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VOL. 44 | NO. 1 | Friday, January 3, 2020

Legislators have plenty of ideas for $700M in unused funds

By Kathy Carlson

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If you ask a Tennessee lawmaker an open-ended question about priorities for 2020, the subject might immediately go to what to do with the TANF funds.

Some might say the lawmaker has 700 million reasons to be concerned since the state could draw on more than $700 million in unspent federal matching funds to support programs for needy families.

TANF stands for Temporary Assistance for Needy Families, and each year the state receives a federal block grant of about $190 million to support the program. The state spent $71.1 million of that in the 2019 fiscal year, the Beacon Center, a conservative think tank in Nashville, reported last fall.

“The unused portion of the block grant is placed in a reserve fund. As of September 2019, the reserve balance was $732.7 million,” according to the Beacon Center’s report.

That got the attention of almost everyone in state government.

“That money can go toward workforce development, job training, child care, transportation, drug use prevention,” Rep. Bo Mitchell, D-Nashville says. “That’s how we fund social services and break the cycle” of poverty.

New House Speaker Cameron Sexton, R-Crossville, mentions TANF funds immediately when asked about legislative priorities.

The state needs to maintain fiscal responsibility and think through exactly how it will use the money, tailoring its use to address real needs, he says.

Rep. Robin Smith, R-Hixson, took up the theme of fiscal responsibility. One of her legislative priorities is to see to it that TANF funds help qualified recipients gain employment and self-reliance.

But many questions remain, as evident in a December meeting of the Joint TANF Working Group, a seven-person group appointed by Gov. Bill Lee.

Members are Rep. Bryan Terry, a Murfreesboro Republican, physician and chairman of the group; Sen. Bo Watson, R-Hixson, a physical therapist; Sen. Steven Dickerson, R-Nashville, a physician; Smith, who holds a degree in nursing; Sen. Raumesh Akbari, D-Memphis, an attorney; Rep. Harold Love, D-Nashville, a pastor; and Rep. David Hawk, R-Greeneville, a businessman.

The state comptroller’s office is advising the working group on “an appropriate level of reserves for Tennessee’s TANF program.”

The working group asked the comptroller’s office for assistance in November, and staff from the office spoke with the working group in a December meeting.

The staffers reported they were working with the state Department of Human Services and the federal government to “confirm the amount of federal TANF funding Tennessee has spent over the past decade.” Once those numbers are confirmed, the comptroller’s office will help the legislature set a target amount to be kept in reserve.

Ultimately, the decision on how much in TANF funds to keep in reserve “will depend on the legislature’s vision for the TANF program and whether the state chooses to expand TANF-funded services,” Comptroller Justin Wilson and Deputy Comptroller Jason Mumpower wrote in a Dec. 17 letter to the working group.

At the December meeting, the Comptroller’s office staff took pains to mention that what has been called the “TANF reserve” isn’t a reserve “in the usual sense of the word.

“…Unlike the Rainy Day Fund, TennCare Reserve, or the reserves of other state agencies, this TANF funding is not held in the state’s bank accounts or invested in short-term securities to earn interest. Instead, this reserve is simply the amount of federal funding that Tennessee was awarded, but has not yet drawn down from the federal government,” the Comptroller’s letter states and staffers reported at the meeting.

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