Minnesota's neediest families to see first MFIP cash increase in 33 years

It was 1986 when Lt. Gov. Peggy Flanagan's mom turned to the state's family welfare program for help. Flanagan was 6 years old at the time, and her mother qualified for $437 a month.

Three decades later, a fast-food worker like Mary Spaulding and her son receive the exact same amount of assistance: $437 a month.

Minnesota has not increased its cash assistance for low-income families in 33 years, longer than any other state in the nation. Meanwhile, federal funding intended to aid those families has been channeled into other areas of the state budget.

That will change in February, when approximately 31,000 families who get money through the Minnesota Family Investment Program (MFIP) will receive $100 more per month. Lawmakers agreed this legislative session to shift $33 million to MFIP, after years of stories from parents and nonprofits about how Minnesota was ignoring the program intended to help some of its poorest families.

The increase is meaningful, but it's still not enough for people who are struggling to pay rent and raise children, said Spaulding, who lives in St. Paul Park. She works at McDonald's and said she often has to make hard choices as she tries to stretch the money.

Should she pay all her rent or keep the lights on in her home? If her 8-year-old has a growth spurt, how long can she wait before buying him clothes?

The problem is not just confined to the Twin Cities and its higher cost of living.

Duluth resident Toshieka Washington also receives MFIP benefits and is constantly weighing what she can afford for her two boys.

She has seizures and is struggling to find the right medication to control them so she can work. She lives in Steve O'Neil Apartments for families experiencing long-term homelessness. It is nearly impossible to find an affordable home for three people, she said, even with the $100 MFIP increase and the $110 she gets in state housing assistance.

"Families are still going to struggle," Stephanie Hogenson, outreach director at Children's Defense Fund-Minnesota, said of the $100 increase. "And they are still going to have to choose between rent and new shoes and, heaven forbid, a tire on their car pops."

Minnesota should reform the program with regular cost-of-living adjustments of 1 or 2% so another couple of decades do not pass without an increase, said Jessica Webster, a staff attorney at Mid-Minnesota Legal Aid.

Department of Human Services Commissioner Tony Lourey and Flanagan both said a cost-of-living adjustment could be discussed in the future.

Despite the decadeslong stagnation of MFIP, the state gives significantly more federal dollars to families through cash assistance than the national median. As of July 2018, Center on Budget and Policy Priorities data show a family of three was getting $82 more in Minnesota than the nationwide median.

While the state is comparatively generous, Spaulding said it's important to look at how the money for needy families falls far short of the federal poverty guidelines.

After the increase in February, a family of three that receives both MFIP and state housing assistance will get $742 a month, Lourey said. That's 42% of the poverty guideline and is under the threshold at which someone is considered to be living in "deep poverty."

"Low-income families can't go another 33 years at this level," he said.

States started getting creative with the federal welfare money they receive through the Temporary Assistance for Needy Families (TANF) program as the economy slowed in 2000, said LaDonna Pavetti, who analyzes income support programs for the Center on Budget and Policy Priorities.

Minnesota's use of the federal welfare money isn't "egregious" like some other places, she said. Michigan, Hawaii and other states diverted dollars to unrelated purposes, including college scholarships that sometimes go to middle-income students, Pavetti said. Minnesota moved the money to other assistance programs.

For example, the state transferred $25.5 million of TANF money to a working family tax credit in 2018, according to state Department of Human Services data. In doing so, Pavetti said, Minnesota left behind MFIP families who tend to be between jobs or in very low income positions.

Minnesota will stop moving the federal dollars to the tax credit program next year.

"There have been hundreds of millions of dollars moved out of TANF and into other places," Webster said. "And so this was kind of a first step in clawing back some of those federal funds that are supposed to go to families for basic needs."

Last year less than a third of the $260 million in TANF money Minnesota received went to basic cash assistance for families. That's something Webster with Legal Aid and others have long been trying to change.

"Low-income advocates across the country have been very upset, and rightfully so, about state approaches to refinance TANF and take it away from that core purpose," Lourey said.

Flanagan said this was the year to address the issue in Minnesota, in part because advocacy had reached a critical mass. Also, she noted, there were a number of people at the state budget negotiating table this legislative session — including herself — who were focused on welfare.

The MFIP increase had bipartisan support. It helped that there was a designated federal funding source, said Sen. Jerry Relph, a Republican from St. Cloud who sponsored the Senate version of the bill. He said he has been wary of state spending on a number of other health and human services programs but believes the family welfare program is relatively well-monitored.

"This is an appropriate expenditure, provided we keep track" of the money, he said.

Flanagan described the $100 increase as an investment in future generations. Of the tens of thousands of people who benefit from the assistance, 72 percent are children, according to the state Department of Human Services.

"When we increase family income, we improve child outcome," Flanagan said.

For Spaulding, the effect is more concrete. It means when her 8-year-old ruins his shoes, she can buy him a new pair.

Jessie Van Berkel • 651-925-5044