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Decisions Ahead for Virginia’s Temporary Assistance to Needy Families (TANF) Program

According to a recent report by the Department of Social Services, Virginia’s Temporary Assistance to Needy Families (TANF) block grant is projected to be fully obligated in FY 2025, with current funding obligations resulting in a deficit.  In addition to the cash assistance paid to families in poverty, Virginia has used discretionary TANF funding to fund a variety of programs, such as domestic violence services, Community Action Agencies, and home visiting.  These programs may need to seek non-TANF funding sources in the near future and VACo members may wish to discuss this issue with any affected nonprofits in their communities.

Virginia’s annual TANF allocation is $158 million, and funds may be used to further four purposes, as outlined in federal law.  In addition to providing cash assistance to low-income families, states may use funds to promote job preparation, work, and marriage; prevent and reduce the incidence of out-of-wedlock pregnancies; and encourage the formation and maintenance of two-parent families.  States are permitted to carry over unspent funds; because Virginia’s cash assistance levels were only increased once in the period between 1985 and 2015, Virginia accumulated a reserve, a portion of which the General Assembly has used to support expanded TANF programming provided through nonprofits and other entities.

Since 2016, increases to TANF payments have occurred on a more regular basis.  Between these increases and growing expenditures in discretionary expanded TANF programming, Virginia is expected to fully obligate the TANF block grant in FY 2025, and current funding obligations would result in an estimated deficit of approximately $56.9 million in FY 2025.

Language in the 2022 Appropriation Act directed the Department of Social Services to create a workgroup to study TANF block grant spending and submit a report with “options and recommendations for changes necessary to ensure annual structural balance in state TANF spending.”  An interim report was issued in January 2023.

The working group’s interim report included the following recommendations:

  • The General Assembly should consider utilizing the TANF block grant to mitigate the impact low-income households will experience when the federal government declares an end to the public health emergency (PHE).
  • In order to ensure structural balance, the General Assembly should focus on reductions in the Expanded Programming Category or continuing to support those programs with state general funds.
  • When evaluating the Expanded Programming Category, the General Assembly should consider the following:
    • whether each organization funded provides services that further the statutory purpose of the TANF program and whether the organization has submitted data to demonstrate their performance.
    • whether the organization funded receives other state or federal funding.
    • whether funding needs to be adjusted or eliminated based on the organization’s expenditures versus its current allocation in prior fiscal year(s).

The interim report (which includes a summary of the programs funded through in the expanded TANF programming category) may be found at  VACo’s Health and Human Resources Steering Committee had a preliminary discussion of the issue at its August meeting and will be receiving an update at its November meeting.  VACo will share any additional information with members as it is received.

VACo Contact:  Katie Boyle

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