Questions have arisen about Tennessee’s Families First $732.7 million in surplus TANF funds
Posted By Sparta Live | November 25, 2019 10:35 am
Democratic Dialog – By Debra Wines
The original story regarding Tennessee’s Families First program’s excess funds broke a few weeks ago by the Beacon Center of Tennessee while researching Tennessee’s public assistance programs. The Beacon Center is a nonpartisan conservative “think tank.” During their research of data for their report, “Poverty to Prosperity,” it was discovered our state receives $190.9 million annually from the federal government’s program, Temporary Assistance for Needy Families. They found Tennessee spent $71.1 million or 37 percent of those funds last year. The leftover funds were placed in a reserve fund, which is currently $732.7 million. The governor’s office and officials from the state’s Department of Human Services originally claimed the excess money is being saved in case the economy takes a downturn and more families may need assistance. As of late October, the state had no plans how or if it would disperse any portion of the surplus. Tennessee currently has the largest reserve of unused money from the TANF program. New York and Pennsylvania, respectively have $513 million and $430 million in reserves. Most states have less than $300 million in their reserves. Tennessee’s poverty rate is 16.7 percent, which is above the national average; we also have one of the highest rates of childhood poverty at 28 percent.
TANF came into existence, in 1996, as part of the changes to the previous welfare system. It was meant to help the poor transition from welfare to self-sufficiency. In Tennessee, there is a lifetime limit of five years to receive funds from our “Families First” program. It provides help with a cash stipend of an average of $243 a month, childcare, transportation, and job training for those who qualify. Each state is allowed to determine how to structure their program and how much money will be used to help poor families. Some of Tennessee’s funds have been given to non-profit organizations such as Project Return, the United Way of Nashville, and Gideon’s Army.
As part of their research, the Beacon Center also discovered the state of Tennessee used 19 percent or $26.2 million of their yearly grant on overhead and administrative costs, in 2018. The average other states spend on overhead and administrative costs is less than 8 percent. Tennessee’s Department of Human Services has disputed that amount stating they only spent $20 million on those expenses, in 2018, and the same amount in 2019. That amount is still higher than the average spent by other states.
The federal rules give states wide flexibility in using the TANF funds. One option is that states can transfer up to 10 percent of their annual grant money to state-run social service programs. States are also allowed to transfer up to 30 percent to the Child Care Development Fund. Tennessee does not participate in transferring any funds to any other programs, which is rather like shooting yourself in the foot. Judge Duane Stone, who was instrumental in starting a treatment program for pregnant opioid abusers in rural areas of northeastern Tennessee, stated this program will be running out of funding soon. Some of those reserved funds could keep that program, and other programs addressing the opioid crisis in Tennessee, functioning and/or expanding. The money could also fund treatment, individual and family therapy for other drug and alcohol addicts. The possible 30 percent of additional funding for the Child Care Development Fund could help parents with subsidies for child care while they are in school or working to become more self-sufficient. The funds would help train child care workers and help open more child care centers.
The Tennessean reported, on Nov. 18, 2019, the speakers of the Tennessee General Assembly had appointed a bipartisan group of legislators to begin work on possible solutions to the state’s large reserve of TANF money. Representative Robin Smith, R-Hixson, one of the members in the group, stated, “We’re going to dig deep and try to understand how this reserve reached this amount.” Rep. Smith was alarmed that Tennessee has the most unused TANF funding than any other state in the union. She also stated in order for the program to be successful, it must give recipients the help they need to get out of poverty and eventually off the welfare rolls, which means Tennessee must provide the proper services to the people in need.
Steve Dickerson, R-Nashville, indicated the group will begin studying the issue shortly but was unclear how often the group would be meeting. He said they will probably hear testimony about the program and look at additional uses for the excess funds and possibly offer legislative solutions during their upcoming session.
Gov. Bill Lee has changed his tune about addressing the excess money. At first, it appeared that Gov. Lee was satisfied to leave the $732.7 million in reserve. In the past few weeks, the public expressed their opinions about his stance, and now he is willing to find a strategy to reduce the surplus money to a more “normal” level.
On Nov. 19, DHS Commissioner Danielle Barnes suddenly announced they had a plan to reduce the surplus TANF money. Some of the leaders on the Tennessee General Assembly and members of the bipartisan working group were upset and expressed their annoyance at the timing of the announcement. Previously, Ms. Barnes gave no indication she had any plans for the surplus.
Ms. Barnes’ announcement includes limiting the size of the surplus fund to only three years of operational expenses, capping it at $342 million. She further stated more than $200 million would be used for new investments in programs. It was also reported an additional $200 million would be spent on TANF-related programs.
House Speaker Cameron Sexton was not pleased he had received this notice an hour before it was made public. “Unequivocally, the General Assembly should have been consulted prior to the statement. The importance of the legislature’s bipartisan working group is heightened due to today’s (Nov. 19, 2019) announcement.” The next few weeks should be interesting.