CITY LIMITS WEEKLY
An update from New York's Urban Affairs News Magazine
Week of April 17, 2000 Number 224
INSIDE THE NEW STATE BUDGET: A WELFARE SLUSH FUND
Add a new one to the list of behavioral changes wrought by welfare reform: the TANF
land grab. Since the old welfare program was replaced with the more flexible Temporary
Assistance to Needy Families block grant in 1997, and since declining welfare rolls have
left a hefty surplus of unspent funds, states have been using this cash much more
creatively-including using the money to pay for programs traditionally funded by state
government rather than putting it in welfare recipients' pockets.
According to an analysis from the budget watchdog group Fiscal Policy Institute, New
York State plans to use $591 million of its extra TANF cash next year to fund programs
formerly paid for through state tax revenues or other sources. (The state's total TANF
surplus is about $1.6 billion.)
"It's a money-laundering scheme," said Michael Kink, legislative counsel for
the housing and social services provider Housing Works. It's a zero-sum game: Although the
extra TANF cash does get slated for programs for poor and low-income New Yorkers,
lawmakers spirit away the state money it supplants, choosing instead to give out generous
tax breaks. Poor people don't reap the benefits of this whopping surplus.
The money pays for everything from big tax breaks for the working class ($174 million)
to a tiny dollop for studies of welfare reform (half a million). One project that welfare
advocates welcome is a $3 million Transitional Opportunities program to help people in the
process of leaving welfare.
TANF will also underwrite almost $18 million worth of pregnancy prevention programs, as
well as a controversial $4 million school attendance program that docks welfare recipients
with truant children. That program, called Learnfare, was originally supposed to sunset
this summer.
Most controversial is a plan to use up to $109 million for "recruitment and
retention" of human services workers: specifically, wage subsidies for health care
aides, hospital workers, foster care and mental health workers.
The state's Catholic Conference circulated a letter last week slamming the proposal as
a misuse of TANF funds. "If needy families need money or need food, that's what the
TANF money should be used for," said the Catholic Conference's Rick Hinshaw.
Ultimately, advocates say that although many of the TANF-funded programs provide sorely
needed help for poor people, there may simply be too many of them. "The bottom line
for TANF is that lots of constituencies get their own little favorite programs," said
Karen Schimke of the State Communities Aid Association. "Then, the state agencies
have to administer a whole slew of little bitty programs, and everybody wonders why it's
so difficult to get money out. It's too sliced up."
