Saints, Stalwarts, and Slackers: State Financial Contributions to Welfare Reform

Abstract

Considerable literature finds that spending levels are important predictors of poverty rates, both in the American states and in western European nations. Those jurisdictions with the most generous support programs generally have lower poverty rates. This article examines state Temporary Assistance for Needy Families (TANF) spending levels in relation to national norms, the spending ability of the state as predicted by their total taxable revenue base, and the state's poverty rate. The analysis shows enormous variation in state per capita TANF spending, with many states spending far less than the national mean and their fiscal capacity. Most of the low‐spending states have the fiscal ability to fund more vigorous programs but at optimal levels; some would still fall below the national mean. In return for improved funding, these states would be candidates for increased federal assistance. A few states with a high poverty rate and usually with large numbers of poor citizens are generous spenders, indicating that funding is one component of effective programs.

No Race in Any Direction: State Welfare and Income Regimes

“…Some states have adopted comprehensive, sophisticated welfare reform policies designed to help their poor and low‐income citizens transition into the job market, while others have done the bare minimum (Meyers, Gornick, & Peck, 2002). Some states are spending rather generously on TANF and its support programs, while other states are maintaining only their required spending despite high and persistent poverty rates and the availability of federal and often state funds with which to combat the problem (Rodgers, 2005; Rodgers & Tedin, 2006).…”

“…In contrast to those who perceive a “race to the bottom” to be the prevailing metaphor in American welfare policy, we find that states have remained fairly stable in their welfare and income support policies over the last decade. Those states that provided relatively generous support in 1996 have remained supportive, and those states that had been at the bottom in 1996 have, at best, remained stationary (Rodgers, 2005). The simple correlation between AFDC/TANF benefit levels for a single parent with two children in 1996 and 2004 is 0.9335; p > 0.0001 (see Figure 2).…”

“…As a legacy of restrictive federalism under AFDC, Southern states did not develop the government capacity of most of the other states. As Table 1 shows, today, the states of the former Confederacy are prominent among those states that provide the least sophisticated, inclusive, and supportive welfare programs; spend below capacity; and have limited income support programs (Meyers et al., 2002; Rodgers, 2005; Rodgers & Tedin, 2006).…”

“…Numerous studies have found that wealthier and more economically viable states and nations spend a larger percentage of their budgets on welfare and income support programs (Fritzell & Ritakallio, 2004; Rodgers, 2005; Rodgers & Tedin, 2006; Smeeding, 2005, 2004). Our hypothesis is that states with the greatest financial resources will be more generous supporters of welfare and income support regimes.…”

State Poverty Rates: Do the New Welfare Policies Make a Difference?

“…Most obvious is the state economy. Research has long shown that poverty is lower in "richer" states and that poverty rates decline when state unemployment rates decline (Rodgers, 2005c;Blank, 1997Blank, , 2002bHoynes, 1996;Hoynes & MaCurdy, 1994;Tobin, 1994). Last, the literature has found that poverty is higher and welfare policies less generous, more restrictive, and less effective in those states with a high percentage of black citizens on the welfare rolls (Brown, 1999;Fording, 2001Fording, , 2003Soss, Schram, Varanian, & O'Brien, 2001).…”