DHHS Tells Finance Panel TANF MOE and Federal-Block Risks Will Need Closer Monitoring

Department of Health and Human Services officials told the House Finance Committee on March 3 that the state must continue meeting federal and state conditions tied to the Temporary Assistance for Needy Families (TANF) block grant and the related State maintenance‑of‑effort (MOE) requirement.

"These funds must be spent on TANF eligible families that meets at least one of the four purposes," Karen Hebert, director of the Division of Economic Stability, said, describing TANF block grant composition. Hebert and Nathan White, DHHS chief financial officer, explained that TANF funding in the governor's budget is made up of three parts: the federal block grant, a required state MOE (noted in the presentation as $32 million in general funds), and a carryover TANF balance.

White and Hebert told lawmakers the state currently uses TANF to fund a range of services: cash assistance, employment programs, family resource centers and prevention services, family planning and education programs, and post‑foster‑care reunification efforts. They said the department is considering how to measure outcomes and collect data to evaluate effectiveness.

Department staff warned of the consequences if the state failed to meet its MOE. White explained that the MOE is a statutory maintenance requirement: if the state does not meet MOE spending, it can face reductions and penalties that reduce future federal funds.

Lawmakers pressed for contingency planning. Representative Andrew Wallner asked whether any New Hampshire programs could qualify under TANF purpose number 4 (encouraging formation and maintenance of two‑parent families). Colleen McKinley, from the Bureau of Family Assistance policy unit, said two‑parent eligibility exists in limited circumstances (for example where one parent is incapacitated or disabled) and discussed the operational difficulties of resuming an earlier two‑parent program because of high federal work‑participation requirements.

Committee members voiced interest in numbers that would quantify immediate impacts of federal funding reductions. When Representative Preece asked who would be affected if federal child care block grants were cut, Hebert said the child care scholarship served 4,032 children as of January and noted that, "if we lost the CCDF fund today would not receive funding to support their child care." White added that unused federal CCDF funding in recent years had been reallocated toward quality activities when utilization was low, but if utilization grows the state may need different funding arrangements, including possible TANF transfers.

Why it matters: TANF and CCDF are large funding sources for state family assistance and child care programs, and both include federal rules that constrain how dollars can be used. The committee asked DHHS to assemble better forecasts and contingency scenarios so lawmakers can evaluate trade‑offs as the state finalizes its budget.

Next steps: DHHS said it will provide more detailed numbers on program caseloads and forecasts, and examine whether previously proposed programs (participants asked about a Nebraska model to support two‑parent families) could be adapted to New Hampshire while meeting federal participation rates and other requirements.

Ending: Committee members repeatedly asked the department to return with concrete scenario data showing how many people would be affected under different federal funding reductions, and whether the state could pick up those costs within the current fiscal plan.