Millions of dollars have been raided from the children's piggybank, creating a looming crisis for future state budgets while slighting children's basic needs.
The carry-over was accumulated from remainders of annual TANF block grants left unused in past years. In the current state budget, over $7 million of this fund is being spent for uses other than the children depending on TANF.
The carry-over is down from its one-time high of $23.5 million to only about $8.2 million. The next state budget proposal is expected to use up almost all of that sum.
Rainy Day Fund
Once considered the "Rainy Day Fund for TANF," a set-aside available to cover caseload fluctuations and family allowance adjustments to compensate for inflation, the TANF carry-over has now been tapped for uses that do not directly benefit the children qualifying for TANF assistance. When the carry-over is used up, no federal replacement will be forthcoming.
$7 million hole
The practice of looting TANF endangers more than the well-being of TANF kids. The state is also setting itself up for a future budget crisis in ongoing non-TANF programs by funding them now
with the dwindling TANF carry-over money. Example: From the information made available, it appears a significant portion of essential child protection services now comes from TANF funds, including TANF carry-overfunds.
The most outrageous example: Over $1 million from TANF was diverted to services for the elderly. The state now predicts a shortfall of over $7 million in the state budget once the carry-over is used up.
Risky state policy
There is a credible risk that federal decisionmakers will cut South Dakota's TANF block grant, when they take note of how much has been diverted to replace state funds.
The grievous irony
While millions of the TANF money was diverted, the monthly allowances for the children actually who depend on TANF received no inflation adjustment this year. Everyone else received inflation adjustments, but not the state's poorest children. When costs of living go up, those with the least are hit the hardest. Yet the children's
federal TANF carryover funds were completely available with no additional state match required. A 3 percent cost-of-living adjustment would have used $400,000 of the carryover.
A wiser course for the next budget might be to face ongoing budget requirements now, and preserve a $7 to $8 million TANF rainy day fund for direct benefit to TANF children. Good uses would be (1) cost-of-living adjustments, (2) housing assistance for the most financially desperate group of families paying full housing costs from inadequate TANF payments, and (3) a reserve fund that can respond to fluctuations in the
All studies of children show the individual and societal cost of extreme poverty. The highest vulnerability is in the early years, where TANF children are more likely to be. They are in destitute situations.
They deserve more concern in the budgeting process. The most important purpose of TANF is to meet basic needs of vulnerable children.
Cathy C. Brechtelsbauer, an advocate for children, lives at 2900 Poplar Drive, Sioux Falls, SD 57105. Her phone number is (605) 335-6222.