Ohio holds $1.14 billion in surplus welfare money; raises questions

Money intended to aid Ohio’s poor families through the Temporary Assistance for Needy Families program sits in a $1.14 billion surplus, leaving many human services officials questioning why so much unspent federal welfare money has accumulated and not been distributed.

More than half of the money – $599 million – is categorized as unobligated, indicating the state has no definite plans for spending the funds from the TANF program, the federal government’s welfare reform program that provides cash assistance, child care subsidies and disaster aid, among other services, for families with children under 18 years of age.

Ohio’s large surplus results from years of inaccurate budget forecasting from the Ohio Department of Job and Family Services and a reluctance to commit the state to expenditures that might be ongoing, said John Corlett, senior fellow for the Center for Community Solutions in Cleveland.

“If there’s anyone to blame, a larger part comes to the Ohio Department of Job and Family Services,” Corlett said. “They’ve underestimated the amount of available resources and overestimated what they were going to spend.”

Reluctance comes with carefulness of leaving some funds available for situations that need money most, said Dennis Evans, spokesman for the Ohio Department of Job and Family Services.

“There has always been a bit of a surplus,” Evans said. “We don’t want to spend every last cent in case we need it for something.”

TANF money is committed to a variety of programs in the next year-and-a-half, reducing the unobligated balance to an estimated $265 million by the end of July 2007, he said.

“We know this certain amount is going to be spent and is scheduled to be spent,” Evans said. “We are getting more accurate in our forecasting to help underspending, which adds to the surplus. We are working on ensuring that the money is wisely used and not just spent so we have a small surplus.”

Improved estimating and forecasting skills come from counties as well, Evans said, noting that counties have a significant amount of freedom as far as using and spending TANF money to help children.

The laid-back approach to welfare programs may be part of the surplus problem, Corlett said.

“We have a very decentralized system (in Ohio), which means every county in the state operates its program with flexibility,” Corlett said. “Some counties are more resourceful than others in getting the money out there to those in need.”

The Portage County Department of Job and Family Services developed 27 programs using TANF money, including a plan to help Hurricane Katrina evacuees.

“We worked very hard to find out what the emerging needs are in the county,” said Anita Herington, director of the Portage County Department of Job and Family Services. “We work closely with all the services in Portage County. We try to be responsive to what the needs are anywhere in the county.”

But no matter how much counties spend resources, the state must follow suit, Corlett said.

The size of the surplus, along with the Ohio Department of Job and Family Services fear of overspending, sends the wrong message to Congress because resources are not being used, Corlett said.

“It’s a hard argument to make in Washington,” he said. “You can’t argue that you need additional money when you’re sitting on $1.14 billion.”

Contact public affairs reporter Katie Phillips at [email protected].