Report on South Dakota’s Reduction of TANF Benefits and Implications for Sustainable Development Goals

Executive Summary

In a decision with significant implications for progress on the Sustainable Development Goals (SDGs), the state of South Dakota will implement a 10% reduction in Temporary Assistance for Needy Families (TANF) benefits, effective August. This policy, approved by the legislative Rules Review Committee, marks the beginning of a multi-year strategy of benefit reductions that directly challenges the principles of SDG 1 (No Poverty), SDG 2 (Zero Hunger), and SDG 10 (Reduced Inequalities). The cuts will reduce monthly financial support for low-income families, impacting their ability to afford basic necessities and increasing their vulnerability to poverty and food insecurity.

Details of the Policy Change and Financial Impact

The South Dakota Department of Social Services’ plan was approved by a 4-2 vote, initiating immediate and future fiscal changes.

• Benefit Reduction: TANF recipients will experience a monthly loss ranging from $32 to $136, contingent on family size.
• Average Household Impact: The average recipient household will lose $51 per month in assistance.
• State Savings: The reduction is projected to save the state approximately $1.5 million annually from its previous fiscal year distribution of $15.3 million.
• Long-Term Strategy: Department Secretary Matt Althoff stated this is the first step in a gradual reduction plan, intended to eventually reach a 35% total cut in benefits. This long-term plan would result in an average household losing $180 per month.

Alignment with Sustainable Development Goals (SDGs)

The policy’s implementation runs counter to several key SDGs aimed at creating a more equitable and sustainable future for all.

SDG 1: No Poverty & SDG 10: Reduced Inequalities

The primary objective of TANF is to provide a financial safety net for the most vulnerable families. The approved cuts directly undermine this purpose.

• The reduction of disposable income for low-income families actively works against the goal of eradicating poverty in all its forms.
• By targeting assistance for needy families, the policy risks widening the economic gap and exacerbating hardship, in direct opposition to the goal of reducing inequality.
• Opponents of the measure, including Cathy Brechtelsbauer, argued against the principle of balancing budgets by reducing support for children and families in poverty.

SDG 2: Zero Hunger & SDG 3: Good Health and Well-being

Reduced financial assistance directly impacts a family’s ability to secure adequate nutrition and maintain a healthy living environment.

• With less money for groceries, families may face increased food insecurity, a critical challenge to achieving Zero Hunger.
• While Secretary Althoff noted that 97% of TANF households also receive SNAP benefits, the reduction in flexible cash assistance limits a family’s ability to cover all nutritional and essential needs.
• Financial stress is a known contributor to poor physical and mental health outcomes, making the cuts a potential setback for SDG 3.

SDG 8: Decent Work and Economic Growth

TANF assistance is conditional on caregivers searching or training for employment. The reduction in this support system can create barriers to achieving stable employment.

• A stable financial foundation is crucial for individuals to successfully engage in job training and secure decent work.
• Reducing this support may impede the transition from welfare to work, thereby hindering progress toward productive employment for all.

Associated Rule Change: Kinship Care and Institutional Frameworks

A concurrent rule change alters the support structure for families caring for child relatives removed from their homes by the state’s child welfare system.

1. TANF Eligibility Removed: These kinship caregivers will no longer be eligible for TANF benefits.
2. Incentivizing Licensed Care: The department’s stated goal is to encourage these caregivers to become licensed kinship providers, a pathway established in May.
3. Contrasting Support Levels: Licensed kinship care provides a significantly higher subsidy (approximately $685 to $822 per month per child) but requires caregivers to meet formal training requirements not necessary for TANF.

This change relates to SDG 16 (Peace, Justice and Strong Institutions) by attempting to formalize and strengthen the institutional support for children in kinship care. However, by removing a more immediate and lower-barrier form of assistance (TANF), it may inadvertently create a support gap for families unable to navigate the licensing process, challenging the goal of ensuring effective and inclusive institutions for all.

Legislative Context and Opposition

The decision was contentious, revealing a disconnect regarding legislative intent.

• Democratic committee members argued that legislators on the budget committee were not aware that a $5.3 million state funding cut would be covered by reducing benefits, believing it would be offset by unused federal funds.
• The department’s plan uses only $3.8 million of unused funds, with the remainder covered by the 10% benefit cut.
• Republican committee members deferred to the department’s authority in managing program funds, with Sen. Taffy Howard stating that the legislature does not manage the “minutia of running programs.”

SDGs Addressed in the Article

• SDG 1: No Poverty – End poverty in all its forms everywhere.
• SDG 10: Reduced Inequalities – Reduce inequality within and among countries.
• SDG 2: Zero Hunger – End hunger, achieve food security and improved nutrition and promote sustainable agriculture.
• SDG 16: Peace, Justice and Strong Institutions – Promote peaceful and inclusive societies for sustainable development, provide access to justice for all and build effective, accountable and inclusive institutions at all levels.

Specific SDG Targets Identified

1. SDG 1: No Poverty

   • Target 1.3: Implement nationally appropriate social protection systems and measures for all, including floors, and by 2030 achieve substantial coverage of the poor and the vulnerable.
     
     The article directly discusses the Temporary Assistance for Needy Families (TANF) program, which is a “federal-state program most commonly used to provide financial assistance to low-income families with children.” The decision by the state Department of Social Services to reduce these benefits by 10% is a direct policy change to a social protection system affecting the poor and vulnerable. The plan to “gradually reduce benefits each year… until South Dakota reduces benefits to the minimum state contribution” further highlights the relevance of this target.

2. SDG 10: Reduced Inequalities

   • Target 10.2: By 2030, empower and promote the social, economic and political inclusion of all, irrespective of… economic or other status.
     
     The policy change specifically targets “low-income South Dakota families,” a group defined by their economic status. Reducing their financial assistance can hinder their social and economic inclusion by making it harder to afford necessities like “gas, groceries, utilities and rent.”
   • Target 10.4: Adopt policies, especially fiscal, wage and social protection policies, and progressively achieve greater equality.
     
     The article details a change in a social protection policy (TANF). The reduction in benefits for low-income families, while other groups are unaffected, represents a fiscal policy decision that works against the progressive achievement of greater equality.

3. SDG 2: Zero Hunger

   • Target 2.1: By 2030, end hunger and ensure access by all people, in particular the poor and people in vulnerable situations… to safe, nutritious and sufficient food all year round.
     
     The article explicitly states that the TANF benefits are used for necessities including “groceries.” A reduction in these benefits, from “$32 to $136 a month,” directly impacts a family’s budget for food, thereby threatening their access to sufficient food. The fact that “97% receive Supplemental Nutrition Assistance Program funds” already indicates their vulnerability to food insecurity, which this cut could exacerbate.

4. SDG 16: Peace, Justice and Strong Institutions

   • Target 16.6: Develop effective, accountable and transparent institutions at all levels.
     
     The article highlights a conflict in institutional accountability. Democrats on the committee argued that “lawmakers were not aware of the reduction in benefits when they prepared the state’s budget” and that “the plan was a misrepresentation of legislative intent.” This points to a breakdown in the transparency and accountability of the process between the legislature and the state Department of Social Services.

Indicators for Measuring Progress

1. Target 1.3 (Social protection systems)

   • Indicator: Proportion of the population covered by social protection systems and the average value of benefits.
     
     The article provides specific financial data that can serve as an indicator of the level of social protection. This includes the “10% reduction” in TANF benefits, the specific monetary loss for families (“$32 to $136 a month”), the average household loss (“$51 a month”), and the planned future reduction to “a 35% reduction.” These figures directly measure a change in the value of social protection benefits.

2. Target 10.4 (Social protection policies)

   • Indicator: Value of social protection transfers.
     
     The article provides aggregate financial data that can be used as an indicator. It states that the state “distributed $15.3 million in TANF benefits last fiscal year” and that the cut will result in savings of “about $1.5 million annually.” This shows a quantifiable reduction in social protection transfers as a component of fiscal policy.

3. Target 2.1 (End hunger)

   • Indicator: Affordability of necessities.
     
     While not a formal SDG indicator, the article implies this can be measured. The reduction in funds available for “groceries” is a direct indicator of reduced capacity to afford food. The specific amounts, such as the average loss of “$51 a month,” can be used to measure the impact on a family’s food budget and thus their food security.

SDGs, Targets, and Indicators Analysis

Source: siouxfallslive.com