States With Highest Poverty Levels Don't Always Have the Most On Welfare

October 27, 2011 | Stateline |  Link to article

States that have the highest poverty rates don't always have high rates of households collecting cash welfare, according to new data from the U.S. Census Bureau. 

Separate reports issued this month by the bureau's American Community Survey illustrate the paradox. Alabama and Arkansas, both among the five states with the highest poverty rates, also fall among the five states with the lowest rates of public assistance usage. Census defines "public assistance" to include welfare but not food stamps, Medicaid or disability payments through the federal Supplemental Security Income program.

Elizabeth Lower-Basch with the Center for Law and Social Policy, an advocacy group, says a state can have lower-than-average rates of use of public assistance either because they have less need, or because they do a poor job of reaching those in need - or some combination of the two.

Many of the states with low public assistance participation are Southern states that have low benefit levels and tough eligibility standards. Advocates for the poor say that working even part-time at the minimum wage in these states can result in a loss of benefits.

Others contend the numbers may be misleading. Ana Hicks, a senior policy analyst with Maine Equal Justice Partners, told the Bangor Daily News that she takes issue with public assistance figures that put Maine second in terms of usage. "With general assistance, there are discrepancies and different definitions from state to state, so I'm not sure it's a one-to-one comparison," she said. Maine fell in the middle of the pack on poverty. 

Utah was one of 11 states that saw public assistance participation rates stay flat in 2010. One reason for that could be because of Utah's relatively short lifetime limit on welfare, Terry Haven, Kids Count director at Voices for Utah Children, told The Salt Lake Tribune. While federal law sets a 60-month, lifetime limit on cash assistance, states can set shorter limits or no time frame. In Utah, the limit is 36 months, he explained. 

States have wide latitude in setting their own welfare benefit levels and time-limit policies. Under the terms of the federal welfare law enacted in 1996, commonly known as TANF (Temporary Assistance for Needy Families), basic federal grants to the states also remain level from year to year.

A recent report from the Center on Budget and Policy Priorities found that welfare caseloads jumped more than 30 percent in New Mexico, South Carolina and Washington State during the 2007-09 recession and all three states cut monthly welfare cash assistance by 15 to 20 percent.

According to the Census data, Alaska had the highest percentage of households collecting public assistance in 2010 at 6.7 percent. But most of the states with above average public assistance participation rates were concentrated in the Northeast, led by Maine and Vermont. These two states also posted poverty rates lower than the national average.

Nationwide, more than 46 million Americans, or 15.3 percent of the population, had income below the poverty level in 2010. By contrast, in 2005 - two years before the recession began - 38 million Americans, or 13.3 percent of the population, were below the poverty threshold. 

Mississippi had the highest poverty rate in 2010 at 22.4 percent. New Hampshire had the lowest poverty rate, 8.3 percent, making it the only state with a poverty rate below 10 percent.

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