Arizona’s TANF Experience Highlights Problems with Block-Granting Safety Net Programs

The poor performance of Arizona’s Temporary Assistance for Needy Families (TANF) program shows why policymakers should not convert other key safety net programs to block grants. The flexibility that states get under the TANF block grant has let Arizona do little to help the most vulnerable families.

Arizona has used its flexibility over how to spend TANF funds to ease state budget shortfalls and fund other priorities, shifting dollars away from helping poor families meet basic needs or prepare for work. The state spends less than 8 percent of federal and state TANF funds on the core welfare reform activities of cash assistance, work-related activities and supports, and child care — the nation’s lowest share. It spends almost half of its TANF funds on child welfare programs and another 30 percent on other services.

Unlike entitlement programs, which expand to meet increased need during recessions, many state TANF programs like Arizona’s haven’t expanded to respond to the rise in poor families needing assistance. In fact, with TANF’s unfettered flexibility, Arizona chose to shorten TANF time limits, cut benefits, and impose other eligibility restrictions in 2009, during the Great Recession. Since then, although poverty rose, the state’s TANF caseload has dropped by almost 75 percent.

TANF has no federal requirement to actually serve poor families or provide a base level of benefits. The reach of cash assistance has fallen dramatically in Arizona since TANF’s start. In 2014-15, just 7 of every 100 poor families with children received cash assistance, a drop from 42 in 1995-96, the last year of Aid to Families with Dependent Children, TANF’s predecessor.

Families that get TANF receive very low benefits. For an Arizona family of three, the maximum monthly cash benefit is $278 — lower than in 1996 in nominal dollars. That represents a 47 percent inflation-adjusted drop since 1996, the nation’s largest decline.

In 2016, Arizona implemented a 12-month time limit, the nation’s shortest. As we noted yesterday, Governor Doug Ducey’s TANF proposal to extend that time limit wouldn’t help the families that most need more time and more assistance to prepare for and connect to work. Arizona shows how state flexibility under a block grant decimates the safety net for poor families and why policymakers shouldn’t convert other programs into block grants.