitation programs.Rehabilitation programs should be put in that fit theneedsof individuals thatwillmost likely reduce the riskof re‐entry due to criminal charges. Reducing re‐entrystatistics of inmates will cause shrinkage in theovercrowdingsoftheprisonsacrossCalifornia.

Sources

1“EmigrationfromCalifornia:Goeastornorth,youngman”August27,2009.Economist:1‐2(accessedJanuary14,2010).2“Californiav.Texas:America’sfuture.”July12,2009.Economist1‐2(accessedJanuary14,2010).3Cohen,MicahandKiranSheffrin.July27,2009.“FindingStableGround:CaliforniaReformCommissionPutsTaxOverhaulonTable”TaxFoundationhttp://www.taxfoundation.org/publications/show/24928.html(accessedJanuary23,2010).4Dowd,AlanW.andAmelaKarabegovic.August7,2008.“ThePathtoProsperity”TheJournaloftheAmericanEnterpriseInstitute.http://www.american.com/archive/2008/july‐07‐08/the‐path‐to‐prosperity(accessedJanuary20,2010).5“EmigrationfromCalifornia:Goeastornorth,youngman”(accessedJanuary14,2010).6Cohen,MicahandKiranSheffrin.7“Californiav.Texas:America’sfuture.”(accessedJanuary14,2010).8“Californiav.Texas:America’sfuture.”(accessedJanuary14,2010).9Cohen,MicahandKiranSheffrin.10Dowd,AlanW.andAmelaKarabegovic.August7,2008.“ThePathtoProsperity”TheJournaloftheAmericanEnterpriseInstitute.http://www.american.com/archive/2008/july‐07‐08/the‐path‐to‐prosperity(accessedJanuary20,2010).11Dowd,AlanW.andAmelaKarabegovic.12“CaliforniaTaxReformProposalWouldPutStateBackonStableGround”TaxFoundation(July28,2009).http://www.taxfoundation.org/news/show/24933.html(accessedJanuary24,2010).

Implement Rehabilitation Programs to Reduce Prison Overcrowding

Shah-Rukh Paracha, University of California Los Angeles

Inordertoreduceovercrowdingintheprisonsystem,Congressshouldimplementmorerehabilitationprogramsthatfitindividualneedsthatwillreducetheamountofre‐entryforformerinmates.

California,alongwithmostother states, is facedwith theproblemofovercrowding jails. At the rootof theproblem,overcrowding is caused by the inefficiency of our current system in rehabilitating individuals to integrate back intosociety. Current debates ask whether jails are in place to rehabilitate an individual or to punish them. The currentsysteminplacehas takenthe ideologyofpunishmentfor imprisonment.AccordingtoFrancesCrooks,DirectoroftheHowardLeagueforPenalReform,“[people]mustrecognizethat[punishment]issimplyrevengeanditisnotgoingtobeeffective;itwillnotstopthepatternofbehaviorwhenpeoplecomeout.”Manyofthepeopleinjailneedtreatmentinordertoeffectivelyintegrateinsociety.Over90%ofinmatescanbediagnosedofsufferingfromamentaldisorder.Over40%ofwomeninjailhaveattemptedsuicidepriortoincarnation.2Designingspecialprogramstofitpeople’sneedsthefirsttheyareincarceratedcandramaticallyreducere‐entryintojails;thus,lightingtheburdenputontothestatepayingforthere‐entryandhousingofthesepeople.

Key Facts

• Over 90% of inmates can be diagnosed ofsufferingfromamentaldisorderandover40%ofwomen in jail have attempted suicide prior toincarnation.

• It isestimatedthatover$40,000ayear isspentperinmate.

Talking Points

• California jails are marked with overcrowdingand federal courts have demanded thatCalifornia state legislature do something aboutit.

• The current system creates inefficiency becauseof itshighre‐entryrates;theburdenofwhich istakenonbyCaliforniataxpayers.

• For society, prison time is most successfullyspent when we attempt to rehabilitate anindividualratherthanpunishanindividual.

History

In order to meet fiscal needs, California hasreduced the funds given to rehabilitationprograms andhavereleased inmatesearly. Inordertomeetpressuresgiven by federal courts, California is releasing inmates.Officials are planning to reduce more than 40% of thebudget given to rehabilitation programs.3 This willinevitably lead to more of the current inmates re‐entering jails upon their release causing theovercrowdingofjailstogetworse.

Analysis

Overcrowding in prisons have becomecommonplace in California. The past forty years havebeen marked with prisoners situated in deterioratingfacilitiesusuallycramped intoa roomwith fiveormoreinmates.Overcrowdingoftheseprisonsleadstofalteredrehabilitation of inmates due to a failure of adequateattention needed for the person to heal.4 A feedbackloop mechanism is driven into this system asinadequately treated inmates are released back intosociety and soon return back to jail which adds to theproblem of overcrowding itself. More than one half ofprisoners released tend to end up back behind barswithinthreeyears.Thestatehasfailedtohelpprisonersinjailturnawayfromalifeofcrime.Thiswilltakeeffortin tracking and reforming the lives of prisoners bothwhen they are in jail and released. The cost of keepingthese people imprisoned is expensive. It is estimatedthatover$40,000ayearisspentperinmate.5Intheendthestateisthebiggestloserduetothereentryofformerinmatesduetotheinefficiencycreated.Theinmatewillonceagaintakeuptime incourttobeprosecuted,mayrequest for thestate toprovidea lawyer,and thestatewill take another shot at rehabilitating the criminal, alladdingtotheburdenputontothestatebudget.Inorderto reduce thesecostsputon to thestate, itwouldonlymake sense to implement a program that wouldcorrectly“heal”theinmatethefirsttimearound.

Rehabilitationprogramsinjailarekeytoguidingan inmate away from a life of crime. In light of thecurrent state budget crisis, California has releasedprisoners theyhavedeemedatbeinga low‐level riskofintepdent

re‐entry.6 Despite this, some people whom have beenreleased have already ended up back in jail. Many ofthesepeople re‐enterbecause theyhavebeenreleasedback into society to early and without any propervocational training or other types of rehabilitationprograms. Being thrown out into the real world, manyex‐consdonotholdanyskillsetsthatwillallowthemtoobtain cash legally. Not being able to pay their bills,many ex‐cons are forced to turn back to a life of crimeand eventually lead them right back into jail.7 Studieshave shown that in order for rehabilitation to besuccessful, programs must be put into place thataddressestheinmate’sneedsandmotivatehimorhertomakeachange.8Afive‐yearHarvardstudyrevealedthatimplementing Transcendental Meditation into a

maximum‐security prison not only reduced violencewithin theprison, but also reduced the rate of re‐entryby 30‐35% for participating individuals compared toothergroupsstudied.9

Next Steps

Californialegislativeshouldreformtheallocationofdollarsused intheprisonsystemto implementmorefunds to the expansion of rehabilitation programs.Rehabilitation programs should be put in that fit theneedsof individuals thatwillmost likely reduce the riskof re‐entry due to criminal charges. Reducing re‐entrystatistics of inmates will cause shrinkage in theovercrowdingoftheprisonsacrossCalifornia.

Sources

1HouseofCommonsHomeAffairsCommittee,RehabilitationofPrisoners:FirstReportofSession2004‐05VolumeII,20052Rothfeld,Michael.“Asrehabprogramsarecut,prisonsdolesstokeepinmatesfromreturning.”http://articles.latimes.com/2009/oct/17/local/me‐rehab17(accessedMarch3,2010).3Singer,Richard.“PrisonConditions:AnUnconstitutionalRoadblocktoRehabilitation.”pg372‐3754Davie,Fred.“TheSecondChanceAct.”http://www.alternet.org/rights/81512/(accessedFebruary15,2010).5Blankstein,Andrew.“Morethan1,500CaliforniaJailInmatesAreReleasedEarly.”http://articles.latimes.com/2010/feb/11/local/la‐me‐early‐release11‐2010feb11/2(accessedMarch23,2010).6Tahmincioglu,Eve.“UnabletoGetJobs,FreedInmatesReturntoJail.”http://www.msnbc.msn.com/id/35263313//(accessedApril10,2010).7Murray,Iain.“MakingRehabilitationWork.”8NaturalLawParty.CrimeandRehabilitation.http://www.natural‐law.org/platform/crime.html#notes16(accessedApril02,2010).

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