JBC staff warns TANF reserves shrinking; committee approves smaller food and diaper grant cuts

Tom Dermody, a budget committee staff member, told the Joint Budget Committee on Feb. 21 that the committee’s statutorily required review of Temporary Assistance for Needy Families (TANF) reserves shows rapidly increasing pressure on both county and state balances. Dermody said expenditures are rising while available TANF dollars are essentially fixed, and that recent statutory changes that raise basic cash assistance are contributing to the drawdown.

The committee heard staff figures showing county reserves declined from about $48 million at the end of fiscal 2022–23 to about $35.5 million at the end of 2023–24 and that counties are drawing down roughly $12.1 million per year. Dermody warned that if spending continues at that rate, “they will pull down beyond that minimum floor for the county reserves,” and staff projections show the statewide county reserve could fall to roughly $3.7 million by 2026–27. Staff also presented a summary table projecting that, under flat spending assumptions, the state would be required to backfill county reserves beginning in 2026–27 and the state reserve could itself fall below its minimum in 2027–28, requiring general‑fund backfill assuming the…