Keeping Budgetary Commitments to the Poor? Texas and the Welfare Block Grant, Eva De Luna Castro, Budget and Policy Analyst, CPPP International Budget Project, Third Annual Conference, India 6 November Lydia Street, Austin, Texas,

1 Contents Background: Texas’ Assistance for the Poor, 1995 Federal Welfare Reform Texas After Welfare Reform –Outcomes at State Level –Outcomes at Local Level Advocate Response Resources

2 1995: Assistance for Texas Poor

3 Typical welfare client was a 30-year old female with 2 children For cash assistance, eligibility was very strict (<20% of poverty) Most cycled off and on welfare; adult lacked education or job skills to find/keep a good job Who Was Receiving Assistance?

4 Federal Welfare Reform 1996: Congress passes Personal Responsibility and Work Opportunity Reconciliation Act Replaced state/federal funding (national government paid 50 to 78 percent of costs) with capped block grant called Temporary Assistance for Needy Families TANF grant to states would be provided at a fixed amount for next 6 years ( ); new grant for child care TANF funding for US > $99 billion, including incentives. Texas share is at least $3 billion (about $900 per poor person) for the six years of the grant.

5 Federal Reform (continued) State Responsibilities Maintaining historic levels of spending on cash assistance, welfare- related child care, training (TX=$251 million/year) Deciding which families are eligible & what amount of benefits they will receive; how work requirements and time limits are enforced Using federal funds legally More Flexibility for States Aiding needy families (children in own homes) Ending dependence on government by promoting job preparation, work, and marriage Preventing/reducing out- of-wedlock pregnancy Encouraging formation of 2-parent families

6 1999: Texas After Welfare Reform

7 Emphasis on reducing caseload (2/3 of whom were children) for cash assistance, not on reducing poverty or making people more self- sufficient Unintended immediate consequence: fewer families getting food or medical benefits With falling caseloads, surpluses of federal TANF accumulated; state used these dollars for some improvements, but also to replace state spending on other programs Texas’ Version of Reform

8 Outcomes at State Level Falling welfare caseloads made more federal money available; state officials decided to use most of it for child care subsidies rather than education or job training... …State also used federal money for less directly related services that have been long-neglected, instead of providing more state general revenue.Total supplantation thus far (through 2000) is about $300 million, or more than 10 percent of federal grant dollars.

9 Outcomes at Local Level Where the Poor Live vs. Where Federal TANF is Spent

10 What Advocates Have Done Legislative/policy briefings and testimony html/PP95.html Work with local-level social services organizations Work with national groups and federal agencies Talked to the media Work with state and local government agencies

11 Fiscal Analysis Resources (Census Bureau - comparisons of state and local government finances; Federal Funds Reports by county and other geographical subareas; demographic and economic data) (U.S. Department of Health and Human Services, Administration for Children and Families, Office of Family Assistance; TANF spending by states) (Center on Budget and Policy Priorities) (Legislative Budget Board; budget instructions; budget overviews; appropriations act) (Comptroller - state spending and revenue information, including county-level spending data)