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Why Are States Passing Up Millions in Federal Funding?

Only a few states take advantage of the federal matching funds intended to help employ food stamp users.

Wooden tokens worth SNAP benefits.
Flickr/U.S. Department of Agriculture
Eighteen years ago, congressional welfare reform overhauled the system of federal poverty assistance, in part by attaching a new work requirement for families receiving federal aid. Now changes are under way that will make employment a higher priority for food stamp recipients as well. 

More than 46 million low-income Americans receive food stamps, known today as the Supplemental Nutrition Assistance Program, or SNAP. Since the recession, the program’s growth in both participation and cost has led some members of Congress to argue that the U.S. Department of Agriculture isn’t doing enough to compel people to find work and leave public assistance.

The agriculture department does offer states money for programs aimed at increasing employment and earnings among SNAP recipients, but it hasn’t tracked whether the programs actually result in people getting jobs or better salaries. In the most recent farm bill, Congress called for new reporting requirements so that states have some idea of whether their programs work. The same bill also set aside $200 million for up to 10 state pilot projects to experiment with workforce strategies, along with a third-party evaluation to test which approaches are most effective. The agriculture department gave about $78 million last year for states to offer basic workforce services to SNAP recipients, often in the form of job search assistance. 

Meanwhile there’s other money -- and lots of it -- that states are currently missing out on when it comes to workforce benefits for SNAP recipients. States can collect millions in federal matching funds to pay for items intended to help SNAP recipients find and keep jobs, things like tuition fees, school textbooks, clothes for interview uniforms, child care and transportation. But most states don’t apply for the match. Out of the $206 million in federal matching funds spent in 2013, five states accounted for almost 80 percent of the money: California, Illinois, New Jersey, New York and Washington state. “The fact that so few states take advantage of this is a problem,” U.S. Agriculture Secretary Tom Vilsack said at a House committee hearing in September. “This is a personal focus of mine.” 

One reason for the lack of states’ interest is because the funds are set up as a 50-50 split: States would still have to pay half the cost of SNAP work development expenses, and they can’t use the match to reduce their own spending on programs.

But the bigger problem is lack of awareness, Vilsack said. States simply don’t know they could have access to these federal dollars. That’s why Vilsack, himself a former two-term Iowa governor, has been calling governors in an effort to convince more states to leverage these federal matching funds. States, he said, “really need to hear from the governor, ‘You know what, we need to do a better job of this.’”

J.B. Wogan is a Governing staff writer.
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