Welfare Dollars No Longer an Increasing Source of Child Care Funding

Publication Date: August 2003

Publisher: Center for Law and Social Policy

Author(s): Brooke Richie; Jennifer Mezey

Research Area: Social conditions

Type: Report

Coverage: United States

Abstract:

Between FY 1997 and FY 2000, federal and state spending on child care more than doubled, and much of the increase was due to Temporary Assistance for Needy Families (TANF) funds. After growing steadily from FY 1997 through FY 2000, state use of TANF for child care declined in FY 2001.

New data from the U.S. Department of Health and Human Services indicate that state use of TANF for child care essentially remained flat from FY 2001 through FY 2002. Furthermore, TANF might soon become a declining source of child care funding, in light of dwindling or exhausted reserves of prior year TANF funds and increases in cash assistance caseloads in many states. Analyses of FY 2003 and proposed FY 2004 state spending decisions show that states are already cutting their child care programs, including TANF-funded child care.

This analysis concludes that states need additional dedicated child care funding to prevent low-income families from losing their child care assistance due to state budget crises, declining TANF availability, and potentially costly and underfunded welfare work requirements.

A PDF of the appendices, which provide detailed state-by-state data related to TANF spending on child care is a supplementary file.