Study: State economy has hurt progress for welfare families

HELENA - Worsening economic conditions in Montana have undercut the ability of those on welfare to find jobs and get off public assistance, a new study of the state's welfare programs shows.

The report, released Friday, shows one of four families on welfare when Montana overhauled its system in 1996 had managed to become financially self-sufficient six years later.

At the same time, three-fourths of families were unable to achieve that goal and the number of those that didn't even come close to financial independence grew over the past two years.

''It's not encouraging that a program designed to promote self-sufficiency hasn't succeeded for a fairly substantial number of people and that number has gone up,'' said Hank Hudson, who heads the Human Community Services Division in the Department of Public Health and Human Services.

The state's lackluster economy is part of the reason its welfare program hasn't achieved better results, the study said. It blames a declining economy for a rising number of welfare cases and budget limits imposed on the programs.

But that's no excuse, Hudson said. ''It can't be all laid on the economy. We need to move people up the ladder regardless of the economy.''

Of those surveyed, six of 10 were employed last year and nearly a third had not worked in the past year, the report said.

Yet those were worse numbers than two years earlier when seven of 10 were working and just 11 percent were jobless.

''The lower employment rate of family heads (of household) in 2002 is consistent with national trends,'' the report said. ''It nonetheless suggests many poor families in Montana have been experiencing financial difficulties.''

While those lucky enough to have jobs were making more money and more likely to be working full time than two years earlier, fewer had health insurance coverage through their employers, the study found.

The study, conducted by Abt Associates Inc. of Bethesda, Md., focused on Families Achieving Independence in Montana, a program known as TANF that provides cash payments to poor families. The program includes incentives for people to find jobs and get off welfare.

The study surveyed 1,090 families that had used the program beginning in February 1996 when the welfare overhaul began.

It measured the ability of the families to become financially self-sufficient, defined by the state as having an annual income above the federal poverty level, health insurance coverage and no longer receiving welfare money. The poverty level at the conclusion of the study was $18,100 for a family of four.

Over the last two years of the study, it found the proportion of welfare families who made it to solid financial footing grew from just 9 percent to 24 percent. But those families considered nearly self-sufficient dropped sharply from 33 percent to 8 percent.

Hudson said slightly more than half of those no longer in that category improved their financial status, while the remainder deteriorated. While 58 percent of the families were not even close to self-sufficiency in 2000, that grew to 68 percent by last year.

Eight of 10 families that had become self-sufficient after four years were still in that condition two years later. The rest were back on welfare with incomes below the poverty level.

Of those families on welfare in 2000, three-fourths were still on the rolls last year, the study said. Typically, those unable to stay employed did not better their financial condition, it said.

Although TANF has been under pressure from increased caseloads and a tight budget, that doesn't mean radical changes are needed, the report concluded. The program has promoted the self-sufficiency of welfare families even during tough economic times, it said.

Hudson said he foresees some adjustments as a result of the study.

More has to be done to provide health insurance to the poor, and those on welfare need to be found jobs that can survive economic downturns, he said. Hudson also suggested officials may have to reconsider whether welfare recipients would benefit from less job training and quicker employment.