States Hold On to Federal Dollars Meant for Families in Need

From Stateline, November 12, 2019 (excerpt)

…Between 2015 and 2018, the 38 states holding back welfare money boosted their TANF reserves by 41%, according to the Congressional Research Service. (This data as well as frequently asked questions about the TANF program can be reviewed below in a recently updated CRS report.)

One reason is the historically low unemployment rate. But tighter state requirements also have reduced caseloads.

Tennessee’s 2019 welfare surplus ($732M) is the largest in the country, according to a recent report by the Beacon Center of Tennessee, a fiscally conservative think tank. Last year, Tennessee spent only $71 million of the $191 million it got from the federal government.

Though Tennessee has the largest surplus, other states also are holding back significant amounts of TANF money, according to the Congressional Research Service.

…

Under the 1996 welfare law that created TANF, the federal government provides $16.5 billion a year to the states, and states are required to contribute another $10.3 billion. States can use the money to make direct cash payments to welfare recipients, but they can also spend it on child care, education and job training, transportation, services for children who are at risk of being neglected and abused, and other services to help low-income families. In 2018, 1.2 million families, comprising 3.1 million people, received help.

TANF caseloads typically drop when the economy is strong. Between 2015 and 2018, the number of cases declined by a quarter, from roughly 3.2 million to 2.4 million, according to the U.S. Department of Health and Human Services. But analysts across the political spectrum say state policy changes have helped fuel the decrease.

Arizona, for example, in recent years has cut benefits, shortened time limits to 12 months (the shortest in the country), and imposed other eligibility restrictions. It had nearly $50 million in surplus TANF money in 2018, according to the Congressional Research Service.

LaDonna Pavetti, a vice president at the Center on Budget and Policy Priorities, a liberal-leaning Washington think tank, attributed Tennessee’s caseload reduction and TANF surplus to changes the state has made in recent years, such as tougher sanctions for families who don’t adhere to work requirements.

….

Analysts also note that states are spending less on cash assistance and diverting the money for other purposes, such as pre-kindergarten programs. Tennessee, for example, spends only 13% of its TANF money on basic assistance.

“States do not spend money on the purposes of welfare reform,” said Robert Rector, a senior research fellow at the Heritage Foundation, a conservative Washington think tank. He’d like to see states spend more on promoting marriage stability, a tenet of the 1996 welfare law.

Most states spend a little more than half of their combined federal and state TANF dollars on basic assistance for families with children, child care for low-income families and work-related activities, according to a February report by the Center on Budget and Policy Priorities.

A handful of states spend less than a quarter on those areas, the report found.

Though Tennessee has the largest surplus, other states also are holding back significant amounts of TANF money, according to the Congressional Research Service.

In 2018, Hawaii had $281 million in unspent TANF money and Pennsylvania was sitting on more than $431 million. In contrast, California, Illinois and Massachusetts were among the states with a zero balance.

I’m concerned the reserve is larger than it needs to be,” said Scott Nakasone, assistant division administrator for the Hawaii Department of Human Services. “I do worry that if we don’t spend it, then our clients aren’t benefiting from it. We definitely need to make changes to get that money out the door.”

Hawaii is looking for ways to spend down its reserve, including increasing the amount of cash assistance that low-income families receive, Nakasone said….

(Idea: Use the money to FORCE the homeless into shelter with drug treatment and mental health care.)

read … Efficient Gov

Sept, 2019: Welfare Fraud: 23,000 Dropped From Hawaii’s Medicaid Coverage After Data Review

PDF: The Temporary Assistance for Needy Families (TANF) Block Grant:Responses to Frequently Asked Questions