About two years ago, I wrote a post about a ProPublica article that was doing numbers in Mormon circles. In short, ProPublica reported that the state of Utah was counting volunteer hours and humanitarian aid provided by the LDS Church and its members toward its Temporary Assistance for Needy Families numbers. TANF was enacted in the 1990s to replace the extant welfare program. It basically took federal oversight out of welfare, instead allocating a block grant to states to do with (largely) as they chose. To get the block grant, a state had to meet certain expenditure targets of its own. Utah didn’t do that (the article reported that it had probably underspent by $75 million over 10 years), but maintained its full federal grant by counting some hours and dollars provided by the church.
A couple weeks ago, ProPublica published a follow-up (and I’ll note that it misunderstood then what Utah was doing and it continues to misunderstand, but that was my previous post). The Biden administration is proposing a rule change that would tamp down on both what Utah was doing and other problematic behavior by other states, some of which were spending TANF funds on things that didn’t support poor families and keep them together.
So would the rule change be good or bad for Utah’s poor? Honestly, it depends. It depends entirely on how the Utah legislature responds to the change.
The numbers I’ve seen are a couple years old, but let’s go with them: Utah needs to spend $25 million and, if it does, it gets $75 million from the federal government. But if it underspent by $75 million over 10 years, that means it’s been counting about $7.5 million of LDS service and aid toward its minimum spending. So it’s been spending about $17.5 million.
Now TANF isn’t my area of expertise, but if I’m reading the statute correctly, the penalty on a state that doesn’t meet its minimum level of spending is to reduce the next year’s federal block grant by the amount of underspending. So let’s game this out at two extremes, in both cases assuming that LDS spending and service remains constant.
If Utah increases its spending to the minimum required, Utah’s poor benefit. Previously, Utah spent $17.5 million and the federal government contributed $75 million. That means a total TANF spending in the state of $92.5 million. But if the Utah legislature hits its minimum spending amount, the total spending will by $100 million. That’s an extra $7.5 million to help address the effects of poverty. That is real money that can do real good.
But if Utah keeps its spending steady, then it loses $7.5 million of the federal block grant. Instead of the $92.5 million the state currently gets to spend, it will have $85 million; Utah’s TANF recipients will lose $7.5 million that is currently available to them.
Of course, there are intermediate possibilities. Utah could increase its spending by more than nothing, but less than $7.5 million, reducing the amount by which the matching grant falls. But that, like fully spending the minimum amount, requires some legislative (and probably executive) action. Assuming the rule changes go into effect, maintaining the status quo means Utah’s poor suffer. And so it’s critical that the legislature act, to help the poor and receive the maximum federal grant available.