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The Honolulu Advertiser
Posted on: Thursday, May 22, 2008

COMMENTARY
Spending cuts uncompassionate, unsound

By Lillian B. Koller

Anyone who attended a recent rally at the state Capitol or saw the extensive media coverage was surely impressed by the outpouring of support for anti-poverty programs funded by federal Temporary Assistance for Needy Families dollars.

Hundreds of adults and children gathered in the Capitol rotunda on April 16 in hopes of persuading legislators to save TANF-funded programs contracted by the state Department of Human Services. Sadly, majority party leaders in the House and Senate ignored those pleas and imposed Draconian spending cuts.

These politicians claimed they made $22.6 million in TANF spending cuts, which was bad enough. After analyzing the final budget, however, DHS determined that the Legislature slashed TANF spending by more than $28.2 million for the upcoming fiscal year.

This means that instead of using federal funds to confront pressing social needs, this money will sit idle in a reserve account and can only be used for cash assistance payments to welfare families in future years rather than for social programs that can help people immediately.

In attempting to justify their misguided actions, the Senate and House budget committee chairs — Sen. Rosalyn Baker and Rep. Marcus Oshiro — claimed they had to impose severe spending cuts or the TANF reserve would be depleted in a year and a half.

This is simply untrue.

The truth is there is no need to hoard federal dollars for a rainy day that may or may not come.

The truth is Hawai'i has the nation's fourth-largest percentage of TANF funds in reserve, according to the U.S. Department of Health and Human Services. We have about four times the amount of money in reserve than we spend on cash assistance each year, and now the Legislature has needlessly added another $28.2 million.

The truth is our reserve would not have been depleted in 18 months as the majority leadership claims — or at any point — and every October we receive an infusion of nearly $99 million for our annual TANF block grant.

The truth is welfare cases are dropping every year — regardless of economic conditions — as needy parents transition from welfare to employment or exhaust their five years of TANF eligibility. In 1999, the average number of cases was 16,103 individuals. By 2007 that figure dropped to just 6,028.

The truth is in the unlikely event that welfare cases increase sharply and additional money is needed for cash assistance, DHS can easily scale back or eliminate its service contracts with 30 days' notice.

And the truth is more than half the states are comfortable with zero or only negligible amounts of TANF dollars in reserve.

That's because they realize, as the Lingle-Aiona administration advocates, that it is better to spend money today on programs that prevent and reduce family poverty rather than hold the funds in reserve to pay a much higher price in the future due to spikes in crime, incarceration rates, truancy, substance abuse, teenage pregnancies, domestic violence and child abuse and neglect.

Not only will these spending cuts harm our most vulnerable residents, they will significantly impact nonprofit groups supported by TANF money. Compounding this problem, the Legislature denied more than $46 million in grant-in-aid requests from nearly 140 nonprofit groups.

This one-two punch of funding losses will lead to service reductions at nonprofit groups statewide, meaning many layoffs — this time directly caused by imprudent actions of the Legislature's majority leadership. It is almost as if they want to create the economic doomsday they are predicting at the expense of our most vulnerable citizens.

Clearly, the Legislature's spending cuts are uncompassionate, unnecessary and fiscally unsound. So why was there such a rush by majority party leaders to undermine the Lingle-Aiona administration's support of social service programs? Unfortunately, it appears the reasons are purely political.

Consider comments by Rep. Oshiro in an April 7 Advertiser story. He thinks the administration wants to earn good will in the social service community by awarding contracts, knowing the next administration will have to cut those contracts. Such a belief is cynical and off the mark.

Then Sen. Baker tried to confuse the issue in a KGMB interview by implying that the anti-poverty contracts could have been saved if only DHS funded them with state as opposed to federal dollars. The insincerity of this is hard to miss, given that the Legislature chopped more than $44.7 million from Gov. Linda Lingle's budget requests.

I believe The Advertiser accurately assessed this troubling situation in an April 8 editorial, which pointed out that TANF spending cuts are "a premature reaction anticipating a long-term unemployment increase that may not happen."

For my part, I will continue advocating on behalf of successful, research-based programs that help families escape poverty and prevent young people from falling into poverty. And that is precisely what our federal TANF dollars are supposed to accomplish.

Lillian B. Koller is director of the state Department of Human Services. She wrote this commentary for The Advertiser.