Spending on Social Welfare Programs in Rich and Poor States. Final Report.. Arizona's Response to Federal Welfare Reform(1)

07/01/2004

Arizona initiated its welfare reform efforts in late 1995 through waivers from the federal government. The state's EMPOWER program, (Employing and Moving People Off Welfare and Encouraging Responsibility), included requirements under consideration for federal welfare reform including time-limited cash assistance, automatic sanctions for not meeting JOBS work requirements, a family benefit cap, transitional medical and child care assistance, restricted eligibility for unwed minor parents, and individual development accounts.

The state legislature began work on Arizona's second round of reform efforts in 1996 by holding a series of meetings and hearings to gather information on the EMPOWER program. The legislature heard from state agency officials, local officials, welfare advocates, welfare recipients, and others. The two houses of the state legislature ultimately presented welfare reform packages that differed significantly. The state senate, the more conservative body, was skeptical about the incentives in the existing state bureaucracy to reduce caseload and supported the complete privatization of the new welfare program. The state's house (and executive) favored restructuring Arizona's welfare agency to meet the goals of federal welfare reform. A compromise was reached to privatize eligibility and job services decisions in a limited number of sites, for a limited time, and with an evaluation requirement.

Empower Redesign, the state's TANF program, went into effect in August 1997. The new program built upon earlier efforts to establish a more employment focused "work first" client flow, require Personal Responsibility Agreements, institute progressive reductions in monthly cash assistance benefits including a full-family sanction for not complying with requirements of the Personal Responsibility Agreement, and elimination of exemptions from work requirements.

Due to the block grant structure of TANF and the decline in Arizona's welfare caseload in the late 1990s, the state accumulated a surplus of federal TANF funds. In SFYs 1999 and 2000, Arizona used TANF to implement new programs including Wheels-to-Work, Character Education Training, Young Fathers, Employment Transition Program, Domestic Violence Training, Post-Employment Education Program, and Technical Assistance to Business. These programs were eliminated to meet demands for cash assistance payments when Arizona's TANF caseload began to increase shortly after the recent economic downturn. Several programs providing child protective services, substance abuse services, and grant diversion payments, implemented with TANF funds, survived the initial round of cutbacks.

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