TANF Hoarding, Continued

by Tom Yamachika, President, Tax Foundation Hawaii

About a year ago, we tried to shine the spotlight on a federal program for families and children called TANF, Temporary Assistance for Needy Families.  That program provides assistance for struggling families and children – but not directly.  The federal government does not write checks to recipients directly.  Rather, it provides block grants to the states, who then set up their own programs following federal guidelines and tend to their own.

Hawaii, Tennessee, and Maine were called out by the nonprofit newsroom ProPublica in 2022 for letting TANF money gather dust in some dark corner instead of putting it to use helping families and children.  We followed up to see if anything significant has changed since then.

According to 2021 TANF financial data, which wasn’t available at the time of our previous article, not a lot changed.  The amount of “unobligated balance” of the federal block grants for Hawaii, which was $364 million at the end of the fiscal year ending September 30, 2020, crept upward to $378 million at the end of fiscal 2021.  To illustrate, here are the top ten states with the most in unobligated balance in 2021 as a percentage of the grant made available to that state in 2021:

Source:  U.S. Dept. of Health and Human Services, Office of Family Assistance.C

In the table, Tennessee and Hawaii take the two top spots.  Maine appears to have cleaned up its act, falling to 20th in the list.  In theory, the Aloha State should be on its way to improving its ranking, as we enacted a law last session (Act 237, Session Laws of Hawaii 2022) that permitted TANF funds to be used for more things such as providing additional housing assistance subsidies.

We have all of this free money.  Why aren’t we using it to do some good?

And if that isn’t enough of a reason to spend the money the Feds have given us, consider this.  When we were going through the pandemic, our good representatives in Washington allotted close to a billion dollars to the states in the American Rescue Plan Act of 2021.  Hawaii pulled down $4.2 million.  The formula that Congress enacted for distributing the money gave more to states that spent their TANF money on benefits to low-income families with children.  This is just another example of our government saying, “If you don’t spend the money we give you, then don’t expect us to give you more.”

Lawmakers, do you need more money to do what needs to be done?  Of course you do.  Well, here is a way to get some without breaking even more Hawaii taxpayers’ backs.