Cut off: Arizona to enforce nation's toughest limit on cash assistance

A sign announcing the acceptence of electronic Benefit Transfer cards is seen at the Denios Farmers market in Roseville, Calif., (AP Photo/Rich Pedroncelli) (AP2010)

As Congress works to reauthorize the Temporary Assistance for Needy Families program ahead of its 20th anniversary in July 2016, some families in the Southwest will see cash from the program dry up that very same month.

Arizona is enforcing the shortest limit to temporary cash welfare in the nation– capping families to only one year of benefits.

The state’s Republican-led legislature voted for the new timeline in May. The move will cut assistance to nearly 1,700 families when it goes into effect next July.

TANF’s $16.5 billion annual block grant was created as part of the federal Personal Responsibility and Work Opportunity Reconciliation Act of 1996. Designed to “help needy families achieve self-sufficiency,” the program provides cash assistance to low-income families with children and requires that the parents must be enrolled in a jobs program. According to the program’s caseload data, nearly 1.5 million families received TANF aid last year.

Though the federal government allows recipients to receive benefits for as long as 60 months, states are permitted to impose shorter limits. Thirteen states keep the limit at 2 years or less according to the Center on Budget and Policy Priorities (CBPP), a nonpartisan research and policy think tank.

Arizona has been cutting back on the program gradually for years. In 2010, it reduced its limit to three years. In 2011, it went to two years, cutting benefits to 3,500 families. Families with designated hardships like homelessness or disability that prevent them from becoming self-sufficient will not face the state’s one-year limit.

The latest cut “will allow Arizona to move closer to a structurally balanced budget” as the state faces a $1 billion deficit for the 2016 fiscal year, said Tasya Peterson of the Arizona Department of Economic Security.

With an average monthly benefit of $165, Peterson estimates the reduction in assistance will save nearly $4 million.

The structure of the federal TANF block grant allows states to distribute the funds to other uses- like child welfare and school readiness.

The money Arizona saves will be rerouted to the state’s Department of Child Safety, which faced huge criticism from the Arizona Auditor General's Office for “gross inadequacies” in September. Arizona Governor Doug Ducey fired the former head of that department. His office insists the money received from the cut to TANF will help the department do a better job of protecting abused and neglected children.

"The bipartisan, balanced budget passed by the Legislature and signed by the governor protects Arizona's most vulnerable, while avoiding a tax increase," said Ducey’s spokesman Daniel Scarpinato in a statement.

But Cynthia Zwick of the non-profit Arizona Community Action Association says this cut will hit poor Arizona families hard.

“Twelve months may work for some, but likely won’t work for many.  It also assumes that there is a reliable and effective jobs program in the state that is helping prepare and place families in living wage jobs.  In Arizona 26% of our jobs are low wage, meaning families in these jobs still can’t make ends meet,” said Zwick.

Analysts with the Center of Budget and Policy Priorities say TANF still has a long way to go.

“TANF is often the only source of support for participating families and, without it, they would have no cash income to meet their basic needs.  Yet, this critical safety net program supports fewer families — and its benefits are worth less — than ever before,” said CBPP Policy Analyst Ife Floyd in a report.

But in a 2015 report, Robert Doar of the policy think-tank American Enterprise Institute insists TANF is a policy success.

“In the checkered history of US social policy, TANF is a bright spot: Few programs have generated such strong gains in poverty reduction and employment… however, the program also has room for improvement—be it by preventing states from playing numbers games or by incentivizing a sharper focus on employment and job retention,” said Doar.

And in their most recent report to Congress in 2012, officials with the U.S. Office of Family Assistance said states’ proposed timelines are enough to help people get back on their feet. The office states “40 percent of TANF families have received assistance for 12 months or less among those that are subject to the federal five-year time limit.”