President- elect Joe Biden has called for an additional $1 billion for states to provide funding for the Temporary Assistance to Needy Families (TANF).
The boost is especially important in Nevada, which receives the least amount of federal TANF funding per child in the nation at $63, according to a data analysis by Joshua McCabe, a senior fellow at the Niskanen Center.
“I was actually surprised when I ran the numbers as well,” said McCabe via email.
McCabe’s analysis was presented last week during a virtual Brookings Institution panel titled “How can Congress best help state and local governments?”
Low federal funding for Nevada can be traced back to 1996, when the TANF block grant was created as a replacement for the Aid to Families with Dependent Children (AFDC) program, freezing the amount of funding each state received based on the old AFDC formula.
Unlike some other states, Nevada did not invest heavily in the AFDC program at the time, partially due to lower than average child poverty rates.
After TANF replaced AFDC, Nevada’s share amounted to $43.8 million, however because the block grant does not adjust for inflation it has lost value over time. Nevada has seen the sharpest drop in real TANF funding per child among states since 1996, falling by 63.5 percent due to inflation, said McCabe.
Nevada’s rapid population growth has likewise contributed to the decrease in funds per child. Nevada now has the same amount of funds for a much larger potential target population, those under 18 years of age.
For example, Vermont’s population under 18 decreased 25 percent since 1996, while Nevada’s increased by 65 percent. Nevada has seen the greatest increase in population under 18 since 1996 nationally, an increase of 65.3 percent, said McCabe.
The pandemic has led to increased TANF caseloads, generated higher costs for many TANF recipients — from higher utility costs to the need for internet access for remote schooling — and longer periods of joblessness given high unemployment.
In other words, a combination of a low starting point in federal funding, inflation, and lots of new children has left Nevada with less federal TANF funding than any other state.
The best-funded state, New York, received $604 per child in 2019, nearly 10 times the $63 per child in TANF funding in Nevada.
“This is extremely regressive. It exacerbates income and racial inequality,” said McCabe.
The Children’s Advocacy Alliance, a nonprofit organization in Nevada focused on child welfare, has advocated for an increase in TANF funding both on the federal and state level.
“Until they change the funding formula and don’t base it on what we were paying before AFDC then we’ll always have that low per-child rate,” said Sandra Owens, the Economic Well Being Director of the Children’s Advocacy Alliance.
Cash assistance is an important aspect of child welfare for low-income parents and families, Owens said. While a family may receive subsidized healthcare they may not have enough income to afford copays of medication, preventing parents from visiting a doctor.
“There are still expenses like transportation to and from doctors appointments, and when you don’t have the cash to do those things, you don’t go,” Owens said.
Those lapses in assistance that cash can cover have long-term ramifications on adult sufficiency and lifetime earning that affect health and education.
“Low federal child paying TANF rates have long-term impacts for all kids, especially kids in Nevada because of our state tax structure, or lack thereof, and because of our reliance on the hospitality industry which has been hit hardest of any industry,” Owens said.
Owens said Biden’s call for an additional $1 billion in TANF funding for states would be a great start if they were distributed equitably to states with historically low funding, like Nevada. She argues that TANF would be a good way of distributing funds to low-income families most in need more efficiently.
“People know the name. People trust TANF, and it has word of mouth even for people who aren’t news junkies,” Owens said. “We already have the qualification system to add money to that fund so families can get more.”
There has been some congressional interest in addressing TANF funding inequities in the past. From 1998 to 2011, supplemental grants were made to 17 states, all in the South and West, including Nevada, based on either low grant amounts per poor person or high rates of population growth. However, funding for these grants expired at the end of June 2011 and has not been reauthorized by Congress since, according to a report by the Congressional Research Service.
Economists and legislators have argued robust relief packages will be needed to stabilize the country’s economy after months of COVID-induced decline.
In 2019, Nevada spent about $124 million in federal and state funds under the TANF program. It spent 27 percent of these funds on basic assistance, generally as cash assistance to help poor families with children meet basic needs like food and shelter.
States typically have been spending smaller percentages of TANF money on basic assistance, according to a report released last week by the Center for Budget and Policy Priorities (CBPP). On average, only 21 percent of TANF money nationally is spent on basic assistance, down from 68 families when TANF was created.
Nevada spending on child care was slightly above the national average, 18 percent compared to 16 percent nationally.
Nevada’s spending in other “core areas” of the TANF program, however, did not fare as favorably — 4 percent of TANF funding in Nevada was spent on helping low income families find work, well below the national average of 10 percent.