At an Appropriations hearing in the Illinois State House last week, the Department of Human Services (DHS) informed the legislature that it has insufficient funds to meet its Temporary Assistance to Needy Families (TANF) obligations through the fiscal year ending in June.
This is particularly disturbing since Illinois provides TANF benefits—which is cash assistance—to just 13 of every 100 families with children in poverty, according to the Center on Budget and Policy Priorities (CBPP). Prior to welfare reform in 1996 the state helped nearly 87 of every 100 families with children in poverty. Further, the benefit level is only 28 percent of the federal poverty line, or roughly $4,800 annually for a family of three, similar to that in a majority of states.
According to Dan Lesser, director of economic justice at the Shriver Center in Chicago, Illinois will find the funds to pay the TANF benefits one way or another—but just how the state will do it is a significant question.
“The governor has asked the legislature for a $73 million supplemental appropriation to pay for it,” says Lesser. “Historically, supplementals are approved here when they are needed. But nowadays nothing is assured. If it’s not approved, we face a real possibility of crashing the state’s child care system.”
That’s because without the supplemental, Illinois will pay cash assistance by diverting money DHS had intended to use to fund the state’s childcare assistance program.
Under welfare reform, a state can use its federal TANF block grant in a variety of ways, including cash assistance, childcare, education and job training, transportation, aid to children at risk of abuse and neglect, and other services to help low-income families. Since the block grant was set in 1996 and isn’t indexed for inflation, those dollars don’t go nearly as far—in fact, the block grant has lost nearly 30 percent of its value since that time. Also, because it’s locked in at the 1996 funding level, the program has proven unable to respond to greater need during the recession.
Source: Center on Budget and Policy Priorities
This inability to expand during an economic downturn came into play in Illinois, when unprecedented long-term joblessness and an increase in the number of people exhausting their unemployment benefits resulted in a greater need for TANF assistance than the state anticipated.
“Unlike many states, Illinois did not actively discourage families who were eligible for TANF during the recession from receiving it, so caseloads grew,” says Lesser.
Currently, 165,000 low-income children are in the Illinois childcare assistance program, making it possible for their parents to go to work or school. Lesser says if the supplemental appropriation isn’t approved, and funds intended for childcare are therefore diverted to meet TANF cash assistance obligations, payments to childcare providers will perpetually run one month behind schedule.