Temporary Assistance for Needy Families

Temporary Assistance for Needy Families (TANF) is a federally funded block grant. States operate a variety of programs utilizing this funding, but they must fall under one of the four purposes of TANF:

  1. Provide assistance to needy families so that children can be cared for in their own home.
  2. Reduce the dependency of needy parents by promoting job preparation, work and marriage.
  3. Prevent and reduce the incidence of out-of-wedlock pregnancies
  4. Encourage the formation and maintenance of two-parent families

As part of our work supporting the Hope Starts Here initiative, D3 did a national comparative analysis of TANF budgets in each state. We looked specifically into programs and funds that can be used directly for early childhood development. While others have analyzed actual TANF programs for efficacy (for example, the Detroit Free Press found questionable uses of TANF dollars for private school scholarships), this analysis focuses specifically on the per capita spending of TANF dollars at the state level and the percentage of the total budget that certain categories represent.

The analysis is based on this table of TANF expenditures by categories most relevant to early childhood development.

With total 2015 spending at $1.3 billion, Michigan is fourth in total TANF expenditures, about 4% of the nationwide total. However, when adjusted for population, Michigan falls to number 10 at $131 per capita. Washington D.C. spends the most per capita at $393 and Idaho the least at $21. The national average is $91.

“Basic assistance” accounts for cash-type payments that help a family meet basic needs such as goods, clothing, shelter, utilities, etc. This includes programs that supplement the relative foster care maintenance payments and foster care subsidies. In terms of basic assistance, Michigan is number 44 in spending as a percentage of total expenditures. The $149 million basic assistance budget is about 12% of the total budget. Nationally, about 27% of total TANF budgets are spent on these basic assistance programs.

In terms of early care and education, including child care subsidies and expansion of Head Start programs, Michigan is ranked number 22 in percent of total expenditures to early care ($224 million is about 17% of the budget). Nationally about 20% of total TANF expenditures are on early care and education. Three states spend no money on this section of TANF. In early care, expenditures are broken out into childcare assistance and education, where Michigan is ranked number 42 in percent of total spending for childcare assistance and number 8 in education (including Head Start programs).

Another category for young children in Michigan is services for children and youth, which focuses on supporting life-skill acquisition and educational attainment. In terms of spending on services for children and youth, which includes after-school programs, mentoring, and tutoring programs, Michigan is ranked number 1 in percentage of spending. Michigan spends 24% of its budget on these programs. Thirty states do not spend any money on it.

Michigan is ranked number 4 in program management expenditures. Michigan spends about $316 million on program management (24% of the budget). Nationally, about 11% of the TANF budget goes to program management. In Michigan, most of the program management expenditures go to assessments and service provision (20%) with the remaining 4% going to administrative costs. Administrative costs are capped at 15% by federal law. Assessments and service provision includes costs associated with screening (including substance abuse), case planning/management, and social security disability or supplemental security income application services.

Total spending for Child Welfare Services in Michigan is currently ranked number 10 at about $42.7 million (3% of the overall TANF budget). 100% of the money spent on Child Welfare Services is allocated to Family Support, Family Preservation, and Reunification Services. Michigan does not apportion any money to adoption services or additional child welfare services.

Hopefully, this analysis of TANF spending in Michigan can help provide context to the current policy discussions around early childhood development in the state and specifically in Detroit. We look forward to continuing to support the Hope Starts Here initiative as it works to provide local children with the best start in life.