Lawmakers intend to revisit the issue in the next session, though, said Michael O'Donnell, the Republican chairman of the state Senate's ways and means committee
"This $25 limit became a distraction," he said. "We wanted to make sure that we were not losing sight of our main goal, which was to get people off of government assistance and into the workforce."
Earlier this year, the GOP-controlled legislature in Topeka codified a set of restrictions on Kansans who receive cash from Temporary Assistance for Needy Families. It is a small federal program that largely benefits single mothers with children and is administered by the states, which have some freedom in determining how the money is distributed.
Some new rules had already been put in place a few years ago by Gov. Sam Brownback's administration, and the legislature simply wrote them into law. Yet lawmakers made a few changes of their own, too, including the $25 daily limit on cash withdrawals.
They were concerned that some recipients were withdrawing all of their benefits at the beginning of each month and throwing the cash away on luxuries, entertainment or drugs.
"There are actual reports posted as to where the ATMs were that cards were used by Kansas residents," state Sen. Caryn Tyson, a Republican, said at the time. She said that recipients were withdrawing cash "at liquor stores, cigarette shops, strip joints. Casinos was another. There was a $102 [withdrawal] from a person in Colorado at a Rockies baseball game. We don't know that they spent it on the game, we don't know what they spent it on, but the ATM was at the Rockies facility. Another one was on a cruise."
Critics said that Kansas's poor did not need the state to impose fiscal discipline on them. They noted that many poor families depend on cash in ways that more affluent policymakers might not expect.
For example, many poor households don't have bank accounts, meaning that they cannot pay rent or utility bills with a check. Data from the state Department of Children and Families show that Kansans in the program withdraw more than two thirds of their benefits each month in cash.
The withdrawals are often in large amounts, likely to avoid unnecessary fees and the inconvenience of a bus ride to the nearest bank.
Brownback signed the limit into law, but warned that it could exceed Kansas's authority with regard to the federal program. According to the guidelines issued by Congress, states must allow recipients "adequate access" to their benefits.
Several weeks later, the legislature passed a new law giving the Brownback administration flexibility to raise or eliminate the $25 limit if necessary in order to comply with the federal rules. And last week, when officials in Washington said they thought the limit would be illegal, the Brownback administration scrapped it.
"I’m pleased that we now have the guidance we needed to rescind this measure," Phyllis Gilmore, Kansas's secretary for children and families, said in a statement.
The limit likely would not have taken effect soon in any case. The administration had said earlier that programming ATM systems to deny withdrawals in excess of $25 would take at least six months and possibly as long as a year. (Since most ATMs only dispense $20 bills, they would have to deny any withdrawal over $20 in practice. Beneficiaries would have only been able to withdraw a single bill a day.)
Sen. O'Donnell argued that the limit was a small part of the overall bill, which put in place new work and education requirements for beneficiaries.
Those changes will "reduce welfare dependence and increase job opportunities for Kansans," he said.
Critics say the new policies, along with a separate increase in the state sales tax, will only make life more difficult for the poor.
For example, Kansans will be able to draw benefits for no more than three years over their lifetimes under the new law. At the beginning of next year, many families who have been in the program for longer than three years will stop receiving cash.
"We will have many families that will actually no longer be eligible for benefits as of January 1," said Shannon Cotsoradis, the president of Kansas Action for Children. "That’s on top of many of the other policy changes in the state that are really requiring low income families to carry a larger burden."