Some States are Hobbled in Race to Welfare Reform

Any day now, the federal government will send checks to Wisconsin and Alabama to pay for welfare reform; Wisconsin will get $1,450 for each poor child in the state, and Alabama $379.

With this and some money of their own, both states will be expected to revolutionize welfare by requiring poor families to find jobs within two years so that they can support themselves.

But although every state will face the same tough work requirements and time limits, no two will have the same resources with which to meet those requirements. Louisiana, for example, will get $357 from Washington for each poor child in the state. Vermont will receive $2,778.

States have always had big disparities in their welfare payments, but under new federal reform legislation, this uneven payment system poses difficulties that never existed before and could help determine whether welfare reform succeeds or fails.

The problem with transforming the old system into the new world of welfare reform is this: If you're a state on the low end of the federal payment scale, you have relatively little money with which to provide child care, transportation, training or public service jobs for those welfare recipients you're trying to move into work. And with issues like these widely considered the key obstacles standing between dependency and self-sufficiency, states lacking federal resources -- and unwilling to make up the difference on their own -- could be unable to meet welfare's new mandates.

Further, if states fail to meet federal standards, they will be docked up to 21 percent of their total grant, setting them even further back in the race to reform.

Alabama's money will ultimately be divided among people like Rose Williams, the state's social services director in Monroe County, who will have only enough money to pay for child care for 64 of her 260 welfare clients, let alone the funding to help them actually find work.

"It's going to be real painful in the near term," said Williams. "Our critical problem is resources. We don't have them. We know that right now."

By contrast, Republican Gov. Tommy G. Thompson of Wisconsin already has signed state legislation providing for universal jobs and child care for every welfare recipient in his state.

Wisconsin, he said, will augment its federal grant with millions of dollars of its own money to make sure that parents get off welfare. "It costs more up front to move people from welfare to work because you must invest in child care, health care, job training and transportation. But in the long run, once you start moving people off the welfare rolls, you save taxpayers money."

Four weeks ago, the country began a great social experiment, ending 60 years of guaranteed assistance for poor families and giving states welfare "block grants" that will essentially remain the same size for the next five years, whether the number of people on welfare increases or declines. Under the old system, states got money based on the number of recipients they had. Only now are many lawmakers waking up to the bottom line of their block grants, and some of them are not happy about the built-in inequities.

"It's like a 100-yard dash where everybody has to get to the same finish line but some people start 50 yards ahead of everybody else," said Sen. Bob Graham (D-Fla.), who fought unsuccessfully to give states equal grants for each poor child on their rolls.

Although Graham's effort went down in defeat, Sen. Kay Bailey Hutchison (R-Tex.) managed to insert an extra $800 million for states with high growth rates and low benefit payments. This will offset some of the inequities in the formula, but even so, it will be many years before any disparities narrow substantially.

The justification for preserving the long-standing differences in payments between states was simple: Welfare reform probably wouldn't have passed Congress otherwise. No state was willing to give up the federal money it had gotten used to receiving. So a compromise was struck: Virtually everybody would get a little bit more in the first year, but the relative differences between the states would remain.

The formula is fair, said Rep. E. Clay Shaw Jr. (R-Fla.), one of the authors of the welfare reform plan, because the federal government is simply matching the funding that states provided under the old system. "We just took the funding levels that they have had, and turned it into a block grant."

In other words, states that operated generous welfare programs were rewarded, and those that did not were penalized.

The problem for poor states or those that spent little on welfare is figuring out how to finance the heavy cost of welfare reform, which even conservative, "pro-reform" states like Wisconsin and Michigan admit can be substantial.

"We have great needs to provide adequate welfare-to-work programs, supportive services such as child care and we're looking at fewer dollars to do that with," said Joel Sanders, welfare reform director for the state of Alabama, whose state welfare payments have always been among the lowest in the nation.

Sanders said every parent he puts to work will cost him money if the children are young enough to require child care and if, as is often the case, the state has to foot the bill for providing it.

If a parent who has been getting $164 a month goes to work and requires child care that costs roughly $300, the state loses $136. By contrast, he said, if Wisconsin, which has been paying $517 a month, puts a recipient into a job that requires a $400-a-month child care subsidy, it makes $117 on every case.

Sanders said that his state will have only about a quarter of the money it needs to provide child care for the 20,000 children ages 1 to 3 whose parents receive public assistance.

Florida's Graham said the block grant formula "makes a mockery of the flag under which the whole welfare reform effort has moved. We have changed the body of the car, but we have left in the old engine."

The problem will be particularly difficult for states in the South, said Graham. Florida will get a block grant equaling $638 per poor child next year and New York will get $2,106. South Carolina will get $368 and Alaska $3,083. Although the block grants are not actually based on the number of poor children in the state, the child poverty rate is often used as a good indicator of the extent of need in a particular area.

Graham, who voted against passage of the bill, said by retaining such high disparities between the states, welfare reform is rigged against the most needy states.

"The rich will get richer and the poor get poorer."