Why is North Carolina’s Legislature Diverting Money Away From Low-Income Families?

January 26, 2022

By Kaillou Macon-Goudeau, member of Carolina Forward Research Team

State lawmakers in North Carolina are playing fast and loose with federal funds meant to support low-income families. That’s according to a new report from the Center on Budget and Policy Priorities, which takes a look at how states across the country are using federal funds from the Temporary Assistance for Needy Families program, or TANF. TANF is what’s known as a “block grant” program, which means the federal government grants funding which is then managed by each of the states. And it’s a lot of money – in fiscal year 2020 alone, North Carolina’s TANF block grant was over $300 million.

The problem? Though TANF was created to help states provide basic cash assistance to very low-income families with children, many state lawmakers, including North Carolina’s, are diverting those funds into unrelated budgetary items. In fact, in 2020, North Carolina spent only 6% of its TANF funding on actual basic assistance to families.

One pattern noted in the CBPP report was how lawmakers in states with large Black populations appear particularly guilty of diverting TANF funds:

Of the five states with the largest Black child populations, all but one (New York) have TANF programs where maximum benefits are below 20 percent of the poverty line or where 10 or fewer of every 100 families experiencing poverty receive assistance, or both. A closer look at these states — Texas, Florida, Georgia, and North Carolina — illustrates many of the issues with TANF spending…

North Carolina is home to the fifth-largest Black child population. In 2020, North Carolina spent 6 percent of its TANF funds on basic assistance. TANF in the state now reaches only 5 in 100 families with children in poverty, down from 74 in 1996. North Carolina has also not increased TANF benefits since 1996, and the maximum benefit level of $272 lifts a family to just 15 percent of the poverty line today.

Read More

North Carolina’s implementation of TANF is known as the Work First (WF) program. It was created to support working class families going through hard times. However, only about 1 in 20 families in poverty in North Carolina today actually receive the benefits TANF was created for. That is particularly worrying because families are qualified up to double the poverty line. There is also a time restraint of 2 years that, if met, will lead to a family being cut off for the next three years.

What can be done? Well first, most low-income families should check if they qualify at their local Department of Social Services. Like the FAFSA (the Free Application for Federal Student Aid), many families underestimate how much they are eligible to receive. Secondly, the state can and should do more to increase direct cash payment to families, as well as remove undo restrictions or quotas. Lastly, it can restructure its work and educational programs to focus more on low-income families instead of going to programs that already favor middle and upper-class families.

Help build progress for North Carolina.

Get in touch
PO Box 452, Carrboro, NC 27510

    Stay updated with us

    Stay Updated

    Receive the latest news from Carolina Forward