Poverty - Economic Well-being

The “Why’s of Maryland’s TANF Program

State Spending on Cash Assistance and Child Care Services Decline

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In place of state dollars, Maryland is increasingly relying on federal money to finance its public welfare safety net. The problem with this pattern of spending is that should the availability of federal funds decrease, fiscally, Maryland may not be in a position to replace the money lost using state general funds.

Two programs offering vital work supports for families in poverty that have suffered recent cuts in state funding are Maryland’s Temporary Cash Assistance Program (TCA) and the Purchase of Care Program (POC).

Cuts in Maryland’s cash assistance program have occurred through a failure to maintain the grant level at statutory standards. The TCA grant for a family of three (the most common family size for TCA recipients in Maryland) is $490, which is less than the statutory requirement of 61 percent of the Minimum Living Level—despite large caseload declines from 1997 to 2005.

Similar to TCA, the POC program has suffered significant budget cuts in the past two fiscal years. This program provides childcare subsidies to qualifying families. Between FY 2004-5, $45.5 million in state funds has been cut out of the program.

It is necessary to examine Maryland’s reliance on federal money to finance assistance services in light of (1) any new requirements resulting from TANF’s Reauthorization and (2) likely cuts in federal spending for domestic programs prompted by the Iraq war, increasing deficits, and rebuilding in the Gulf region.

Any or all of these factors could decrease the availability of federal funds—thus forcing Maryland to either cut services to poor families or infuse more state money.

Do these policy decisions reflect your values and priorities? MBPTI

Related Reports

• TANF Policy Changes (updated January 2006)
• Work Supports and the Safety Net
• Testimony for Senate Bill 847 -- Additional Funding for Cash Assistance (2005)