Support for Low-Income Families Falls Again

Aug 19, 2013

By Elizabeth Lower-Basch

Spending data released by the Administration for Children and Families shows that state spending of Temporary Assistance for Needy Families (TANF) and related state maintenance of effort (MOE) funds declined again in federal fiscal year 2012.  States reported spending or transferring to related programs a total of $31.36 billion, down nearly $2 billion from fiscal year 2011.

As a result, spending declined in nearly every category on which TANF and MOE funds may be used.  The categories with the largest decreases were basic assistance (down $622 million), child care (down $500 million, including both spending within TANF and transfers to the Child Care and Development Block Grant) and work-related activities (down $485 million, driven largely by a $356 million decline in spending on wage subsidies).  The category with the largest increase was “other non-assistance” with a $129 million increase.  Data collected from the states in 2011 showed that this category was used to report spending in a wide range of areas, but that the largest shares were spending on child welfare services and TANF program expenditures such as case management.

Most states had less federal TANF funds available to them in FY 2012 than in FY 2011, as they had less carryover funds from the TANF Emergency Contingency Fund (ECF) remaining.    Three states were required to return a portion of their awarded funds based on reconciliation of their final spending reports.   This process also led to many states retaining the remaining carryover funds as unobligated balances.  In addition, the 17 states that had historically received additional funding from the supplemental grants also experienced the loss of these grants, which were not funded in 2012.  Total state spending climbed while MOE fell by $693 million, with California accounting for $317 million of that decline.

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