July 19, 1999

Welfare Balances In The States:
Unspent TANF Funds in the Middle of Federal Fiscal Year 1999
by
Ed Lazere and Lana Kim

Introduction

Under the federal welfare law enacted in 1996, the size of each state's annual TANF block grant is

Table of Contents

I.    Data Source

II.   Background

III.  Final TANF Regulations Restrict Use of Unspend TANF Funds

IV.  Table I

V.   Table II

VI. 
Table III

VII. Table IV

based on the amount of federal welfare funds it received during the early 1990's.(1) Because welfare caseloads have declined dramatically in recent years — as the economy has grown and as states have implemented welfare reform policies — TANF funding in many states exceeds the amounts needed to maintain traditional welfare programs at their former levels. Most states have responded to the available funds by making new investments in programs that help parents find and keep jobs, such as child care or transportation assistance. Some states also have taken advantage of the provision in the federal law allowing them to transfer a portion of their TANF funds to the child care block grant and to the social services block grant.

At the same time, many states also have left significant amounts of the available TANF funds unspent. The welfare law gives states access to each annual TANF block grant allocation until it is fully expended, which means that TANF funds a state does not spend in a given year can be accessed by the state in future years. (As discussed below, the final TANF regulations include provisions that limit to some extent the uses of such funds.)

Understanding the amount of unspent TANF funds that have accumulated in each state is important for several reasons.

This paper analyzes unspent TANF funds through the middle of federal fiscal year 1999 — March 31, 1999 — based on expenditure data states have prepared for federal reporting purposes. These are the most recent TANF financial data available. At the same time, they reflect a period prior to the issuance of the new federal regulations, and prior to the end of most state fiscal years, which typically end on June 30. Thus, these figures do not reflect any increases in TANF expenditures that may result from the new federal regulations or from much of the state legislation enacted this year.

These data thus suggest that many states can afford to invest more in supports and services that help parents move into the workforce or that enable working parents to remain employed and support their families adequately. On the other hand, many states with unspent TANF funds have expressed an interest in reserving some TANF funds for future unexpected needs, such as the need to expand assistance in the event of an economic downturn. This analysis suggests that some states could accommodate significant new investments in needy families with children while continuing to maintain reserves of unspent funds.(4)

 

Data Source

Each state is required to report to the U.S. Department of Health and Human Services on its expenditures of TANF funds on a quarterly basis, using a reporting form known as "ACF-196." These forms detail expenditure of TANF funds by major category, such as "cash and work-based assistance" and "work activities." The reports also show the extent to which states transferred TANF funds to the social services block grant and the child care block grant, as well as the amount of TANF funds that remain unspent. The reporting forms also include information on the expenditures states must make from their own funds as a condition of receiving the TANF block grant — known as state maintenance-of-effort (MOE) funds.

This analysis includes data from ACF-196 reports for the quarter ending on March 31, 1999, the middle of federal fiscal year 1999. (The federal fiscal year runs from October 1 through September 30.) While these reports are filed on a quarterly basis, they do not reflect spending for only one quarter. Instead, they reflect cumulative spending through the end of the relevant quarter. Thus, the reports filed for the second quarter of federal fiscal year 1999 reflect spending through March 31, 1999.

These data were collected in May and June 1999 by the Center on Budget and Policy Priorities from the state agencies responsible for preparing the ACF-196 reports. In every state, the reports are prepared by a division of the welfare agency — typically the budget, accounting, or federal reporting division. It should be noted that these data have not been verified by the U.S. Department of Health and Human Services and thus should be considered preliminary. In addition, some states may have revised their ACF-196 reports since the time when the report was obtained for this analysis.

 

Background

A few concepts related to the budgeting and reporting of TANF and MOE expenditures are important to understand before analyzing the data that states have submitted to HHS. These concepts are necessary to understanding the nature of a state's unspent TANF funds.

First, because states do not have to spend a given year's TANF allocation within that year, expenditures made during a given fiscal year could come either from a state's current-year TANF allocation or from funds that remained unspent from a previous year's allocation. In some states, TANF-funded programs are being supported this year by a mixture of funds from the state's fiscal year 1997, fiscal year 1998, and fiscal year 1999 allocations. The TANF financial reporting rules require states to provide separate quarterly reports for each year's block grant allocation until it is fully expended. This paper identifies the unspent balance from each year's grant, as well as the cumulative amount of unspent TANF funds in each state — that is, the combination of unspent funds from the 1997, 1998, and 1999 block grants. Unspent TANF funds for the first half of fiscal year 1999 are calculated by comparing the use of TANF funds through the first half of the fiscal year with one-half of the fiscal year 1999 grant amounts. (The full-year TANF allocations for fiscal year 1999 are included in Table IV of this report.)

Second, TANF funds that a state has not spent (or transferred to another block grant) actually fall into one of two categories, following traditional budgeting methods: "unliquidated obligations" and "unobligated" funds.

Final TANF Regulations Restrict Use of Unspent TANF Funds

The final TANF regulations issued in April 1999 include a new — and somewhat restrictive — interpretation of the welfare law that will limit to some extent the uses of unspent TANF funds.

The welfare law notes that "a State may reserve amounts paid to the state under this part for any fiscal year for the purpose of providing, without fiscal year limitation, assistance under the State program funded under this part." (Section 604(e) of PRWORA) The preamble to the final TANF regulations interprets this provision to mean that states can spend reserve funds only on activities considered "assistance." (64 FR 17840-41) The term "assistance" is defined in the regulations to include benefits and services that have an income value and help families meet ongoing basic needs, with the exception of services that act as work supports for employed families. This definition of "assistance" is important because the major TANF restrictions — such as time limits — apply to the provision of "assistance" but not to services that are considered "non-assistance."

The federal regulations thus do not allow states to use unspent TANF funds from previous years on some otherwise allowable activities. In particular, states can not transfer TANF carryover funds to the social services or child care block grants, and states cannot use such funds to support "non-assistance" services.* These activities represent a substantial — and growing — share of the use of TANF funds.

The regulations provide one exception to the restriction on use of prior-year TANF funds. If a state obligates TANF funds from a given fiscal year for "non-assistance" before the fiscal year ends, those funds do not have to be spent until the end of the following fiscal year. For example, if a state obligates a portion of its fiscal year 2000 TANF funds to provide transportation services for working parents, those funds can be spent in fiscal year 2000 or fiscal year 2001. Any such funds not expended by the end of 2001 could be spent only on activities considered "assistance."

It is not yet clear how significant the limitation on the use of unspent TANF funds will be. States interested in transferring TANF funds to the child care or social services block grants will have to identify their needs and plan the transfers early enough in the fiscal year so that full transfers can be made before the fiscal year ends. In future years, states also may need to adjust their distribution of TANF funds so that assistance activities are funded with unspent funds and non-assistance activities are funded with current-year funds.
_________________________________
* In guidance issued since release of the federal regulations, HHS has noted that states do not have to follow these guidelines until October 1, 1999. (TANF-ACF-PA-99-1, available at http://www.acf.dhhs.gov/programs/ofa/pa-99-1.htm.  Until then, states may transfer unspent TANF funds to the child care or social services block grant or on any activity that meets a "reasonable" definition of assistance.

Because unliquidated obligations generally reflect an intent to make expenditures — and thus may not be available for spending the way that funds are — this report generally does not measure unliquidated obligations in its analysis of unspent funds. Nevertheless, there are a number of states that report substantial amounts of unliquidated obligations — in some cases as much as two-thirds of the TANF funds available to them since the TANF block grant was implemented in fiscal year 1997. These states typically report having little or no unobligated funds. It is likely that at least a portion of these funds actually reflect what are commonly considered unobligated funds. As a result, Table II of this analysis identifies the unliquidated TANF obligations in all states that report having funds in this category. The explanatory text for Table II includes information on provisions of the final TANF regulations that will alter how states report unliquidated obligations.

Third, this analysis does not distinguish between the amounts of unspent TANF funds that states have set aside in "rainy day" reserves and the amounts that remain unspent for other reasons. A number of states have established such reserves in legislation. Other states have chosen not to spend all of their TANF funds in order to establish a fiscal cushion, even though they have not created a reserve account in legislation. States are not required to report such information to HHS, and thus amounts in reserve funds cannot be identified from the ACF-196 reports.(5)

Finally, this analysis does not reflect unspent state funds that have been set aside as a reserve to cover expenditures that qualify for MOE purposes. A small number of states have created such reserves.(6) But because states must meet their MOE requirement each year with expenditures on benefits and services, state funds placed in a reserve in a given year do not count toward that year's MOE requirement, and they are not reported to HHS. Such funds can count toward a state's MOE requirement when they are drawn from the reserve account and spent on allowable benefits and services.

 

TABLE I:
Unspent TANF Funds through the Middle of Federal Fiscal Year 1999

Using data collected from state welfare agencies, Table I identifies the level of unspent TANF funds in each state as of March 31, 1999 — the middle of federal fiscal year 1999 — the most recent data available.

The first three columns identify unspent TANF amounts from each state's fiscal year 1997, fiscal year 1998, and fiscal year 1999 allocations. The table also shows the accumulated amount of unspent TANF funds from the three block grant allocations.

The final column of Table I measures the accumulated unspent TANF funds as a percentage of the cumulative amount of TANF funding available to each state from fiscal year 1997 through the middle of fiscal year 1999. It thus reflects the portion of all TANF funds available to the state since the inception of the TANF block grant that have not been spent. Note that this measure is different from that used in previous Center on Budget and Policy Priorities publications on unspent TANF funds. The earlier analyses compared accumulated unspent funds with the state's one-year TANF allocation. The new measure may be more revealing because it reflects the actual percentage of available TANF funds since the implementation of the block grant that have not been used. Each state's fiscal year 1999 TANF allocation is included in Table IV of this report, for those interested in comparing unobligated funds with the annual block grant amounts.

EXAMPLE: As of March 31, 1999, Louisiana had spent all of its fiscal year 1997 TANF funds and had $49.9 million in funds remaining from its fiscal year 1998 block grant. In the first half of fiscal year 1999, the state's use of TANF funds equaled $56.9 million less than half of its fiscal year 1999 TANF allocation of $172.3 million.  The sum of the state's unspent TANF funds through the middle of fiscal year 1999 equaled $106.8 million. The table shows that the state has not spent 28 percent of the TANF funds that have been available to it since it implemented its TANF program in fiscal year 1997.

The figures presented here differ from those presented in the ACF-196 financial reports states submitted to HHS in one key way. As noted, Table I compares TANF funds that were spent, transferred, or obligated in the first half of fiscal year 1999 with half of the state's 1999 TANF allocation. The unobligated funds identified in the state TANF financial reports, by contrast, reflect the difference between state uses of TANF funds and the amount of TANF funds "awarded" to the state through the first half of the fiscal year. The amount "awarded" in essence reflects the amount the state has reported to HHS that it may need and would like to have access to during a given period.(7) In most states, the amount "awarded" in the first half of fiscal year 1999 was equal or nearly equal to half of the annual block grant amount. In some states, however, the amount "awarded" was somewhat more or less than half of their fiscal year 1999 block grant amount. Because the TANF amount "awarded" to states is a somewhat arbitrary figure when considering unspent funds, it is more revealing to compare uses of TANF funds in the first six months of the year with half of the block grant, as is done in Table I.

As a result, the unobligated funds for fiscal year 1999 shown in Table I may differ from the amounts of unobligated funds reported by states in their ACF-196 reports. For example, Alabama was awarded $74.9 million in TANF funds in the first half of fiscal year 1999, or 76 percent of its fiscal year 1999 block grant allocation. The state reported $22.6 million in expenditures, transfers, and obligations, and $52.4 million in unobligated funds. If the state had been awarded only half of its 1999 TANF block grant — $49.4 million — then the state would have reported $26.8 million in unobligated funds for the first half of the fiscal year, as shown in Table I. This figure is a better reflection of the extent to which the state did not spend TANF funds in the first half of fiscal year 1998 than the higher figure derived by comparing TANF expenditures with the amount of TANF funds awarded to the state during the half of fiscal year 1999.

It also should be noted that a number of states report having no unobligated federal TANF funds. This includes some states, such as Indiana and Wyoming, that have had dramatic caseload declines and therefore would be expected to have some unspent funds. As discussed in the description of Table II, these states often have substantial amounts of unspent TANF funds, but they are reported as unliquidated obligations. There are indications that some of these unliquidated obligations are in fact unobligated funds available for spending. For this reason, it is worthwhile to consider the amount of each state's unliquidated obligations from the TANF block grant, which is done in Table II.

Table l
Unspent TANF Funds As of March 31, 1999

(Middle of Fiscal Year 1999)

Unspent TANF Funds from:

FY1997
Allocation

FY1998
Allocation

First Half of
FY 1999 Allocation
a

Total Unspent Funds As of Mid-FY1999

Unspent Funds As Percent of TANF Funds Available Since FY 1997 b

(figures in millions)

Alabama

$0

$20.1

26.8

$46.9

21%

Alaska

0

0

6.1

6.1

5

Arizona

11.4

27.9

31.4

70.6

12

Arkansas

0

0

1.7

1.7

2

California

0

0

526.8

526.8

6

Colorado

0

0

5.6

5.6

2

Connecticut

0

0

9.7

9.7

1

Delaware

0

0

0

0

0

D.C.

0

31.8

0

31.8

16

Florida

0

180.9

132.8

313.7

22

Georgia

0

0

75.6

75.6

10

Hawaii

0.3

0.9

0

1.1

1

Idaho

0

22.9

15.5

38.3

62

Illinois

0

0

0

0

0

Indiana

0

0

0

0

0

Iowa

0

0

6.0

6.0

2

Kansas

0

0

24.2

24.2

9

Kentucky

1.0

38.1

-8.5

30.5

7

Louisiana

0

49.9

56.9

106.8

28

Maine

0

0

5.1

5.1

3

Maryland

56.2

44.6

55.1

155.9

30

Massachusetts

0

0

0

0

0

Michigan

0

0

163.1

163.1

8

Minnesota

0

46.4

133.7

180.1

35

Mississippi

0

39.9

20.7

60.6

27

Missouri

0

0

0

0

0

Montana

0

0

1.5

1.5

1

Nebraska

0

0

4.7

4.7

3

Nevada

0

0

0

0

0

New Hampshire

0

0

8.8

8.8

9

New Jersey

66.1

49.3

115.6

231.0

26

New Mexico

34.0

30.9

5.9

70.7

28

New York

0.1

290.4

478.8

769.2

14

North Carolina

0

0

100.0

100.0

14

North Dakota

2.3

0

8.8

11.1

22

Ohio

0

0

137.9

137.9

8

Oklahoma

0

64.0

68.6

132.5

36

Oregon

0

0

0

0

0

Pennsylvania

0

152.3

0

152.3

10

Rhode Island

0

0

21.7

21.7

12

South Carolina

6.5

23.8

21.0

51.4

21

South Dakota

0

0

4.4

4.4

9

Tennessee

28.7

46.5

6.0

81.3

17

Texas

0

0

39.6

39.6

3

Utah

0

0

19.2

19.2

10

Vermont

0

0

7.8

7.8

7

Virginia

0

0

22.9

22.9

7

Washington

0

14.1

172.7

186.8

21

West Virginia

0

71.6

36.9

108.4

44

Wisconsin

0

16.6

142.9

159.5

20

Wyoming

0

0

0

0

0

a This reflects the difference between half of the state’s 1999 TANF block grant and combined amount of expenditures, transfers to CCDBG or SSBG, and obligations of TANF funds reported as of March 31, 1999.
b This reflects accumulated unspent TANF funds as a percent of cumulative TANF block grant amounts for fiscal year 1997, fiscal year 1998, and half of fiscal year 1999.
Source: Center on Budget and Policy Priorities

TABLE II:
States With Unliquidated Obligations of TANF Funds at the End of Federal Fiscal Year 1998

The figures in Table I do not reflect amounts of unliquidated obligations because such funds generally are not available for new spending initiatives as unobligated funds are. Unliquidated obligations are intended to reflect amounts a state has committed to spend — through contracts that have been established or goods and services that have been received — but has not yet paid out.

A number of states report substantial unliquidated obligations of TANF funds. It appears that in some states, at least a portion of these funds may actually reflect unobligated funds. Some states, for example, report as unliquidated obligations all TANF funds that have not been transferred or expended, whether those funds have been committed for a specific purpose or not. State officials in Montana, Nevada, and Wyoming that prepare the TANF financial reports, for example, confirmed this practice in phone conversations. This suggests that a state with substantial unliquidated obligations and little or no unobligated funds may be reporting what would traditionally be considered unobligated funds as unliquidated obligations.

New TANF financial reporting requirements issued along with the final TANF regulations, include several new rules related to the reporting of unliquidated obligations. (See 64 FR 17919) Beginning with the first reporting period in federal fiscal year 2000, states must report as unliquidated obligations only amounts that meet the definition as established in the general regulations governing grants provided through the U.S. Department of Health and Human Services.(8) Second, TANF rainy day reserves — TANF funds states have left unspent as a reserve for unforeseen needs — must be reported as unobligated funds, not as unliquidated obligations. Finally, the new reporting rules note that unliquidated obligations for certain activities (those deemed "non-assistance") must be spent within the fiscal year they are obligated or within the following fiscal year. After that, any such funds not actually expended must be reported as unobligated funds. (See the box on page five for more information.)

Table II identifies the unliquidated TANF obligations from each state's TANF allocation for fiscal years 1997, 1998, and 1999 as of March 31, 1999. The table also indicates the combined amount of unliquidated obligations from the three annual block grants as reported for the period ending March 31, 1999.

Finally, Table II calculates the amount of each state's unliquidated obligations as a percentage of the cumulative amount of TANF funds made available to each state through the middle of fiscal year 1999. As with Table I, this measure is somewhat different from the measure presented in earlier Center on Budget and Policy Priorities analyses, which calculated the unliquidated obligations as a percentage of each state's annual TANF grant.

EXAMPLE: As of the middle of federal fiscal year 1999, Montana reported $38.6 million in federal TANF funds as unliquidated obligations. This includes unliquidated obligations from its TANF allocations for fiscal years 1997, 1998, and 1999.  The amount of unliquidated obligations is equivalent to 37 percent of the TANF funds that have been available to the state from the inception of its TANF program.

Note that the table provides data for 29 states. States that are not listed reported no unliquidated obligations as of the middle of federal fiscal year 1999.

Table II
Unliquidated Obligations of TANF Funds As of March 31, 1999
(Middle of Fiscal Year 1999)

Unliquidated Obligations of TANF Funds from:

FY1997
Allocation

FY1998
Allocation

First Half of FY 1999 Allocation

Total Unliquidated Obligations As of Mid-FY1999

Unliquidated Obligations As Percent of TANF Funds Available Since FY 1997 a

(figures in millions)

Alaska

$0

$10.9

$2.9

$13.8

12%

Arizona

0

22.7

17.7

40.4

7

Arkansas

0

7.6

28.2

35.8

33

California

689.5

491.0

18.0

1198.5

14

Colorado

0

39.6

51.1

90.8

35

D.C.

0.1

0

8.1

8.2

4

Florida

0

92.9

0

92.9

5

Georgia

0.6

12.6

24.1

37.4

5

Hawaii

0

0.1

0.8

0.8

0

Indiana

20.0

93.2

36.7

149.9

29

Iowa

0

0

38.8

38.8

11

Maryland

8.0

18.0

0

26.0

5

Massachusetts

0

0

75.5

75.5

5

Mississippi

13.8

6.2

6.2

26.1

12

Missouri

0

0

48.7

48.7

8

Montana

10.6

17.9

10.7

38.6

37

Nevada

0

.04

8.5

8.9

9

New Jersey

0

50.1

0

50.1

5

New Mexico

0

4.9

0

4.9

2

New York

40.6

141.4

0

182.0

3

Ohio

75.0

255.6

186.7

517.4

28

Oregon

0

0

32.9

32.9

7

Pennsylvania

0

18.7

64.1

82.8

6

South Dakota

3.4

8.0

0

11.3

18

Tennessee

1.6

10.4

22.4

34.4

7

Texas

0

145.8

72.9

218.6

15

Virginia

0

0

32.0

32.0

9

Wisconsin

44.3

121.8

0

166.1

17

Wyomingb

15.6

21.4

6.2

43.2

84

a This reflects accumulated unliquidated obligations as a percent of cumulative TANF block grant amounts for fiscal year 1997, fiscal year 1998, and half of fiscal year 1999.
b Figures for Wyoming for fiscal years 1997 and 1998 are as of September 30, 1998. More recent data were not available at the time of this report’s publication.
Source: Center on Budget and Policy Priorities

TABLE III:
MOE Spending through the Middle of Federal Fiscal Year 1999

In order to receive federal TANF funds, states must spend specified amounts of their own funds on activities that meet one of the purposes of the welfare law. The maintenance-of-effort (MOE) requirement under TANF requires states to spend an amount equal to at least 80 percent of the amount spent on AFDC programs in federal fiscal year 1994. States that meet the work participation requirements in the federal law are allowed to reduce state MOE spending to as low as 75 of the fiscal year 1994 baseline.

Because states must meet the MOE requirement or face significant financial penalties, unspent funds under TANF/MOE typically show up as federal TANF funds and not MOE funds. Nevertheless, information on the level of MOE expenditures in each state can be useful to understanding a state's unspent TANF funds.

Table III presents each state's MOE spending level in the first half of the year and measures the MOE spending as a percentage of the MOE baseline. Because states must spend at either the 80 percent level or the 75 percent level to meet the minimum annual MOE requirement, states would have to have spent at the 40 percent level (or at the 37.5 percent level) as of March 31 to have met at least half of annual MOE requirement.

EXAMPLE: Rhode Island's reported MOE spending in the first half of federal fiscal year 1999 totaled $41 million, which is equal to 51 percent of the MOE baseline. This means the state had met more than half of its annual MOE requirement as of the middle of the fiscal year.

Table III
State MOE Spending in the First Half of Federal Fiscal Year 1999
(As of March 31, 1999)

MOE Expenditures, First Half of Federal Fiscal Year 1999

Spending as a Percent of the MOE Baseline
("MOE Level")

Annual
MOE Baseline

(figures in millions)

NOTE: States must spend at least 80 percent (75 percent in some cases) of the MOE baseline during each fiscal year States spending at least 40 percent (or 37.5 percent) of the baseline as of mid-1999 would have met at least half of the annual MOE requirement.

Alabama

$16.3

31.1%

$52.3

Alaska

21.6

33.1

65.3

Arizona

43.1

34.3

125.7

Arkansas

7.4

26.7

27.8

California

832.7

22.9

3,634.7

Colorado

42.4

38.4

110.5

Connecticut

85.7

35.1

244.6

Delaware

8.9

30.7

29.0

D.C.

30.0

32.0

93.9

Florida

191.5

39.0

491.2

Georgia

30.2

13.0

231.2

Hawaii

35.3

37.2

94.9

Idaho

5.7

31.0

18.2

Illinois

188.0

32.8

573.5

Indiana

55.9

37.0

151.4

Iowa

39.7

48.1

82.6

Kansas

43.2

52.5

82.3

Kentucky

34.6

38.4

89.9

Louisiana

30.8

41.7

73.9

Maine

23.9

47.8

50.0

Maryland

67.4

28.6

236.0

Massachusetts

167.7

35.0

478.6

Michigan

163.3

26.1

624.7

Minnesota

95.8

40.0

239.7

Mississippi

5.6

19.5

29.0

Missouri

64.1

40.0

160.2

Montana

7.6

36.1

21.0

Nebraska

15.2

39.8

38.2

Nevada

18.3

53.9

34.0

New Hampshire

16.1

37.5

42.8

New Jersey

150.1

37.5

400.2

New Mexico

18.4

37.0

49.8

New York

783.3

34.2

2,291.4

North Carolina

74.0

36.0

205.6

North Dakota

6.0

49.8

12.1

Ohio

212.3

40.7

521.1

Oklahoma

32.7

40.0

81.6

Oregon

41.1

75.0

122.2

Pennsylvania

189.0

34.8

542.8

Rhode Island

41.0

51.0

80.5

South Carolina

19.1

39.9

47.9

South Dakota

4.8

42.3

11.4

Tennessee

26.3

23.8

110.4

Texas

125.7

40.0

314.3

Utah

12.6

37.5

33.7

Vermont

13.7

40.2

34.1

Virginia

52.6

30.8

170.9

Washington

134.3

37.0

362.7

West Virginia

22.2

51.5

43.1

Wisconsin

69.9

31.0

225.2

Wyoming

6.0

42.4

14.1

Source: Center on Budget and Policy Priorities

TABLE IV:
Basic Information on TANF and MOE Funds

This table provides the amount of each state's fiscal year 1999 TANF allocation. This includes a basic grant in all states and a supplemental grant for which a small number of states may be eligible. Some states automatically are eligible for the supplemental grant each year, while others qualify if certain conditions continue to be met. The table shows the supplemental TANF grant states would receive if all states that received a supplemental grant for fiscal year 1999 continued to be eligible in 1999. The total grant for each year equals the basic grant plus the supplemental grant if the state receives one. Table IV also provides MOE spending amounts at the 75 percent, 80 percent, and 100 percent level. These figures are presented for background purposes.

EXAMPLE: Mississippi's basic TANF allocation equals $86.8 million. The state is automatically eligible for a supplemental TANF grant, and the fiscal year 1999 supplement totals $4.4 million. That results in total TANF funding of $91.2 million in fiscal year 1999. The state would have to spend $21.7 million in state funds to meet the 75 percent MOE level, $23.2 million to meet the 80 percent MOE level, and $29 million to meet the 100% MOE level.

Table IV
TANF Allocations and MOE Requirements

MOE Requirement

Basic Annual TANF Allocation

Supplemental Grant, FY 1999a

75%
Level

80%
Level

100%
Level

(all figures in millions)

Alabama

$93.3

$5.4

$39.2

$41.8

$52.3

Alaska

63.6

3.4

48.9

52.2

65.3

Arizona

220.6

11.7

94.3

100.6

125.7

Arkansas

56.7

3.0

20.8

22.2

27.8

California

3,732.7

2,726.1

2,907.8

3,634.7

Colorado

136.1

6.6

82.9

88.4

110.5

Connecticut

266.8

183.4

195.6

244.6

Delaware

32.3

21.8

23.2

29.0

D. C.

92.6

70.4

75.1

93.9

Florida

562.3

29.5

368.4

392.9

494.6

Georgia

330.7

18.2

173.4

184.9

231.2

Hawaii

98.9

71.1

75.9

97.3

Idaho

31.9

1.7

13.7

14.6

18.2

Illinois

585.1

430.1

458.8

573.5

Indiana

206.8

113.5

121.1

151.4

Iowa

131.5

62.0

66.1

82.6

Kansas

101.9

61.7

65.9

82.3

Kentucky

181.3

67.4

71.9

89.9

Louisiana

164.0

8.3

55.4

59.1

73.9

Maine

78.1

37.5

40.0

50.0

Maryland

229.1

177.0

188.8

236.0

Massachusetts

459.4

358.9

382.9

478.6

Michigan

775.4

468.5

499.8

624.7

Minnesota

268.0

179.7

191.7

239.7

Mississippi

86.8

4.4

21.7

23.2

29.0

Missouri

217.1

120.1

128.1

160.2

Montana

45.5

2.3

15.7

16.8

21.0

Nebraska

58.0

28.6

30.5

38.2

Nevada

44.0

1.8

25.5

27.2

34.0

New Hampshire

38.5

32.1

34.3

42.8

New Jersey

404.0

300.2

320.2

400.2

New Mexico

126.1

6.6

37.3

39.8

49.8

New York

2,442.9

1,718.6

1,833.2

2,291.4

North Carolina

302.2

17.6

154.2

164.5

205.6

North Dakota

26.4

9.1

9.7

12.1

Ohio

728.0

390.8

416.9

521.1

Oklahoma

147.8

61.2

65.3

81.7

Oregon

166.8

91.6

97.7

123.0

Pennsylvania

719.5

407.1

434.3

542.8

Rhode Island

95.0

60.4

64.4

80.5

South Carolina

100.0

35.9

38.3

47.9

South Dakota

21.3

8.5

9.1

11.7

Tennessee

191.5

10.5

82.8

88.3

110.4

Texas

486.3

25.7

235.7

251.4

314.3

Utah

76.8

4.2

25.5

27.3

33.7

Vermont

47.4

25.5

27.3

34.1

Virginia

158.3

128.2

136.7

170.9

Washington

404.3

272.0

290.1

362.7

West Virginia

110.2

32.3

34.4

43.1

Wisconsin

317.5

168.9

180.1

225.6

Wyoming

21.5

10.5

11.1

14.2

TOTAL

$16,488.5

$160.9

$10,435.0

$11,130.6

$13,913.3

a Some states automatically receive a supplemental grant, while eligibility for supplemental grants in other states is determined each year. The figures here represent the supplemental grants that would be received if all potentially eligible states were determined to be eligible.
Source: U.S. Department of Health and Human Services.

Endnotes:

1. States with rapidly growing populations or that historically spent less per poor person receive small supplemental TANF grants.

2. For more information on the final TANF regulations, see "Highlights of the Final TANF Regulations," Center on Budget and Policy Priorities, at https://www.cbpp.org/4-29-99wel.htm.

3. "Helping Families Achieve Self-Sufficiency: A Guide on Funding Services for Families and Children through the TANF Program," U.S. Department of Health and Human Services, Administration for Children and Families, May 1999 (http://www.acf.dhhs.gov/programs/ofa/funds2.htm).

4. Other recommendations for using unspent TANF funds can be found in Reinvesting Welfare Savings: Aiding Needy Families and Strengthening State Welfare Reform, Center on Budget and Policy Priorities, March 1998. The report is available at https://www.cbpp.org/330rein.htm.

5. Under the application of federal cash management policies to the TANF block grant, federal funds are transferred to states only as reimbursement for actual expenditures on TANF programs. Because establishment of a "rainy day" fund does not entail an expenditure on benefits and services, such funds remain as unobligated TANF funds or unliquidated obligations until the state taps into the reserve fund. The funds remain in the federal treasury. For a listing of some state actions to establish reserves, see Elaine Ryan and Anna Lovejoy, "State Approaches to Human Services Future Investment Funds," American Public Human Services Association, September 1998. The report can be found on the Internet at http://www/aphsa.org/hotnews/rainyday.htm.

6. See Ryan and Lovejoy, cited in footnote five, for information on state reserves.

7. The federal government sets limits on the portion of the TANF block grant a state can be awarded for a given calendar quarter. The awarded amount represents the maximum amount for which a state can claim reimbursement in a given period.

8. The regulations governing HHS grants define obligations as "amounts of orders placed, contracts and subgrants awarded, goods and services received, and similar transactions during a given period that will require payment by the grantee during the same or a future period." Unliquidated obligations are those for which payment has not been made. See 45 CFR § 92.3.