June 3, 2003
STATES ARE CUTTING TANF AND CHILD CARE PROGRAMS
Supports for Low-Income Working Families and
Welfare-to-Work Programs are Particularly Hard Hit
By Sharon Parrott and Nina Wu
PDF of the full report
HTM of press release
PDF of press release
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More than 35 states have made cuts in programs funded with TANF and child care block grant funds, and most of these cuts are in programs that promote the goals of welfare reform. The cuts reflect both the exhaustion of many states’ surplus TANF funds from prior years and the large budget gaps many states face. The breadth and depth of these cuts highlight the importance of upcoming Congressional action on legislation to reauthorize TANF: if this legislation imposes costly new mandates on states yet provides insufficient funds to help states fulfill these mandates, states will be forced to make even more cuts in programs that help families move from welfare to work.
Recent state cuts include substantial cuts in child care programs for low-income working families, work programs designed to help TANF cash assistance recipients find jobs, services and supports for very disadvantaged families, cash assistance benefits for low-income working families, and programs designed to meet the broader “family formation” goals of TANF, such as pregnancy prevention efforts.
- Cuts in Welfare-to-Work Programs: At least fifteen states have scaled back efforts to help TANF recipients improve their skills and find jobs or are proposing to do so. For example, Louisiana plans to cut funding for literacy programs in 2004, while California, Indiana, Massachusetts, and Montana already have cut funding for education, training, and job search programs for TANF recipients.
- Cuts in Programs to Help the Most Disadvantaged Families: At least eleven states have cut assistance to poor families with the most severe problems or such cuts have been included in the governor’s 2004 budget proposal. For example, in 2003, Connecticut eliminated a $1 million program that provided intensive case management for TANF recipients with serious barriers to employment, Arizona sharply reduced TANF funding for substance abuse treatment, and Massachusetts eliminated an $8.2 million eviction prevention program which helped some 8,000 families pay back rent and avoid eviction in 2002.
- Cuts in Transportation Assistance: In at least eight states, funding has been cut for transportation assistance either for TANF recipients who are working or participating in work programs or for low-income working families. For example, over the past two years, Arkansas, Arizona, Montana, and Tennessee each cut funding for programs that helped TANF recipients and other low-income families purchase affordable cars.
- Cuts in Basic Cash Assistance Benefits: In at least ten states, basic cash benefit levels, cash benefits for working families, or eligibility for cash benefits has been cut or is being considered for cuts. For example, Indiana and West Virginia have reduced cash benefits for low-income working families, Montana is planning to reduce cash benefit levels from 40.5 percent to 30 percent of the federal poverty level, and the conference committee budget report in Texas reduces the amount of assets a family may have and still qualify for TANF cash assistance from $2,000 to $1,000. In Oregon, the revised governor’s budget calls for $11 million in cuts to the TANF cash assistance program and states that these cuts may be achieved by eliminating eligibility for all two-parent families, imposing stricter time limits on benefit receipt, and reducing cash benefits by $20 per month.
- Cuts in Teen Pregnancy Prevention Programs: Massachusetts, North Carolina, Tennessee, and the District of Columbia have reduced or eliminated teen pregnancy prevention efforts as well as programs aimed at promoting responsible fatherhood and assisting non-custodial parents in finding employment.
- Cuts in Child Care Programs: Some 32 states have reduced income eligibility limits, instituted waiting lists, increased the co-payments that low-income working families must make for child care, reduced provider payments, reduced funding dedicated to improving the quality of child care, or are proposing to take such steps in 2004. For example, New Mexico has reduced the eligibility limit for child care from 200 percent to 130 percent of the poverty line, Connecticut has stopped approving new applications for child care for low-income working families, Louisiana increased co-payments families must pay, and Michigan cut provider payments. The General Accounting Office (GAO) recently issued the results of its survey of child care cuts being made or proposed by states and reported similar findings. The GAO found that that since 2001, 23 states made changes in their child care programs that reduced the availability of assistance and 11 states were considering child care cuts for 2004.
Click here to view the full report.
 Throughout this report, the District of Columbia is treated as a state.
 General Accounting Office, “CHILD CARE: Recent State Policy Changes Affecting the Availability of Assistance for Low-Income Families,” GAO-03-588, May 2003.