Update: This story includes comments from Governor Mike DeWine’s Office, provided Wednesday morning.
A new report showed Ohio was one of many states in the nation choosing more flexible funding for their child care and assistance programs, rather than child care funding with federally-regulated rules on health and safety.
A recent Bipartisan Policy Center study on Temporary Assistance for Needy Families (TANF) funding and Child Care Development Funds (CCDF) showed that more and more states are moving away from CCDF monies, in favor of making their own regulations for child care and cash assistance.
In fiscal year 2019, states nationwide spent more than $5 billion on child care services, according to the study, and they receive allocations from the two different federal funding sources. Nationally, $8.19 billion was provided to states in CCDF money “to help them improve the quality and affordability of child care for low-income working parents,” according to the BPC.
The biggest other source of public child care funding comes from TANF, a block grant given to states for low-income parents and children, which amounts to $16.5 billion annually, distributed based on a federal formula. The TANF program was meant to “augment” CCDF funding, according to the BPC.
States can transfer up to 30% of their TANF funds to add to their CCDF monies if they choose. The BPC report says this should be happening more, to make sure the money is used on programs that fall under federal regulations, including minimum health, safety, licensing and monitoring rules.
The BPC said a policy allowing direct use of TANF funding “also leaves a large portion of children receiving TANF child care assistance to be cared for in programs that may be of lower quality, potentially putting both their health and safety at risk.”
Ohio favors spending the TANF funding directly on child care programs because it allows for more flexible usage, according to the study, despite the fact that it then creates “multiple sets of child care program rules, regulations and requirements,” the policy center study stated.
A spokesperson for Governor Mike DeWine said Wednesday the state maintains health and safety standards established under CCDF, but also under the state’s rating system for publicly funded child care, Step Up to Quality.
According to the study, the state was one of 11 last year that spent 30% or more of their total TANF funding on child care assistance, accounting for about $223 million in TANF direct funding.
The state transfers 10% of their TANF funding to the Title XX social services program, according to DeWine’s office. The federal social services program has broad usage and gives states discretion on things such as eligibility requirements to receive the funds.
The state was one of 24 that did not transfer any of their TANF funding to CCDF in 2019.
TANF funds do not account for inflation, which has caused the value of the program to drop by 40% since its inception in the late 1990s, the study stated.
Ohio has two county-administered, state-supervised programs: Ohio Works First and Prevention, Retention and Contingency (PRC), along with other programs using TANF-allocated monies.
Ohio Works First gives assistance “by furnishing parents or specified relatives with work, training and other support services they need in order to attain permanent self-sufficiency while meeting the family’s ongoing basic needs,” according to the Ohio Department of Job and Family Services.
The payments are based on family size and income, and in 2019, the maximum Ohio Works First monthly payment for a family of three was $497.
A state TANF plan from 2001, shortly after TANF was enacted federally, set the payment standard for an “assistance group” of three at $362 per month.
The state program also requires applicants to sign a “self-sufficiency contract” to get the benefits, and they have to participate in “work activities,” which can include on-the-job training, community service and education “directly related to employment.”
The PRC is tasked with providing those short-term benefits not covered under the federal definition of “assistance,” but still focused on TANF-related services, specifically families dealing with alcohol or drug dependence.
“The goal is always to provide the appropriate mix of cash and non-cash services that will enable the family to achieve self-sufficiency,” ODJFS stated in its explanation of the program.
Advocates have said Ohio needs to do more to sustain the TANF program, while also making sure the monies are used properly.
Addressing the state operating budget currently under consideration by the Ohio legislature, the non-partisan thinktank The Center for Community Solutions called on the state to prioritize TANF spending, while avoiding allowing spending on the program to become too broad.
“While (spending flexibility) can allow, and has allowed, for innovative programming to be funded, it also means that the program can be pulled in too many different directions when TANF dollars are used in programs that broadly fit within allowable spending categories,” CCS wrote in a recent blog post.
In the most recent stimulus package, $1 billion in pandemic emergency assistance was allocated to states based on how many children are receiving basic assistance, through programs such as TANF.