The state Senate rejected the proposal Monday in a 17-13 vote.
The bill would have required the state to randomly sample at least 100 adults in a program designed to help them get back into the workforce. There are currently 117 adults enrolled.
Parents could have also been tested if there were probable cause to believe that they were either using drugs or abusing a child.
Opponents questioned the proposal's constitutionality and whether the problem is great enough to warrant spending money on such testing.
Nearly two dozen states are considering similar legislation. The issue has come up in the Republican presidential campaign, with front-runner Mitt Romney saying it's an "excellent idea."
Copyright 2012 The Associated Press.
