Better Information Needed to Understand Trends in States Uses of the TANF Block Grant

The Government Accountability Organization (GAO) collected state spending date and conducted site visits in California, Colorado, Louisiana, Maryland, Michigan, New York, Oregon, Texas, and Wisconsin. These states represent about half of federal spending on the Temporary Aid to Needy Families (TANF) program in 2004.

In this follow-up study of state TANF spending (prior TANF spending trend studies were released in 1998 and 2001) GAO sought to determine state TANF fund spending trends. This study is focused on spending for working-age adults and children; spending on the elderly, long-term care, and institutional care is excluded. The spending data is classified into five areas: cash assistance, employment services and training, work and other supports, aid for the at-risk, and health care. Only programs in which states were able to make key budget decisions were evaluated.

The GAO found that according to data provided by the states, spending on low-income programs increased over the ten years covered by the three trend studies. Health care spending accelerated more than non-health spending. In eight of the nine states in this study health care accounted for at least 45% of welfare-related spending in 2004. Total spending for welfare-related services also increased during the study period. Since 1995, median non-health spending increased by 17%. This is in contrast to the 61% median growth rate for health spending. However, GAO noted that data are not routinely available about the extent to which eligible individuals targeted by TANF programs are served, therefore it was not possible to draw conclusions about how service needs are being met.