Health & Welfare | Daily Report

Dani Simmonds

One could argue that California walked away from $550 million in stimulus money meant to benefit low-wage workers and businesses.

One could also argue, though, that the federal government held the equivalent of a door-buster sale advertising $50 televisions without supplying enough televisions to meet demand.

Here's what happened.

One component of the massive and sprawling stimulus package was $5 billion meant to go to state TANF programs, an acronym for Temporary Aid to Needy Families – formerly known as welfare and also called CalWorks in the Golden State.

The money was meant to infuse quick cash to states that were seeing more demand for services than in the past.

And it was meant to go to help struggling families in three ways. One was sort of a "wild card" category, providing money to families with one-time needs such as a bus ticket or car repair to help a job-seeker continue the hunt.

Another use for the money was "basic assistance," or funding meant for low-income families with children.

A third use for the money was a program that allowed TANF officials to subsidize up to 80 percent of the salaries for workers who were having a tough time getting into the labor market. That means some businesses could pay workers $2.50 per hour for services worth $10 an hour. (The stimulus fund kicked in the other $7.50.)

The federal government made cash available to each state in proportion to half of its annual “block grant,” a category of TANF funding.

When the floodgates for the funding opened, California was eligible to spend a whopping $1.8 billion.

When they closed in September, though, California had spent just over $1.2 billion, leaving nearly $550 million untouched.

One of the main reasons California didn’t spend the money? Other states got to it faster. See, the federal government set the combined spending limit for states at $6.7 billion. But it only put $5 billion in the pot.

That means there had to be winners and losers, in terms of who completed the spending spree with an empty wallet and who hit the time limit with money left unspent. You can see how each state did, in terms of spending, here. (And, to be fair, it's worth noting that California had a far larger allotment than any other state.)

Charr Lee Metsker, deputy director of the Welfare to Work Division at the Department of Social Services, said she’s proud of the work the state did in getting the funds into the hands of those who need it.

She said they faced the challenge of following the federal rule of coming up with 20 percent in matching dollars in order to reach into the federal stimulus pot. The budget-embattled state did not help, so state authorities had to be creative in raising the matching funds, she said.

"We attempted to turn every rock, every stone and every potential idea over,” Metsker said. "We consulted with national experts ... asking, 'What else are you doing? Is there something we could be doing and are not doing?'"

But Laura Chick, the state’s inspector general for stimulus funds, said TANF authorities could have done a better job to spend more of the federal funds in California. Particularly, she said, authorities could have been more aggressive in alerting businesses to the opportunity to save 80 percent on the salary for an additional staff member.

Chick’s office found shortcomings in the way San Bernardino County handled its TANF stimulus funds [PDF]. And the inspector general encountered one businessman who was frustrated that he didn’t know about the program in time to take advantage of it.

Chick said the TANF authorities should have done more outreach with chambers of commerce and labor departments to get the word out.

“This is about bringing all the entities together and (doing) better outreach to the business and employer community,” Chick said. “Don’t do the same old, same old. The recovery act was about doing it better.”

The TANF stimulus funding was cut off on Sept. 30 of this year, with virtually all of the $5 billion spent, according to federal data.