Trying to Bring NJ’s Antipoverty Program into the 21st Century

Hank Kalet | July 14, 2017 | Social
Benefits for Work First New Jersey — the state’s welfare program — have been stagnant for 30 years. Legislation has been sent to the governor to address the issue

poor family
The benefits for the state’s primary anti-poverty program have not been increased since 1987. With federal cuts to the social safety net looming, advocates say Gov. Chris Christie needs to step up and sign legislation passed by both houses of the Legislature that would boost benefits to the state’s poorest residents. He has until after the November election to sign or veto the bills, or allow them to take effect without his signature.

The bills expand Work First New Jersey, the state’s welfare program, eliminating a cap on family size and boosting cash payments by 30 percent over three years — from $424 per month to $551 by 2020.

Christie vetoed the bills last year, but Democrats reintroduced them and passed them earlier this month. The governor’s office will not comment on pending legislation, but he line-item vetoed money set aside in the Democrats’ version of the recently enacted budget that would have eliminated the cap, and said in his veto statement last year that the expansion was unnecessary. According to Christie, Work First was combating poverty effectively.

Interpreting the numbers

Advocates, however, say the numbers indicate otherwise, that poverty remains at untenable levels, and that the Work First stipend only pays for about half of what it did the last time it was increased in 1987.

According to Department of Human Services data, 17,582 families — comprising 43,992 individuals, 30,764 of whom were children — received Work First benefits in March, the most recent month for which numbers were available. The report also shows that program enrollment has decreased each month for at least the past two years.

The bulk of cases are in the four-county northeastern part of the state, which accounts for 44 percent of all Work First enrollment. Essex had the largest enrollment, with 3,183 families; Passaic had 2,139 families; Hudson 1,979; and Bergen, 466.

Enrollment in three other counties topped 1,000 families — Atlantic; with 1,309; Camden, with 2,216; and Mercer, with 1,034. Just 23 families were enrolled in Hunterdon County and 70 in Sussex in March.

Advocates not hopeful

Poverty advocates are pressing the governor, both by lobbying his office and by publicly demanding expansion, but they are not hopeful Christie will change his mind. The expectation is that the legislation will need to be reintroduced in January, after a new governor takes office, though they say it is important to keep the pressure on and keep the need for expansion in the public eye.

“There was strong sentiment that we should (wait) because it faces certain veto,” said Jon Whiten, vice president of New Jersey Policy Perspective, a liberal think tank and advocacy group. “But we thought, this has been a problem for 30 years and these are people that politicians in both parties are all too frequently ready to ignore, demonize, or punish. We wanted to make sure it remained on the radar.”

The debate over the bills comes as President Donald Trump and Republicans in Congress attempt to hash out a federal budget. Proposals call for significant cuts to Medicaid, federal nutrition programs, and Temporary Assistance for Needy Families totaling more than $1 trillion over 10 years, along with cuts to education loan programs for the poor and limits on access to Social Security disability programs, according to The New York Times. In addition, the budget blueprint calls for cutting the earned-income and child tax credits by requiring all beneficiaries to have Social Security numbers, according to the Times.

Earning less than poverty level

This only leaves the poor more vulnerable, say advocates. About 11 percent of New Jerseyans earn less than the federal poverty level — $1,589 per month or $20,900 a year for a family of three. Nearly half of them earn less than 50 percent of the federal poverty line. But these figures undercount those in need, because of the state’s high standard of living, advocates argue. The Poverty Research Institute, for instance, says that most families in the state need to earn more than double the federal standard to make ends meet and that about one in four New Jerseyans do not.

“For a person on the ground who is struggling to get by, the cuts are cumulative,” Whiten said. “Because we know that someone in the safety net is often relying on multiple programs — on rental assistance and Medicaid, or SNAP and workforce training. It is hard to assess what that picture is, but it does really go deeper than what we can see based on the numbers, and the numbers themselves are shocking.”

The United Way of Northern New Jersey issued a report in January showing that basic household expenses increased by about 23 percent between 2007 and 2014. The report said the average annual Household Survival Budget for a New Jersey family of four ranged from $55,164 in Hudson County to $81,168 in Hunterdon County, with 37 percent of the state’s households earning less than that. A household survival budget is defined as the costs of housing, childcare, food, healthcare, and transportation.

The ALICE assessment

According to the United Way’s latest report on the poor who fit the definition of ALICE — Asset Limited, Income Constrained, Employed — the number of people in the state living above the federal poverty line but below the survival standard has grown by 29 percent, meaning about 1.2 million New Jersey households are either in poverty or struggling.

“Costs are far outpacing wages for most service jobs and there’s been no way for families to catch up no matter how hard they are working,” United Way ALICE project director Stephanie Hoopes said when the report was released. “What sets New Jersey apart from other states is our high cost of living. This leaves ALICE families with impossible choices.”

Jim Zullo, executive director of Elijah’s Promise Soup Kitchen in New Brunswick, said the federal cuts are likely to make a trying situation worse.

“Over last two years, we’ve seen a pretty steady increase need for meals at the community kitchen,” he said.

“A lot of the people who come to our kitchen, they have lots of types of needs,” he said. “There are seniors, people with mental health issues, addiction, but there also are the working poor — and it is expensive to live in New Jersey. They need additional food assistance so they have money for other things.”

One piece of the puzzle

Food assistance is only one part of the puzzle, however. Renee Koubiadis, executive director of the Anti-Poverty Network, said each cut to an individual social safety-net program is likely to affect other programs. For instance, if someone loses their Medicaid, they may have to choose between paying for a doctor’s visit or a prescription and paying a utility bill or buying food.

“When we talk about solutions and supporting people, we need to be comprehensive and think about all the basic needs a family has,” she said.

Legislative fixes

The two bills passed by the Legislature attempt to address this by increasing benefit levels by 30 percent over three years and eliminating a cap on family sizes.

Assembly Bill A-31 passed the Assembly 48-24 with two abstentions and the Senate 26-14 — short of a veto-proof majority. (It takes 54 votes in the Assembly and 27 in the Senate to override a gubernatorial veto). Benefit levels under the bill rise from the current $424 per month for a family of three to $466 a month in the first year, $509 the second year, and $551 in the third. Benefits would then increase annually at the same rate that Social Security benefits increase.

Assembly Bill A-33 passed 51-20, with three abstentions, and 22-14. It ends a 25-year practice of capping family sizes under Work First. Under current law, payments are tied to the size of a family when it enrolls in the program, meaning a family of three would not see an increase in benefits if the mother had another child.

Christie said last year when he vetoed the bills that there would be “substantial budgetary impacts that go beyond Fiscal Year 2017.” He said the state offers a “maximum benefit (that) is higher than that in Pennsylvania and Delaware,” and that the legislation “fails to recognize the plethora of assistance available in addition to Work First New Jersey cash benefits.”

Backers of the legislation say the governor is both overplaying the budgetary impacts and underplaying the effectiveness of the state’s current safety net programs.

The OLS analysis

According to the Office of Legislative Services, the bill is expected to cost an additional $10.9 million during fiscal 2018, $20.7 million in fiscal 2019, and $29.4 million in fiscal 2020. The fiscal year runs July 1 to June 30.

While the state could use federal money to pay for the increase, doing so would make less money available for other TANF programs, the OLS said.

“(F)ederal TANF funding is provided in the form of a block grant, so any federal funds used to support cash assistance benefits would be unavailable for other TANF-related spending, such as child care or emergency assistance,” it said in a fiscal statement issued on the bill.

Advocates expect the increase in benefits to also result in an increase in eligibility — the two are linked with the maximum income allowable set at 150 percent of the cash benefit amount.

“There are less people eligible today,” because more people exceed the current maximum income levels, Koubiadis said. “We have the lowest number on Work First now that we’ve had, because if benefit rate doesn’t go up the eligibility does not go up.”

“We have had stagnant wages in this country since the 1980s, and the great recession only exacerbated that when it caused us to lose middle- and high-wage jobs and to replace them with low-wage work,” Koubiadis said. “To work toward self-sufficiency on TANF is nearly impossible when jobs are not there that pay a living wage.”

The Work First increase is part of an initiative the Democrats have called a comprehensive effort to “to combat poverty and rebuild New Jersey’s middle-class.” The effort was launched in February 2016, and has included hearings on social services, housing, and transportation. The goal, Democrats said, was to rebuild the social safety net. Bills calling for increases in the minimum wage and an expansion of the paid family-leave program are part of the larger effort, as is a push for more affordable housing.