TANF Child Care in 2008

Nov 03, 2009

by Hannah MatthewsTANF funds used for child care

Federal Temporary Assistance for Needy Families (TANF) funds used for child care increased slightly in FY 2008. Nationally, states directed approximately $3.3 billion in TANF funds to child care in 2008, approximately $121 million more than in the previous year, or a 4 percent increase, according to FY 2008 TANF Financial Data released by the Administration for Children and Families (ACF). ACF does not report on the number of children receiving TANF-funded child care assistance.

States choose whether to use TANF funds to provide child care assistance to families. States may spend TANF funds directly on child care, usually in the form of vouchers given to parents; they may also choose to transfer up to 30 percent of their annual TANF block grant to the Child Care and Development Block Grant (CCDBG) or to a combination of CCDBG and the Social Services Block Grant (SSBG).

According to the new data, TANF funds spent directly on child care increased from $1.2 billion in 2007 to $1.6 billion in 2008. TANF transfers to CCDBG decreased from $2 billion in 2007 to $1.7 billion in 2008. Only Massachusetts transferred the maximum amount of 30 percent of TANF funds. An additional eight states transferred between 25 to 29 percent of their TANF funds to a combination of CCDBG and SSBG: Delaware, Florida, Idaho, Iowa, Kansas, Louisiana, Vermont, and Washington.

States are required to meet a maintenance-of-effort (MOE) requirement in the TANF program. States spent $2.6 billion in state MOE funds on child care in 2008. This was an increase of $65 million compared to 2007. A portion of TANF MOE funds spent on child care may also be directed toward states' CCDBG MOE requirement.

The Administration for Children and Families has not yet released FY 2008 expenditure data for CCDBG, so it is not possible to determine total child care spending (CCDBG and TANF combined) for 2008. When that data is available, CLASP will produce additional analysis on national child care spending trends as in prior years, as well as updated state-by-state child care spending pages. State-by-state tables analyzing TANF and MOE spending are currently available on CLASP's website.

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