More than $125 million in federal funds meant to help Nebraska’s neediest families sits in a cash reserve fund, in part unused because more than 90% of families who applied for the cash payments were denied.
Each year, Nebraska’s Department of Health and Human Services gets about $57 million in federal Temporary Assistance for Needy Families grant funding from the federal government to be spent on assistance, about 30% of which is typically distributed to low-income families in cash payments.
But for most of the past five years, Nebraska has paid out fewer dollars in cash payments to families, dropping from $19 million in 2018 to $11.3 million in 2022 before a slight increase, to $13.3 million, in the 2023 fiscal year.
That decline is paralleled by a trend in the number of households that have qualified for the benefits. In early 2020, more than 5,500 Nebraska families were eligible for payments. As of August, 3,009 families qualified for assistance.
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That drop has, in part, occurred because eligibility requirements haven’t kept pace with a pair of primary economic factors in the state, low unemployment and increases to Nebraska’s minimum wage, which increased from $9 to $10.50 in January and will jump again to $12 next year.
Specifically, as of July, a family of four would have to bring home less than $1,163 per month to qualify for $640 per month in cash aid, an income benchmark that is unreasonably low.
Last month, Katie Nungesser, a policy coordinator for the Omaha-based Voices for Children in Nebraska, told the Legislature’s Appropriations Committee that the number of families participating in the program has dropped by nearly 50% nationally over the past two decades.
But, the vast majority of states have found ways to more fully distribute their allotments.
Nebraska, as State Auditor Mike Foley found, is one of only four states that has more funds in its rainy day fund than the federal government allocates the state each year. The state’s reserve fund amounts to more than 200% of its annual allotment.
Regionally, Missouri spends virtually all of the $216 million granted to it for child welfare purposes each year, touting a cash reserve of $0. Iowa, meanwhile, has $27 million in its “rainy day fund.”
Colorado has $100 million in its reserve. But it has 4 million more residents than the Cornhusker State and is allocated $136 million for child welfare each year.
Those figures, Foley says, don’t reflect any wrongdoing by HHS. But they appear to reflect a pattern established in the Ricketts administration of delaying spending for and implementation of low-income assistance programs such as SNAP, WIC and Medicaid expansion.
HHS has a plan that it claims will begin spending more money each year than the state is allotted and will exhaust the fund as early as 2028. Foley, however, disagrees with that assessment, stating that the planned spending will continue to be below the federal allotment.
Regardless of exactly how much is spent, the amount in cash payments to low-income families needs to increase by altering the eligibility formula to raise the income limit and ease a very strict work requirement.
That will require legislative action on three bills already introduced by Lincoln Sen. Danielle Conrad, that, in order to get the families the federal money intended to help them, should be passed with no controversy early in next year’s legislative session.