Alabama Welfare Plan: Making Do With Less

New block grants could shrink federal funding in South

IN a cluttered room of an old high-rise here, Kimble Forrister and staff are trying to shape welfare reform in this Deep South state. Gathered in front of a blackboard, they pore over ideas culled from more than 20 meetings conducted this year with Alabama's poor.

Mr. Forrister, director of Alabama Arise, an advocacy group of 92 religious, social, and civic organizations, and the handful of adults here hope to sway how the state Legislature reforms welfare. But while the group relishes the opportunity to have a say in the process, it's concerned the state won't invest enough in helping recipients become self-sufficient.

The group's concerns center around the issue of block grants - limited lump-sum payments Congress plans to give to the states that would replace an array of federal antipoverty programs. Both the House and Senate have passed separate bills that would give states wide flexibility to design their own programs.

Many lawmakers see block grants as a way to cut out bureaucracy. "The local government is best suited to taking care of local needs and will cut out a lot of overhead, a lot of waste," says Michael Ciamarra, policy adviser to Alabama Governor Fob James (R).

Yet, while it is still too early to tell how states will be affected, some observers contend that welfare recipients in poor southern states like Alabama may be affected most adversely by the changes because of their past spending on welfare and their conservative leadership.

"In conservative Southern states welfare is seen as a necessary evil," says Joel Sanders, director of welfare reform for the Alabama Department of Human Resources. "States like Alabama that never raised its welfare spending very high are about to drag that legacy into the future through the block grant."

To understand this, it's necessary to know how welfare currently works. Right now, states rely on a mix of federal and state funds to pay for social programs like welfare. Washington matches from 50 to 80 percent of a state's welfare funding based on a formula that takes into consideration the state's per capita income.

Poor states thus receive a greater percentage than affluent states; Alabama, for instance, gets about a 70 percent match of federal dollars. Out of the state's yearly cost for welfare benefits, which totals $100 million, Alabama pays $30 million and the federal government pays $70 million.

The system is set up so that the more a state spends, the more it gets from Washington. But states don't always spend more to get more. Alabama and other Southern states have never contributed much. Here, the payment for a woman and two children is $164 a month; of the 50 states, only Mississippi's $120 check is lower. New York's average payment is $577 a month.

Alabama's historical pattern of low spending on welfare is part of what concerns Forrister. Under House and Senate welfare reform, states would receive money based on 1994 spending levels and are required to maintain only 75 percent of current levels of contribution.

Having a set block-grant amount scares some. "If poverty rates or unemployment increase we don't have the flexibility of additional funding," Forrister says.

But Alabama Republican leaders view managing welfare spending as an opportunity to overhaul a system in need of repair. "Our thrust is to not only save money but to help families and help people get out of this trap we're in," says state Rep. Jim Carns (R).

With block grants on the horizon, some say states don't realize the challenges of inheriting newfound flexibility. "There's been a lot of brave talk about how the states are going to be able to jump right in, but in fact I think it's going to be a pretty daunting job," says Donald Kettl, a senior fellow at the Brookings Institution in Washington.

Alabama's welfare bill, which is on hold until the federal government signs off on a budget deal, would end benefits after two years. Still under consideration: child-care provisions, job placement, health care, and ways to encourage marriage.

Providing those services are essential to moving people successfully off welfare, but they also come at a price. States like Wisconsin have spent more state money on job training and education to help wean people from public assistance - not less.

"We have less ability to find the dollars to do the additional services, and that's the piece that I'm not sure that Southern political leadership understands," Sanders says.

Alabama may have a few things in its favor, though. The welfare rolls - totaling 45,000 families - have dropped by several thousand since 1993 because of an improved economy and more state efforts to enforce child-support. And because the welfare payment is so low, it is almost too small to count. "Since we already give welfare recipients so little, it's clearly not how they're surviving," Sanders says.

Meanwhile, Alabama Arise will soon take its proposals to the Legislature. On the agenda: allowing recipients to keep Medicaid and transportation for 18 months after working and providing child care for the neediest.

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