OKPOLICY.ORG
Following May’s devastating tornadoes in Moore, the new Director of the Oklahoma Department of Human Services, Ed Lake, suggested the state use $10 million in unspent Temporary Assistance for Needy Families (TANF) funds as emergency relief to tornado victims, as was done in Tennessee following natural disasters when he led that state’s human services agency. Governor Fallin rejected the idea, stating that traditional relief organizations were meeting the needs of tornado victims.
Director Lake’s well-intentioned suggestion did raise an important question: How is it that $10 million in unspent TANF dollars could be available for allocation, particularly given the continuing impacts of the economic downturn on the very low income families that TANF is designed to help? In this post, we look at Oklahoma’s TANF program, who it serves and how TANF dollars are currently being spent. We conclude with some recommendations for how available TANF funds might be allocated.
Temporary Assistance for Needy Families, or TANF, is the federal program created by Congress in 1996 as the cornerstone of welfare reform. TANF limited cash assistance payments to a lifetime maximum of 60 months and imposed sanctions, including the loss of assistance, on individuals who failed to meet work requirements.
Whereas the traditional welfare program, AFDC (Aid to Families with Dependent Children), primarily took the form of monthly cash assistance payments to single parents and their children, under TANF, states now have much greater flexibility in how to spend federal block grant dollars. Federal TANF funding levels stayed consistent even as states reduced cash assistance levels throughout the late 1990s and 2000s, which freed up money for other allowable purposes related to strengthening families and reducing poverty.
Oklahoma has seen an especially steep decline in families receiving cash assistance payments under TANF. In 1994, the state had a monthly average of nearly 50,000 cash assistance families; by 2004, there were just 10,000 TANF cash assistance cases. Even during the worst of the Great Recession, TANF caseloads barely increased. As of March 2013, the program serves 7,782 families. Payments go to working-age parents in barely one-third of these cases (2,743); the rest are child-only cases.
As TANF caseloads have plummeted – a result of strict work requirements and sanctions, time limits, and other policies that discourage individuals from cash assistance – the program serves a dwindling share of families in poverty. Oklahoma has gone from providing cash assistance to half of all families in poverty in 1996 to just one in ten today. By comparison, about 25 percent of families in poverty nationally receive cash assistance.
The combination of declining caseloads and frozen benefit levels – the maximum payment a family of three can receive is $292 per month, the same as in 1986 – has meant that cash assistance now makes up a tiny share of total TANF spending in Oklahoma. In FY 2012, OKDHS spent $177.1 million in TANF funds, of which $22.3 million was for cash assistance. The largest share of TANF dollars ($55.6 million) was allocated for child care services. Of the remaining amount, major expenditures included:
- $14.5 million transferred to the Social Services Block Grant;
- $21.6 million for work support activities, including transportation, client assessments, mental health and substance abuse screenings, literacy classes, post-secondary education, and client reimbursement for training;
- $9.4 million for family formation and stabilization services, including $7.6 million for programs associated with the Oklahoma Marriage Initiative;
- $5.7 million for family support payments to the developmental disabilities services division;
- $47.9 million allocated to agency support services and administrative costs.
In the years following welfare reform, the TANF fund accrued a large unspent balance that at one point exceeded $100 million, but in recent years, the balance has remained between $18 million and $25 million. This creates some opportunity for modest increases in TANF support for families. In a comprehensive review of Oklahoma’s TANF program last year, CAP Tulsa made a number of recommendations for meeting the goals of supporting work, protecting children, and promoting self-sufficiency. They recommend increasing the program’s cash benefit, allowing TANF recipients to earn more and to keep child support payments without losing benefits, and increasing the benefit in child-only cases. In the area of work support, the state could promote financial stability by creating a matched savings Individual Development Account program and help recipients become more employable by increasing funding for substance abuse treatment.
Perhaps the most productive use of TANF funds might be for research to evaluate the effectiveness of the money we are currently spending. The state spends substantial amounts each year trying to help TANF recipients transition into secure jobs and self-sufficiency. However, OKDHS has not conducted a study of welfare leavers since the 1990s. Such a study could provide valuable data on how well the program is meeting its goals and how TANF can be better used to promote stronger, financially secure families.
