Assessing State Social Service Spending Under Welfare Reform

By Donald J. Boyd, Patricia L. Billen, and Richard P. Nathan

Welfare reform gave states new flexibility to decide how to deliver and finance services for low income families, while changing the fiscal incentives for state governments and altering federal-state fiscal relationships. These changes created new challenges for the federal government and others interested in whether and to what extent states have met the goals of welfare reform. This paper examines accountability challenges created by the new fiscal environment, drawing insights from spending data collected in 17 states. It concludes that states responses to welfare reform have been diverse and broad, and it is not possible to assess whether states are meeting program goals simply by examining Temporary Assistance to Needy Families and associated state funding streams, or by examining individual programs they fund. To gain a clearer picture of how states are meeting the goals of welfare reform, policymakers and researchers periodically will need to monitor and examine the broader fiscal context of TANF and broad measures of social service spending.