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Gov. Jerry Brown and legislative Democrats are nearing a deal on welfare-to-work cuts that would reduce the amount of time families could receive full aid and child care, but with exemptions such as one for people in areas with high unemployment.

The Democratic governor and lawmakers are still working out how broadly the exemptions would apply, said sources close to the negotiations who did not want to be named because the deal remains incomplete. That criteria would determine how much the state could save and the extent to which Brown can declare a shift in the welfare model as he asks voters to raise taxes in November.

Brown wants lawmakers to remake the state's welfare-to-work program, known as CalWORKs, by imposing more severe consequences for not finding work. Democrats are willing to accept some changes, but they say the governor's plan is too severe when work is scarce even for more qualified job applicants in California.

"The typical CalWORKs recipient doesn't have a high school diploma," said Mike Herald, a lobbyist for the Western Center on Law and Poverty. "They're having to compete right now in a job market where even people with high school diplomas can't get hired."

Democratic lawmakers passed a budget bill last week that assumed the state would not reduce its four-year time limit. Instead, they wanted to save less than half the $880 million Brown wanted by allowing parents of young children to receive cash grants without trying to find work, a move that cuts state costs for child care, training and transportation.

Under the deal being crafted by Brown and Democratic lawmakers, the state would generally cut off welfare-to-work recipients after two years if they do not meet federal work requirements, the sources said. However, the plan would exempt from the stricter time limit parents with young children or those living in counties facing high unemployment, among other criteria.

It was not immediately clear how lawmakers would define high unemployment.

The federal government already allows states to ignore time limits for food stamps in areas with unemployment rates above 10 percent. California's statewide unemployment rate was 10.8 percent in May. The most populous county, Los Angeles, had an 11.1 percent rate before adjusting for seasonal factors.

Current state law allows welfare-to-work recipients to receive four years of aid without meeting federal requirements that include finding employment for at least 20 hours a week. California allows families to qualify by pursuing drug treatment, mental health care or domestic violence recovery, activities that don't meet federal criteria and which would not qualify after two years under the deal being negotiated.

CalWORKs aid in recent years has cost the state about $2 billion in a general fund budget hovering around $90 billion. Brown has said the state must refocus the program because California has lagged federal work standards for years. CalWORKs is also easier to cut because it lacks the strong state or federal protections that other spending areas have. Some Democratic lawmakers and political experts think the governor wants to use welfare cuts to help make his case to voters for a tax hike this fall.

Elsewhere in the budget, Democratic lawmakers are seeking to use an additional $50 million from a multi-state mortgage settlement with banks to help plug California's $15.7 billion gap, according to Department of Finance spokesman H.D. Palmer. That brings the total to $392 million out of $410 million available. Democrats' initial budget last week relied on $342 million.

That helps replace part of the $250 million in property taxes that Democrats wanted to shift away from counties. Brown so far has rejected that idea.



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