Economy

Kansas Comes To Its Senses, Abandons Plans To Hit Welfare Recipients With Draconian Fees

CREDIT: AP Photo/John Hanna

Kansas Gov. Sam Brownback (R)

Kansan politicians tried to force public administrators to make life harder for poor people on welfare, passing a controversial law earlier this year to limit the amount of money public assistance benefits cards can withdraw from ATM machines at any one time to $25. But the public servants are fighting back, announcing Tuesday that they would rescind the law.

The move by Kansas Department for Children and Families (DCF) staff comes after federal officials advised DCF that the withdrawal limit appeared to violate some tenets of the federal law that funds the Temporary Assistance for Needy Families (TANF) program. In a release Tuesday, DCF head Phyllis Gilmore welcomed that advice and chastised lawmakers for ignoring her prior criticism of the withdrawal limits.

“This agency did not propose the $25 cash assistance withdrawal limit,” Gilmore said. “This was an amendment offered during legislative debate. At the time of discussion on the floor, DCF advised against such a low limit. I’m pleased that we now have the guidance needed to rescind this measure.”

Kansas leaders have known for months that the limit had the potential to cripple the state’s welfare system. Federal money for TANF is conditioned on recipients “hav[ing] adequate access to their cash assistance” and facing “minimal fees or charges” for withdrawing funds. Since ATMs don’t generally dispense $5 bills, the statutory $25 limit was in practice a $20 cap. The state charges a $1 fee for all ATM withdrawals, and banks often charge fees of their own for the transactions.

Until the law was amended in June to enable Gilmore’s office to rescind the limit if the feds found it violated those conditions, there was no off-ramp. If Kansas had lost its block grant, the state might have had to scramble to come up with TANF funding from its already-underwater budget. Or it might not have – these are uncharted waters, according to Center on Budget and Policy Priorities TANF expert Donna Pavetti.

“That is a question that no one really knows the answer to. It’s not clear whether states are really obligated to provide benefits or not,” Pavetti told ThinkProgress. “There’s nothing that stipulates they have to make up federal funds with state funds. So it’s a very gray area about what would’ve actually been the consequence if they actually violated that requirement.”

Kansas gets a little over $100 million of federal money annually as a block grant for TANF. But it spends far less on actually buoying the lives and welfare of the people the program serves. The block granting system adopted in the 1990s allows states to redirect significant portions of their TANF funding to other uses.

In 2013, Kansas spent less than 20 percent of its combined state and federal TANF money on direct assistance for welfare families, the 16th-lowest share of any state. It spent less than 5 percent of its TANF money on work-related activities for those families, 8th-lowest in the country. It spent a little under 15 percent on childcare programs, a middle-of-the-pack number relative to other states. These three areas make up the core of welfare program work, but received just 30.27 percent of Kansas’ total TANF allotment in 2013, according to Pavetti’s data.

Those numbers are down significantly since Gov. Sam Brownback (R) took over the state in January 2011. Prior to the recession, Kansas had spent over 60 percent of its TANF money on core welfare functions. That number was already down to 42.5 percent in 2011 and fell further in fiscal year 2012, the first full year of state programming that Brownback directed rather than inheriting. The share of TANF money the state redirects to entirely other purposes has increased steadily under Brownback.

As the state has shrunk its actual welfare spending, it’s also attached ever more strings to the meager aid it provides. Even after rescinding the withdrawal limit, Kansas will impose some of the most restrictive rules for TANF beneficiaries of any state. Federal rules mean a person can’t receive TANF for more than five years of their life, but Kansas has limited that to three years. The state maintains a lifetime ban for anyone convicted of a drug felony, a policy approach that’s falling out of favor elsewhere. The state drug tests recipients, even though it’s spent $40,000 on the tests and produced just a handful of positive drug tests thusfar. And benefits cards cannot be used in any way at a long, strange list of locations, including movie theaters, cruise ships, and public pools.