April 17, 2000. An update from City Limits Weekly (No. 224), New York’s urban affairs news magazine. Reported by Annia Ciezadlo.

Add a new one to the list of behavioral changes wrought by welfare reform: the TANF land grab. Since the old welfare program was replaced with the more flexible Temporary Assistance to Needy Families block grant in 1997, and since declining welfare rolls have left a hefty surplus of unspent funds, states have been using this cash much more creatively-including using the money to pay for programs traditionally funded by state government rather than putting it in welfare recipients’ pockets.

According to an analysis from the budget watchdog group Fiscal Policy Institute, New York State plans to use $591 million of its extra TANF cash next year to fund programs formerly paid for through state tax revenues or other sources. (The state’s total TANF surplus is about $1.6 billion.)

“It’s a money-laundering scheme,” said Michael Kink, legislative counsel for the housing and social services provider Housing Works. It’s a zero-sum game: Although the extra TANF cash does get slated for programs for poor and low-income New Yorkers, lawmakers spirit away the state money it supplants, choosing instead to give out generous tax breaks. Poor people don’t reap the benefits of this whopping surplus.

The money pays for everything from big tax breaks for the working class ($174 million) to a tiny dollop for studies of welfare reform (half a million). One project that welfare advocates welcome is a $3 million Transitional Opportunities program to help people in the process of leaving welfare.

TANF will also underwrite almost $18 million worth of pregnancy prevention programs, as well as a controversial $4 million school attendance program that docks welfare recipients with truant children. That program, called Learnfare, was originally supposed to sunset this summer.

Most controversial is a plan to use up to $109 million for “recruitment and retention” of human services workers: specifically, wage subsidies for health care aides, hospital workers, foster care and mental health workers.

The state’s Catholic Conference circulated a letter last week slamming the proposal as a misuse of TANF funds. “If needy families need money or need food, that’s what the TANF money should be used for,” said the Catholic Conference’s Rick Hinshaw.

Ultimately, advocates say that although many of the TANF-funded programs provide sorely needed help for poor people, there may simply be too many of them. “The bottom line for TANF is that lots of constituencies get their own little favorite programs,” said Karen Schimke of the State Communities Aid Association. “Then, the state agencies have to administer a whole slew of little bitty programs, and everybody wonders why it’s so difficult to get money out. It’s too sliced up.”