Issue Brief 11-04, January 18, 2011

TANF Extension Reduces Funding

for Supplemental Grants in FY 2011
Trinity Tomsic • 202-624-8577 • ttomsic@ffis.org

On December 8, 2010, the president signed the Claims Resolution Act of

Summary 2010 (P.L. 111-291), which included an extension of the Temporary
Assistance for Needy Families (TANF) block grant and related programs
through federal fiscal year (FY) 2011 (see Issue Brief 10-46 for more
information). Unlike most programs covered by the extension, TANF
supplemental funds were not funded at FY 2010 levels and were extended
only until June 30, 2011, instead of September 30, 2011.
Specifically, P.L. 111-291 limited funding for TANF supplemental grants to
$490 million minus the amount obligated for the TANF Contingency Fund
from October 1, 2010 to December 8, 2010. The Administration for Children
and Families (ACF) obligated $334 million for the TANF Contingency Fund
during that period, leaving a FY 2011 shortfall for TANF supplemental grants
compared to previous years.

TANF block grant allocations are based on states’ historical spending levels
Background (FYs 1992-1995) under the previous Aid to Families with Dependent Children
(AFDC) program. In addition to block grant funds, certain states receive
supplemental funding. This additional funding is to offset the disadvantage
of using historical spending data for those states that had high rates of
population growth and/or historically low welfare grants relative to poverty.
Seventeen states, all southern and western, receive supplemental grants.
In the past, TANF supplemental grants have expired prior to the TANF block
grant for budgetary reasons. However, these grants have always been
extended by Congress. For example, the 1996 welfare reform law (P.L. 104-
193) funded supplemental grants through FY 2001, not through FY 2002 as it
did with other programs. Similarly, the Deficit Reduction Act of 2005 (P.L.
109-171) extended TANF supplemental grants through FY 2008, while other
TANF programs were funded through FY 2010.

For the beginning of FY 2011, TANF supplemental grants were funded at $56
State Impact million through December 3, 2010 (equivalent to FY 2010 levels), as part of
the first Continuing Resolution (P.L. 111-242). From December 4, 2010 to
June 30, 2011, TANF supplemental funds will receive $156 million ($490
million minus TANF contingency fund obligations of $334 million). As shown
on the next table, the overall FY 2011 funding level will be $212 million.

FFIS Issue Brief 11-04

 When compared to FY 2010 levels, this could result in a $108 million (34%)
shortfall, absent congressional action to extend the program beyond June
30, 2011.

Estimated FY 2011 Shortfall for TANF Supplemental Grants

(dollars in thousands)

FY 2010 Estimated FY 2011 Funding

State Funding (through 6/30/10) Difference
Alabama $11,093 $7,362 -$3,731
Alaska 6,888 4,571 -2,317
Arizona 23,925 15,878 -8,047
Arkansas 6,218 4,127 -2,091
Colorado 13,570 9,006 -4,564
Florida 60,406 40,088 -20,318
Georgia 37,283 24,743 -12,540
Idaho 3,498 2,321 -1,177
Louisiana 17,027 11,300 -5,727
Mississippi 9,036 5,997 -3,039
Montana 1,133 752 -381
Nevada 3,734 2,478 -1,256
New Mexico 6,553 4,349 -2,204
North Carolina 36,110 23,964 -12,146
Tennessee 21,565 14,311 -7,254
Texas 52,708 34,979 -17,729
Utah 8,704 5,776 -2,928
Total $319,450 $212,000 -$107,450
Copyright © 2011 FFIS Federal Funds Information for States. All rights reserved.

States receive supplemental grants on a quarterly basis. Each quarter’s

allocation is typically $80 million. ACF awarded states $80 million in both the
first and second quarters of FY 2011. For the third quarter, ACF has $52
million remaining, $28 million less than the usual quarterly amount. ACF
does not have the authority to award funds for the fourth quarter of FY
2011.

At this point, it is unclear whether Congress will extend funding for TANF
Next Steps supplemental grants through the fourth quarter of FY 2011. Moreover, if an
extension does happen, it is uncertain whether it will include additional
funding to offset the shortfall that developed during the first three quarters.
Copyright © 2011 FFIS Federal Funds Information for States. All rights reserved.

FFIS Issue Brief 11-04 Page 2