Funds for needy families, size of cash reserve debated

The Legislature continued discussing the state budget Wednesday, with senators debating how the state should help needy families, and how much to keep in the state’s cash reserve.

Every year, the federal government sends money to Nebraska for the Temporary Assistance for Needy Families, or TANF, program. But the state hasn’t used all that money, and now has a surplus of more than $100 million in TANF funds.

The state budget proposed by the Appropriations Committee would use about $32 million of that for programs including legal advocacy for children, combating domestic violence, and restocking Food Banks. But an attempt to use another $1 million from the TANF funds for a program to house pregnant teenagers provoked pushback in the Legislature Wednesday from senators like Danielle Conrad.

“We shouldn't be raiding these funds that come to us for no other purpose, colleagues, no other purpose than to help the neediest Nebraskans work their way out of poverty,” Conrad said.

Conrad said studies and personal testimony have consistently shown that the best way to help low-income families is to put money in their pockets that they can spend as they see fit.

“Whether it's fixing a broken tire that helps them get to work, or helps get their kids to school, whether it's school supplies that aren't covered in WIC, or in food stamps or otherwise, but they buy their kid a backpack, whether it's the simple personal care items that their SNAP benefits can't be utilized for, whether it's a birthday cake, this is the testimony we had before the Health and Human Services Committee,” she said.

Currently, a family of three with income of less than about $11,000 qualifies for a maximum TANF grant of $485 a month. Conrad has a bill that would increase that to $749, but it’s stuck in the Health and Human Services Committee.

Sen. Machaela Cavanaugh, sponsor of a different proposal to expand TANF benefits, also opposes using the funds for other purposes. She said the Legislature has skewed priorities.

“It's $130 million in the rainy day fund and we cannot get this body to increase eligibility. Why? Why, Nebraska? Why can't we because everybody wants to steal the money for their projects. That's why if we give more money to the people that the program is intended for, there won't be enough money for us to steal. We'd have to use our general funds and then we couldn't give massive tax cuts to rich people,” she said.

Sen. Anna Wishart, a member of the Appropriations Committee, defended the proposal to use the funds for housing pregnant teens.

“When we looked at the different investments that we're making out of TANF, whether it be the food banks, whether it be domestic violence, whether it be support for kids who are victims of sexual abuse, or whether it be the operations to go and support a center that supports new mothers and pregnant teens, it is my understanding that those do fall in line of uses for this fund,” Wishart said.

Sen. Jana Hughes said the million dollars had originally been proposed to help build a new home for pregnant teenagers. But TANF funds can’t be used for construction, so the money will be used to run the home, instead.

“The plan is now to use the funds for ongoing operations that currently exist. This programming is happening, and they are helping the homeless youth and wards of the state who are pregnant or with child,” Hughes said.

Responding to the opposition to using the million dollars from TANF, Sen. Rob Clements offered an amendment to use state general funds instead. Senators voted 41-0 to adopt Clements’ amendment.

Wednesday afternoon, the Legislature addressed a different aspect of the budget, this time involving much larger sums of money. Clements offered an amendment which would ultimately reduce the state’s cash reserve from $950 million to $780 million. That’s below the 16 percent of state spending that’s been the stated goal of the Appropriations Committee. The proposed reduction prompted Sen. Wendy DeBoer to ask Clements, chair of the Appropriations Committee, a question:

“Why are we putting less than what we should have in our cash reserves, at 16%?” DeBoer asked.

“The $780,000,000 – three quarters of a billion dollars -- will still be in there, which is still over what historically we've had. The governor's office tells me he's comfortable with that as well,” Clements responded.

Conrad jumped into the discussion to say the fund transfer is to facilitate tax cuts which she opposes.

“The reason this is being moved is to pay for Kansas-style tax cuts that primarily support the rich,” Conrad said.

DeBoer questioned Clements about that.

“So we're using basically one-time funds from now to put it in the general fund, to keep them in the general fund, so that in the future we can pay for the tax cuts that we do this year?” she asked.

“I believe so, but I haven't been even myself given all the moving parts,” he said.

Sen. Tom Briese said the tax cuts are sustainable, and are based on below-average estimates of future revenue growth. He said the taxes will be phased in over a period of years, and future Legislatures could delay that phase-in if necessary.

“We're stepping in most aspects of the tax relief packages future bodies can hit the pause button if necessary but I would submit to you that is likely not going to be necessary,” Briese said.

Senators voted 31-9 to adopt the proposal that would reduce the amount going into the cash reserve, as debate on the budget continued.