N.C. One of Many States Struggling To Maintain Welfare Programs | Eastern North Carolina Now | North Carolina isn't the only state that plans to idle its Work First poverty program temporarily after October if the federal government shutdown continues. Other states also are moving in the same direction, officials say.

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    Publisher's note: The author of this post is Dan Way, who is an associate editor for the Carolina Journal, John Hood Publisher.

    Local media reports ignore other states prepared to end support

    RALEIGH  -  North Carolina isn't the only state that plans to idle its Work First poverty program temporarily after October if the federal government shutdown continues. Other states also are moving in the same direction, officials say.

    Some North Carolina media outlets have reported or suggested that North Carolina may be the only state that plans to end Work First  -  which is funded by the federal Temporary Assistance for Needy Families program  -  without ironclad assurance that it would be reimbursed if it used state funds for federal poverty programs. But many other states also plan to end TANF or other welfare programs unless the partial federal shutdown ends before Nov. 1.

    WRAL's Laura Leslie reported Monday, without citing a source or providing attribution, that "North Carolina is the only state in the country shuttering its program."

    And The News & Observer's Rob Christensen also suggested in a report on Monday that North Carolina's decision not to process new applications for Work First during the shutdown made it an outlier among states.

    These, however, are not accurate portrayals of the situation playing out across the country, according to state officials and others who watch state budgets closely.

    "Based on our research, we're probably the only [state] right now that has already made the decision to suspend, but there are many others that are talking about what's going to happen in two weeks or a week," said Julie Henry, a spokeswoman for the state's Department of Health and Human Services.

    "Depending on how long the shutdown lasts, more states may start" suspending TANF, said Kathryn Vesey White, fiscal policy analyst for the Washington, D.C.-based National Association of State Budget Officers.

    DHHS does not have sufficient contingency funds budgeted to maintain the services, Henry said. In large part that is because it receives less money than many states from the federal Temporary Assistance for Needy Families program that funds Work First.

    "Most of the families that currently are enrolled in Work First have gotten their benefit for the month of October," Henry said. November will be the cutoff unless the federal budget impasse ends before the end of the month.

    New TANF applications are still being encouraged and taken at county Department of Social Services offices, but are being stored and not processed until the federal funding is restored.

    "There are other states that have discussed it, and Arizona actually did suspend its welfare program for a period of days, then reinstated it," Henry said.

    "Michigan's director said the state has enough to fund it for about two weeks as of Oct. 1. New Hampshire talked about using funds from prior years, as of the beginning of October, but wasn't sure how long that would last," she said.

    Florida Gov. Rick Scott's chief of staff has ordered that no state money be used to offset federal programs that run out of cash due to the federal gridlock.

    Wyoming Department of Family Services officials have said they may have no TANF and Supplemental Nutrition Assistance Program, or food stamps, funding in November; Minnesota said SNAP funds will run out at the end of the month; and California has not decided whether it will use state money to plug gaps in social programs at the end of the month.

    Work First is the name of North Carolina's welfare program that provides temporary cash assistance and work training to recipients. It is among several programs funded by federal dollars from TANF.

    North Carolina's annual $350 million TANF block grant supports 20,709 people, 13,761 of them children living with a guardian or other relative who is taking care of them. The other 7,000 individuals are working toward employment or already employed and get this additional support through the Work First program.

    The TANF program enrolls about 4,100 new applicants per month, and roughly the same number moves off the rolls monthly.

    In a Sept. 30 advisory letter to states, U.S. Health and Human Services Acting Assistant Secretary for Children and Families George Sheldon said states using their own money to pay for the federal TANF program during the government shutdown might qualify for reimbursement "unless Congress specifies otherwise."

    In another section of the letter, he wrote: "Once there is legislation extending the funding, and provided Congress does not specify otherwise, a TANF expenditure could qualify either for federal reimbursement or to count as a maintenance-of-effort expenditure."

    Trinity Tomsic, deputy executive director for the Washington, D.C.-based Federal Funds Information for States, said the letter's reimbursement language was "a big kind of 'if' statement, and that's 'unless Congress specifies otherwise.'"

    There is no guarantee that when Congress finally reaches an agreement it would be retroactive to the shutdown period, and HHS doesn't have the authority to say, "We will definitely reimburse you," Tomsic said. "Different states are making different assumptions" about what that means and how to proceed.

    An Oct. 10 issues brief from NASBO underscored the trepidation North Carolina and other states are experiencing in using state funds to keep TANF in operation.

    "In past shutdowns, states have generally been reimbursed for program expenses covered with state monies, but ultimately the appropriations language passed by Congress will determine whether this will be the case this time," the brief said.

    "With limited resources and little budgetary flexibility, states have to decide whether to put their own money on the line without assurance of reimbursement. Even in cases where states do want to step in, their cash flow situation may prevent them from having sufficient funds," the brief said.

    "We're asking for very clear, definitive language so that we know if our outlay is going to be reimbursed. Otherwise we're putting the state in the precarious position of advancing funds that weren't budgeted for that program or service, and we have to take funds from somewhere else," Henry said.

    "Usually the guidance would tell us we have X dollars, this is how much money we have, but I don't think we've gotten anything that concretely assures us" the state would be reimbursed for any expenditure of state dollars to keep federal programs afloat during the shutdown, Henry said.

    The possibility that state expenditures used to support TANF during the shutdown could be used as credit towards annual maintenance of effort requirements is not a large incentive for North Carolina to use its own money.

    Unlike other states, in North Carolina the maintenance of effort process  -  local matching money spent to supplement federal program funds  -  occurs at the county level.

    "Counties are struggling with that right now," Henry said. "They're looking at what funding they have. There's maintenance of effort funds for TANF that might go to Work First, they might go to support child care subsidies. So they're trying to decide how do they use those funds."

    There are several reasons the federal shutdown has affected North Carolina's TANF program more than programs in other states.

    For example, North Carolina uses TANF money for a variety of programs besides Work First, including foster care, child welfare, and child care subsidies, so the money is spread over several areas. And when TANF was started in 1995, North Carolina was one of roughly 10 states whose funding was based on needs that existed at the time.

    "Our funding was less than other states, and so we got supplemental funding to augment the money we got in our TANF block grant," Henry said. "Supplemental funding from the federal government ended two years ago, so it left us with even less of a cushion for times like these."

    That is why some states could prolong their programs without federal money. Some states also have carryover, or reserve funds from year to year that they can use to insulate their TANF programs from the federal shutdown.

    "So whereas other states might have more carryover funds, we don't have that," she said. "We operate very close to the margin on TANF. We use all of our federal dollars."

    Lacking fiscal wiggle room, DHHS officials decided to prioritize TANF program funding based on health and safety needs.

    "When we talk about things such as child welfare and child protective services, when we look at our federal dollars, those are high priorities for us," Henry said. She added other services are mandatory under the funding.

    "When we looked at Work First and the number of people it served, that was one of the programs that unfortunately was identified as a program that we could not continue after October if the shutdown continued," Henry said.
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