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Why Kansas' New Welfare Rules Are Basically Unenforceable

The state's law banning welfare spending on entertainment and luxury goods and services sparked a national debate about how people use public assistance.

Kansas earned national media attention this month, complete with a skewering on "The Daily Show," for a new law that will ban welfare spending on video arcades, theme parks and cruises. Last week, Gov. Sam Brownback signed the measure, which has sparked debate about how people on public assistance typically use the money and whether abuse is pervasive enough to warrant tighter government restrictions. But it also raises a host of logistical considerations for public officials charged with implementing these detailed bans on welfare spending.

“The reality is, they likely can’t,” said Shannon Cotsoradis, who runs Kansas Action for Children, an anti-poverty nonprofit. “Enforcing this would be very difficult.”

The law, which goes into effect in July, places new spending restrictions on Temporary Assistance for Needy Families (TANF), the federal safety net program administered by states. As of December 2013, about 1.7 million U.S. households were on TANF. In Kansas, a family of four can receive monthly benefits ranging from $454 in some rural counties to $497 in highly populated areas. To qualify for cash assistance, a family must be in extreme poverty: a household with one adult and two children cannot earn more than $518 a month ($6,216 a year). Unlike some safety net programs, TANF allows recipients to convert benefits to cash by withdrawing funds at an ATM. Low-income families typically use TANF as a flexible funding source to pay basic living expenses, such as rent, groceries and gas.

Several states have considered bills this year that would further limit how poor people can spend their public benefits. Legislation introduced this year in Montana, Utah and Indiana all called for drug testing people on TANF. A bill in Missouri sought to ban people on federal food assistance from buying “cookies, chips, energy drinks, soft drinks, seafood, or steak.” While Kansas is the latest state to prohibit certain types of TANF spending, at least 23 states have passed laws placing similar restrictions on electronic cards that store the benefits, according to a review last year by the National Conference of State Legislatures. 

The Kansas law bans TANF spending on a wide range of items and in certain venues. TANF recipients are prohibited from using cash withdrawn from TANF funds to buy alcohol, cigarettes, lottery tickets, concert tickets and tickets to sporting events. They’re also banned from making purchases at liquor stores, casinos, massage parlors, lingerie shops, movie theaters, nail salons, video arcades, swimming pools, cruise ships, horse racetracks and strip clubs.

Because TANF benefits can be turned into cash, Kansas’ expanded bans could only be enforced effectively if the state found a way of identifying instances where people spend cash for prohibited purposes. Even more problematic, the state would have to demonstrate that the person misspent cash derived from TANF, not cash earned on a job or from another source.

“I have no idea how we could set up a process to monitor that,” said Janet Schalansky, a former secretary of social services in Kansas. “It would not be a bill I would want to write rules and regs on.”

Swimming pools are just one of the many places where Kansas will soon prohibit people from spending welfare money. (AP/Matt Rourke)

Kansas does have a system for identifying some kinds of unscrupulous spending in TANF. A federal law enacted in 2012 banned people from taking TANF benefits loaded onto their electronic debit cards and spending them at liquor stores, casinos and strip clubs. In Kansas, a third-party contractor automatically blocks card transactions at restricted locations based on identifying information about the merchant or ATM location. The same process will be used for the expanded list of prohibited venues. 

Nonetheless, cash-based transactions after a legal ATM withdrawal pose an enforcement challenge. "We know right now that tracking cash purchases is very difficult," said Theresa Freed, a spokeswoman for the Kansas Department of Children and Families. "It would require somebody to follow an individual and that's not something we've done."

Reporting two years ago by the conservative nonprofit news site Kansas Watchdog inspired the new TANF restrictions. Kansas Watchdog highlighted cases where TANF recipients withdrew money from ATMs in strip clubs, bars and casinos. One story identified more than $43,000 in potentially abusive ATM withdrawals over a three-month period. The amount accounted for less than 3 percent of the TANF electronic card transactions in that time frame, however.

“The percentage is small, but it doesn’t matter,” Kansas state Rep. Travis Couture-Lovelady told reporters last week. “It’s still a significant amount of money that’s not going where it’s supposed to.”

In a Facebook post, the agency defended the new law. “No one is banning a low-income family from going to a swimming pool. The Kansas HOPE Act simply says your welfare benefits are there to help you temporarily obtain the basic necessities for your family.”

Liz Schott, a researcher at the Center on Budget and Policy Priorities, said the items banned aren’t her main concern. Few would dispute that TANF dollars shouldn’t go toward gambling and liquor, and if the state can figure out a way of automatically blocking that type of spending, that would improve program integrity. She takes issue with other, less-publicized provisions that put low-income households at risk of falling deeper into poverty.

For example, Kansas also shortened the number of months someone can ever receive TANF from 48 months to 36 months. Lawmakers also limited the amount of money that people on TANF can withdraw from the ATM each day (effectively $20). The new law also prohibits the use of state or federal funds to increase enrollment in federal food assistance through television, radio or billboard advertisements.

In its Facebook post, Kansas DCF proudly cited the shrinking number of people receiving TANF in Kansas as evidence that its policies are pushing people to find jobs and leave welfare.

Schott doubted those claims. “What are they really doing, besides cutting people off?” she asked.

J.B. Wogan is a Governing staff writer.
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