The amount of unspent welfare aid in Colorado has ballooned to about $120 million, according to estimates, prompting some advocates for the poor to question whether too much of the money is sitting in bank accounts instead of going to help needy families.
Those reserves grew dramatically in recent years, up from $70 million three years ago. The money is supposed to help families move from dependency on welfare to the workforce.
The unspent money now equals nearly the entire amount of federal welfare aid the state distributes to counties annually.
“Now that is scary,” said Laurie Harvey, the executive director of the Center for Work Education and Employment, a nonprofit that advocates for welfare recipients. “That is a huge amount. You bet we could do a lot with that money.”
County officials say the reasons for the growth in reserves include a much-maligned state computer system that administers welfare benefits and new fingerprinting requirements for child-care providers for the poor.
They also say delays in federal reauthorization of the Temporary Assistance for Needy Families program played a role.
State officials place the blame on those delays too and also say the reauthorization of the TANF program by Congress in 2005 came with new rules that could penalize the state if it fails to do a better job steering more welfare recipients into work or educational training.
“I think a lot of counties held off on implementing a number of things that they would otherwise have done until they knew what the details looked like; and those details are only now becoming clear,” said Dan Daly, a legislative analyst at Colorado’s Department of Human Services.
Advocates for welfare recipients say the state’s unusual way of spending the money played a role. Colorado is one of 11 states that allow counties to decide how to spend the welfare aid.
Supporters of that approach say it fosters innovation, but critics contend it creates differing policies from county to county. Some counties, the critics say, do a better job of getting services to those in need, offering child-care assistance to welfare recipients in college for instance, while other counties refuse to do so.
Money piling up
From 2003 through July of last year, unobligated reserves for direct welfare assistance kept in county coffers grew from $14 million to $51.5 million. From 2004 through 2006, the unspent welfare aid counties designated for child care and child welfare programs grew from $44.8 million to $60 million. Reserves in those child-care and child-welfare accounts were so insignificant in 2002 that the state didn’t even track them.
The state of Colorado reports it also has about $10 million in welfare aid kept in a reserve account for an emergency.
Although figures for the fiscal year ending this month aren’t yet available, key counties, including Denver, say the reserves likely will remain the same or grow slightly.
Welfare cases down in ’07
Meanwhile, welfare caseloads spiked to more than 16,000 in 2005 before declining steeply the first part of this year to less than 12,000 – a drop state officials say most likely was caused by an improving economy.
Some county officials blame the state’s Computer Benefits Management System, a new welfare-tracking system that has suffered computer glitches and other problems, for the increase in reserve funds.
Barbara Drake, the director of the El Paso County Department of Human Services, where $4 million in reserves exist, said the computer system caused so much havoc that her county struggled to process benefits and for a while lost focus on helping steer welfare recipients toward self sufficiency.
Whatever the reasons for the increasing reserves, advocates for the poor wish state and county officials would do a better job of getting the money to the people who need it the most.
“We were always hoping there would be limited reserves, and they would use the money to provide support services to people,” said Maureen Farrell, executive director of the Colorado Center on Law and Policy, a nonprofit that analyzes the state’s budget and how it affects the poor.
Some advocates think more should be put into expanding existing child-care programs for welfare recipients.
“A lot of individuals leaving welfare find themselves in the service and retail industries,” said Linda Meric, executive director of 9to5, National Association of Working Women. “It can be difficult to find child care during those hours.”
The mushrooming reserves have become a priority for the new administration of Gov. Bill Ritter. In June, Karen Beye, Ritter’s new executive director of Human Services, appointed a committee of state and county officials to study what should be done with the reserves.
“Our new administration identified this issue almost immediately,” said Colorado Department of Human Services spokeswoman Liz McDonough.
Recipients not surprised
Welfare recipients say it’s no surprise the reserves are growing given the hurdles they face in accessing the aid.
“I can see where those reserves would exist because they’re making guidelines stricter and stricter,” said Anna Davis, who relies on welfare aid administered by Jefferson County to pay the child care for her six children while she gets a master’s in public administration and domestic violence from the University of Colorado. “People are dropping off because they miss filing a piece of paperwork.”
The application for child-care assistance in Colorado is 21 pages long, county officials confirm. In other states, that application is only two pages.
Colorado is not alone
Colorado isn’t the only state with growing reserves in welfare aid. Federal data show that nationwide, states reported their welfare reserves built up to $2.1 billion last year, but some states did spend all their money. California, Florida and Illinois were among those that reported keeping no welfare aid in reserve.
Denver alone is keeping at least $10 million more in welfare aid in reserve than its own Welfare Reform Board says is needed. That board, which sets policies for spending welfare aid in Denver, wants 10 percent of the welfare aid Denver receives annually kept for emergencies, an amount that would equal $4 million. Denver has built up a reserve of $14 million.
Reserves for child-care programs to assist welfare recipients also have grown in Denver, up to $15.7 million. Three years ago, the city had no welfare aid kept in reserve.
Roxane White, Denver’s director of the department of Human Services, said the growth was done purposefully.
She said the child-care reserves will get spent since Denver six months ago bolstered child-care programs for welfare recipients. Under those changes, more welfare recipients will qualify for such child care. Child-care providers also received a cost-of-living raise.
Denver also went almost three years waiting for Congress to reauthorize the TANF program, and now the new rules will have an impact, she said.
Colorado may not meet the new federal standards designed to steer more welfare recipients toward work, White said, and so Denver is preparing to pay sanctions for that.
“The reserve was a deliberate strategy on our part,” she said.
Staff writer Christopher N. Osher can be reached at 303-954-1747 or cosher@denverpost.com.
