Alabama is one of 21 states that spends less than half (38 percent) of its welfare reform Temporary Assistance for Needy Families (TANF) and maintenance of effort (MOE) dollars on the core welfare reform areas according to public radio business news program Marketplace’s web page “Your State on Welfare.”
A report from the Center on Budget and Policy Priorities (CBPP) shows the number of Alabama families in poverty receiving cash assistance–one of the core areas of TANF along with child care and work support–has been steadily decreasing since the implementation of TANF in 1996. Only 12 out of every 100 families in poverty received TANF cash assistance in 2014. The Alabama TANF benefit level for a family of three is $215 a month.
Alabama’s strict eligibility requirements are one reason for the low number of families on welfare. According to an eligibility pamphlet from the Alabama Department of Human Resources (ADHR), to qualify for cash assistance, a family must have an income lower than the TANF monthly benefit set for that family size. For example, a family of three would have to make less than $215 a month to be eligible.
The remaining 62 percent of TANF spending went to administration and “other services,” as shown on the CBPP 2014 Alabama TANF spending fact sheet. The other services, which include programs such as pregnancy prevention and fatherhood initiatives, are non-core areas that are permissible under law but not part of the core goals of welfare reform according to the Marketplace web page.
In recent weeks, “The Uncertain Hour,” a podcast on Marketplace, has been looking at how states are using their TANF funds — welfare block grants from the federal government.
The state of TANF has also hit closer to home; during his trial, former Speaker of the House Mike Hubbard was accused of setting aside TANF dollars in the state budget for the Alabama Boys and Girls Clubs because of a personal connection to Maggie Brooke, the wife of Will Brooke, a board member of the Business Council of Alabama. Maggie Brooke is on the board of an Alabama Boys and Girls Club, and news reports said Hubbard emailed Will Brooke that he would make sure the Boys and Girls Club received TANF funding because he did not want Maggie Brooke on his “bad side.”
Kathee McGuire, the statewide coordinator for the Alabama Alliance of Boys and Girls Clubs, said that her organization received $900,000 in TANF funding for the fiscal period of October 2015 to September 2016. Barry Spear, a spokesperson for the ADHR, the agency responsible for disbursing the funds, said the Boys and Girls Clubs received $900,000 in 2014 as well.
McGuire said she was shocked when she heard about the allegations against Hubbard. “We’ve been getting these funds for about 10 years now, and Mike Hubbard is one of numerous legislators that support the Boys and Girls Clubs. He doesn’t have the power to give us this $900,000,” she said. McGuire said the funding is a result of the Boys and Girls Clubs’ continuous efforts to talk to legislators, show them what services they provide and garner their support.
According to a CBPP fact sheet, Alabama reported a total of $189 million in TANF spending in 2014. This included federal TANF funds as well as the state’s MOE spending.
In order to receive their TANF funds from the federal government, states must spend a certain amount of money (MOE spending) on TANF-related programs. According to a report from the U.S. Government Accountability Office, in fiscal year 2015, Alabama was one of 16 states that also counted nongovernmental third-party expenditures toward their required MOE spending.
The Alabama Alliance of Boys and Girls Clubs was one of these third-parties that offered up MOE spending to ADHR to help Alabama meet its MOE spending requirement in order to receive the federal TANF grant. “Last year we offered up $7 million in maintenance of efforts directly to DHR that they were able to use to help draw down their funds,” McGuire said. “Obviously when they pull down, it doesn’t all just benefit us because they don’t need nearly $7 million to pull down $900,000, so it’s helping the state in general.”
The TANF block grant, which replaced Aid to Families with Dependent Children (AFDC) in 1996, has four purposes listed in a 2015 CBPP report: “(1) provide assistance to needy families so that children may be cared for in their own homes or in the homes of relatives; (2) end the dependence of needy parents on government benefits by promoting job preparation, work, and marriage; (3) prevent and reduce the incidence of out of wedlock pregnancies and establish annual numerical goals for preventing and reducing the incidence of these pregnancies; and (4) encourage the formation and maintenance of two parent families.”
TANF allows states the flexibility to spend the money on state-based programs as long as they relate to the four purposes. Within these four purposes, there are three core areas of welfare reform according to Marketplace’s web page: cash assistance, child care and work support.
The Marketplace web page shows that in 2014, Alabama spent 38 percent of its total TANF dollars, including MOE spending, on the three core areas of welfare, making it one of 21 states that spend less than half of its TANF dollars on core areas. Twenty-one percent went to cash assistance, 14 percent to work support and 3 percent to child care.
“So the thing that jumps out to me when I look at Alabama’s spending, in terms of the core areas, is how little the state spends on child care,” said Liz Schott, a senior fellow at CBPP. “If you look back at Alabama’s historic spending, they did spend more money on childcare in some of the earlier years under TANF, and they have pulled that back considerably and have instead diverted it to other areas of the state budget.”
Alabama also used very little of its TANF dollars to provide cash assistance. A family of three on TANF receives $215 a month. Alabama’s cash benefits are half the amount of the median state’s benefits. “So it’s very low. It’s among the lowest benefits in the country, and it has declined in value,” Schott said.
Carol Gundlach, a policy analyst for Arise Citizens’ Policy Project, said that the eligibility requirements for TANF cash assistance in Alabama are so restrictive that “you have to not just be poor, you have to be destitute. Basically, you have to have no income to be on TANF. And so almost nobody’s eligible for the program anymore.”
Families that are financially eligible for TANF cash assistance must cooperate with “child support, JOBS [ADHR’s welfare-to-work program] and drug screening” in order to keep their benefits, according to an eligibility pamphlet from the ADHR.
The CBPP fact sheet shows that for every 100 families living in poverty, only 12 received TANF cash assistance in 2014. This number has been decreasing since 1979 when 49 out of 100 poor families received cash assistance through AFDC, and since 1996 when 32 out of 100 poor families received TANF benefits.
“The decision to block grant TANF in 1996 was just an unmitigated disaster,” Gundlach said. “We’re — and this is true in Alabama and in the nation — we’re serving many, many, many fewer people on TANF than we did before.”
The CBPP fact sheet shows that the remaining amount of Alabama’s total TANF spending in 2014 went to administration and systems (4 percent) and “other services” (58 percent).
Within those other services are non-recurrent short term benefits, money transferred to Social Services Block Grant (SSBG), pregnancy prevention, two-parent family formation and maintenance, programs authorized under a prior law and other non-cash assistance, according to CBPP fact sheet.
Gundlach sees non-recurrent short term benefits as one of the more effective programs funded by TANF spending. “We spend a fair amount of our TANF dollars, a little more than probably other states,on what’s called non-recurrent short term benefits,” she said.
“For example if their car needs repairs so that they can go to work, they can get their car repaired. If they need to buy uniforms so they can go to work, they can do that. If they are close to being homeless and need some help with emergency rent, they can do that. So instead of getting $200 a month in TANF benefits, they might be able to get $600 all at once to buy tires for their car,” Gundlach said.
According to a financial report from ADHR, Alabama’s 2014 federal TANF dollars (not including MOE spending) more specifically went to child welfare programs ($16,627,105), cash and other assistance ($44,723,048), the SSBG ($9,331,520), work support ($13,506,137), administration and systems costs ($5,679,508), the Alabama Coalition Against Domestic Violence ($737,864), fatherhood initiatives through the Children’s Trust Fund ($289,165), pregnancy prevention through the Alabama Department of Public Health and Alabama Campaign to Prevent Teen Pregnancy ($983,137) and family welfare programs ($1,698,086), including the Boys and Girls Clubs.
McGuire said that all youth who receive services through the TANF grant at the 80 Alabama Boys and Girls Clubs service sites meet the TANF eligibility requirements set by ADHR.
At the Boys and Girls Clubs, the TANF dollars fund a number of programs that promote pregnancy prevention, leadership skills, healthy dating and good nutrition. “We have a menu of programs that are all built around life skills and character development, and some of them are kind of specific to, like, not doing drugs. Some of them are specific to just girls, of just trying to have self-esteem in who they are and not doing things that they’re not comfortable with,” McGuire said.
TANF dollars also help fund “Passport to Manhood,” a program that educates boys on healthy decision-making and guides them through rites of passage they may not get at home, McGuire said.
While the programs and initiatives funded by TANF dollars, including those through the Boys and Girls Clubs, are certainly not detrimental, “the basic purposes of welfare reform should come first,” Schott said.
However, Gundlach points out that because of the low benefit rates in Alabama, it is probably better for a family to receive a non-recurrent short term benefit or job training than to receive a couple of hundred dollars in cash assistance each month.
“For the most part Alabama is spending dollars on things that have some relationship to people who are in poverty, or low-income families who are in poverty,” Gundlach said. “If we’re going to use TANF for services, use them for the services that we are going to get the biggest bang for our buck.”
Gundlach said that the TANF funding going to the Boys and Girls Clubs is for a good purpose. But she also said that the connection between addressing family poverty and the Boys and Girls Clubs is “not as clear” as the connection with other TANF-funded programs.
Schott would rather see Alabama invest and increase their benefits. “Alabama does very little in what welfare reform was supposed to be about,” she said.
In addition to Alabama’s strict eligibility requirements for TANF cash assistance as well as its low benefit levels, it also receives fewer federal TANF dollars than other states of similar size. This is because the amount of federal TANF dollars given to each state depends on that state’s welfare spending in the mid-90s when TANF became a block grant.
“If you already had a bare-bones TANF program in that year , and Alabama did, then you’re stuck with the bare bones program forever because the amount of money you get from the feds, it stays the same as what they spent,” Gundlach said. “So even if Alabama says, ‘We want to really ramp up our TANF program,’ there wouldn’t be any money to do it because the federal funding formula penalizes states that had bad programs in the mid-90s.”
Gundlach and Schott agree that something needs to be done to counter the fact that the amount of money in the block grant has not been adjusted for inflation since its creation in 1996.
A CBPP report states that the $16.5 billion federal grant is worth two-thirds of what it was in 1996, yet no adjustments have been made. Gundlach fears that politicians who advocate to turn other welfare programs such as food stamps and Medicaid into block grants will send these programs to the same grave as TANF, which she calls a “dying program.”
“The value of the dollars would decline, states would be increasingly encouraged to divert that money to other unintended uses, and the ability of those programs to really fight poverty would be destroyed. So rather than trying to do much to fix TANF, truth be told, we’re trying to keep what happened to TANF from happening to other programs,” Gundlach said.