Wednesday, January 12, 2000

CONTACT: Jim Jaffe, Michelle Bazie
(202) 408-1080

States Have Substantial Unspent Welfare Funds, But
Low-income Families Continue to Need Key Supports

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Two reports issued today by the Center on Budget and Policy Priorities focus on the levels of unspent state welfare funds and how states can enhance their welfare reform efforts by using these funds.

Welfare caseloads have fallen dramatically in almost every state since the early 1990s. Nationally, 2.4 million families received welfare cash assistance in mid 1999, a 52 percent reduction from the level of 5 million in early 1994. Cash assistance spending has also fallen. Federal and state expenditures for cash assistance benefits in fiscal year 1999 totaled $12.4 billion, or $10.6 billion less than in fiscal year 1994.

As a result of the drops in caseload and spending, many states have substantial Temporary Aid to Needy Families (TANF) surpluses of federal funds intended to assist low-income families. The report, Welfare Balances After Three Years of TANF Block Grants: Unspent TANF Funds at the End of Federal Fiscal Year 1999, provides data on each state’s TANF spending and surplus at the end of fiscal 1999.

There is $7.3 billion in unspent federal TANF funds that remain on deposit with the federal government for future use. Of this amount, $2.5 billion is considered "unobligated." The remaining $4.7 billion are shown as "unliquidated obligations," part of which reflects state commitments, but some of which may also be available for future allocation. The information comes from documents states file with the federal government. [Because of rounding, these figures don’t add exactly.]

These TANF surpluses, together with the healthy economy, provide an opportunity for states to enhance their TANF programs based on state experience about effective programs. The second report, Windows of Opportunity: Strategies to Support Families Receiving Welfare and Other Low-Income Families in the Next Stage of Welfare Reform, provides a series of steps states can take to meet the needs of families that continue to receive cash assistance and families that need additional supports to successfully remain working.

The Center on Budget and Policy Priorities is a nonpartisan research organization and policy institute that conducts research and analysis on a range of government policies and programs. It is supported primarily by foundation grants.

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