NCPA - National Center for Policy Analysis

Welfare Funds Going Unspent

August 30, 1999

With the dramatic decline in welfare caseloads, coupled with fixed sums of federal funds flowing to them from Washington, states are awash in surpluses. Of the $34.4 billion given to states from 1997 to 1999, $7.4 billion remains unspent.

For example, Wisconsin -- which has reduced welfare rolls by more than 80 percent -- still gets $317 million a year from the federal government, just as it did five years ago. So from 1997 to 1999, it built up $349 million in unspent funds.

  • On average nationwide, the federal subsidy per welfare family has risen from about $3,200 in 1994 to nearly $5,300 last year.
  • Wisconsin -- the state with the highest subsidy -- received $21,600 per case last year.
  • Amounts going unspent vary widely from state to state -- with Wyoming retaining 91 percent of its federal welfare subsidy, to zero retained by Illinois, Connecticut, Maine, Nevada and Delaware.
  • By the end of last year, 19 states had accumulated more than $100 million in unspent anti-poverty money.

If current trends continue, unspent funds will mount to $22 billion by 2002, from the present $7.4 billion.

Source: Jason DeParle, "Leftover Money for Welfare Baffles, or Inspires, States," New York Times, August 29, 1999.


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