Increasing TANF Assistance to New Jersey Families is Long Overdue

castro200x150These are prepared remarks, on A-30/S-1829, set to be delivered to the Senate Health, Human Services and Senior Citizens Committee, as well as the Assembly Appropriations Committee, this afternoon.

New Jersey Policy Perspective strongly supports A-30 because it begins to address one of the biggest problems facing our state, the alarming increase in extreme child poverty. This increase is well above the national average, and has continued even during the economic recovery. As you may be aware, we recently released a comprehensive report on this issue and the findings were startling. We found that the increase in extreme child poverty was largely a result of the state’s failure to support TANF (Temporary Assistance to Needy Children), which is the only basic assistance available for poor families.

The TANF cash benefit, which is $424 a month for a family of three, has not been increased in 29 years. Ronald Reagan was still president, and the Bangles’ “Walk Like an Egyptian” was the top hit of the day. Because it’s been so long since the benefit has been adjusted, its value has been cut in half due to inflation, and it has gone from 61% of the federal poverty level in 1981 to only 25% of the poverty level today.

Since eligibility is based on the TANF benefit, far fewer poor children are eligible for any assistance. Whereas in the past, most poor children received help, today over 80 percent do not received any assistance. Unless something is done soon, TANF will cease to be a viable safety net for children.

What makes this particularly disturbing is that this is occurring at the same time the state has been granting hundreds of millions of dollars in tax credits to some of the biggest corporations in the state in response to the state’s weak economy, even though that same economy is also hurting struggling families.

Giving all children a shot at success is not only the right moral choice, it’s a much better investment. The newest research shows that poverty costs New Jersey $13 billion each year in reduced productivity, increased crime and poorer health outcomes.

We either pay now or pay much more later.

There is no question that the TANF benefit is woefully inadequate, even by the state’s own standards. Since 2003, the Department of Human Services has established a standard for decency that takes into account real needs of a family including the cost of housing. That standard is now $2700 for a family of three, seven times higher then the current TANF benefit level.

New Jersey also has fallen far behind many other states in the TANF benefit. It now has the lowest benefit by far in the northeast and the 10th lowest in the nation when the cost of housing is considered. We should all be embarrassed that the New Jersey TANF benefit fails to supports children as well as much poorer states like West Virginia and Kentucky.

The low grant level along with other restrictions in TANF has also made it unresponsive to real needs in our state. While there have been major increases in unemployment and the child poverty rate, the TANF enrollment rate has gone down substantially – exactly the opposite of what you would expect.

TANF’s decreasing eligibility levels also mean much less economic opportunity for the parents which is needed to lift them out of poverty. TANF offers education and training programs, as well as support services like child care and transportation, that promote economic independence. TANF also offers emergency assistance such as for housing which parents need on a temporary basis before they can resume employment. But most parents below the poverty level are not eligible for any of these supports because, like most poor children, they are not eligible for TANF. In effect we treat most poor families as if they do not exist.

The research shows that many families go in and out of poverty depending on their employment situation. The trick is to provide the supports that families need while they are working to prevent dependence and the temporary assistance they need when they lose their job or other income. Although it could be better, the state has made substantial improvements in supports for working families such as in increasing the state EITC and expanding Medicaid. However where the state has completely failed is helping the poorest families who are unemployed and have no income at all. A-30 begins to fill this real need and extend the ladder of opportunity to all New Jerseyans.

Thank you.

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