In Focus: State TANF Policies and Data

Aug 17, 2016  |  PERMALINK »

New TANF Spending Categories Shine Light On State Spending

By Jessica Gehr

As we approach the 20th anniversary of the creation of the Temporary Assistance for Needy Families (TANF) block grant, new spending data for fiscal year (FY) 2015 shows that states continued to spend less than half of their block grants and related state funds on core activities, including cash assistance, work and training activities, and child care.

Under the TANF block grant, states have great flexibility to use funds to support a broad range of activities that benefit low-income families with children. Many states have used that flexibility to support services such as child welfare, pre-kindergarten programs, and after-school care. New reporting requirements for FY 2015 broke down expenditures into more specific categories, providing a clearer path to understanding the ways in which TANF supports such activities.

In FY 2015, 25 states spent less than half of their TANF and state maintenance of effort (MOE) funds on core activities. Additionally, basic assistance, as a share of federal and state TANF funds, decreased by nearly two percent. Seven states spent less than 10 percent of their TANF and MOE funds on basic assistance, and only three states spent more than 75 percent of TANF and MOE funds on core activities. TANF is intended to promote job preparation and work, yet less than 7 percent of all funds were spent on work, education, and training activities. Moreover, that modest expenditure may not have been used for families receiving assistance. States should focus their spending on core activities that help the families who are struggling most to make ends meet and progress toward long-term economic stability.

The new, more detailed reporting for expenditures shows that states spent 8 percent of TANF and related funds on child welfare services (including foster care) and 6 percent on Pre-Kindergarten/Head Start programs. However, spending varied significantly by state. For example, Georgia and Texas spent roughly 50 percent and 36 percent, respectively, of TANF and MOE funds on child welfare services. Louisiana and Texas spent roughly 30 percent and 38 percent, respectively, on pre-k and Head Start programs. While these are important services, this is not what TANF was originally intended to do. States are leveraging TANF flexibility to fund other services, rather than spending on TANF’s core purposes. 

The real value of the TANF block grant has declined by 33 percent due to inflation since TANF was created, and the use of TANF funds to support a wide range of services has further reduced the funding that is available for core activities. The result is a weak, and deeply uneven, safety net for the poorest families with children. Congress should set standards and hold states accountable for using TANF funds to serve these families.

Jul 28, 2016  |  PERMALINK »

In TANF’s Twentieth Year, Prioritizing Education and Training is Needed

By Randi Hall

New work participation data released this week from the Office of Family Assistance shows that recipients of cash assistance under the Temporary Assistance for Needy Families (TANF) block grant have little access to education and training activities, even though today’s labor market increasingly requires workers to have postsecondary credentials in order to access steady well-paying jobs.  Specifically, the recent share of work-eligible TANF recipients who participated in relevant activities—including education related to employment, vocational education, job skills training and satisfactory school attendance—was only 15 percent, down from 18.3 percent in 2013.

In a new policy brief, CLASP reviews the evidence for the need for postsecondary credentials for labor market success and the effects of obtaining such credentials for TANF recipients.   The brief reiterates the importance of emphasizing educational and job training pathways for TANF recipients, and highlights recent state policy changes that reflect the realities of today’s economy and the opportunity to make further changes by aligning employment programs for TANF recipients with the new Workforce Innovation and Opportunity Act (WIOA).

The brief also identifies federal policy changes that would support states by giving them credit toward the federal work participation rate for engaging TANF recipients in education and training, such as those included in last year’s discussion draft bill for TANF reauthorization put forth by the U.S. House Ways and Means Subcommittee on Human Resources. While we largely supported the initiatives outlined in the draft bill to strengthen TANF’s core purposes and improve the measure of its work participation rate, we raised concerns over the lack of additional flexibility and funding to address and support recipient families' needs and barriers to employment.  Senator Angus King’s (I-ME) recently introduced Enhancing and Modernizing Pathways to Opportunity through Work, Education, and Responsibility (EMPOWER) Act,  would go further toward support education and training for TANF recipients.  The summary of the bill highlights how the EMPOWER Act would  allow states to incorporate education and training opportunities as a pathway to move TANF recipients into stable jobs that pay adequate wages.

While the EMPOWER Act received bi-partisan co-sponsorship from Sens. Kelly Ayotte (R-NH), Sherrod Brown (D-OH) and Shelly Moore Capito (R-WV),  Congress has now adjourned for the Presidential conventions and the August recess.  Given the limited time in which Congress will be in session during this election year, it is unlikely that either the House or the Senate will take up TANF reauthorization this year.  However, these bills provide good starting points for a discussion next year.

The U.S. economy has vastly transformed since TANF was created, but TANF has not.  TANF should be redesigned to improve its effectiveness as both a safety net and an employment program, so that it can truly reduce poverty.

Jun 30, 2016  |  PERMALINK »

Arizona Cuts TANF Lifetime Limit to 12 Months—Harshest in the Country

By Jessica Gehr

Effective July 1, Arizona will lower its lifetime limit on receipt of cash assistance under the Temporary Assistance for Needy Families (TANF) block grant to just 12 months, the shortest in the nation. When this limit takes effect tomorrow, 938 families including 1,500 children will immediately lose benefits that allow them to meet basic needs, as well as the connection to services that help parents obtain skills, education, or employment. Moreover, families who have previously received TANF assistance for at least 12 months will no longer be able to receive help if they lose their job or have a new baby.

This move by Arizona is the latest in a series of draconian reductions in the lifetime limit, beginning in 2010 when the limit was lowered from 60 months to 36 months and continuing in 2011 when the state further reduced TANF’s lifetime limit to 24 months. In addition to lowering the number of months that families can receive assistance, in 2009, Arizona reduced the amount of cash assistance provided to families through TANF by 20 percent. As a result of all these cuts, for every 100 Arizona families in poverty, just nine receive cash benefits from TANF — down from 55 families before welfare reform in 1996, according to the Center on Budget and Policy Priorities.

Federal TANF law requires states to provide families with an adult receiving benefits no more than 60 months of federally funded TANF assistance. However, TANF does not establish minimum benefits, and many states have established shorter limits. The Arizona time limit even applies to families where a relative is not personally receiving benefits but is caring for a child who is eligible for assistance. The state will save less than one percent of its annual budget by limiting TANF eligibility.

TANF block grant funds can be used for a broad range of services that benefit low-income families. At the same time that Arizona has cut TANF benefits, it has increasingly used TANF funds to support child welfare activities. In FY 2014, Arizona reported three-quarters of combined TANF and state maintenance of effort (MOE) spending as “other,” which is possible because the structure of the block grant allows states to divert funds from TANF to plug budget holes in other areas. While child welfare is an important service, states should not divert TANF funds away from families in need to finance other shortfalls. Instead, states should spend general-fund dollars to address the increasing demands in other areas of the state budget. 

 

Limiting a critical work support such as TANF exacerbates the struggles families are experiencing and can make it harder for parents to get back in the workforce. According to Arizona’s TANF agency data, more than a quarter of the parents who will be cut off tomorrow are currently in education and training activities; losing benefits will make it harder for them to complete this training and find lasting work. These cuts will force more children into deep poverty and hardship, putting them at risk of lasting negative effects on their mental and physical health, as well as educational and economic outcomes. Arizona should reverse this ill-advised and short-sighted policy choice. And as part of TANF reauthorization, Congress should establish minimum standards for TANF benefits and require states to spend a minimum portion of their TANF funds on cash assistance, child care, and work activities.

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