When kids experience extreme poverty, it can have lifelong impacts on their health and well-being. It is critical that families living far below the poverty line receive the support and resources they need to ease the challenges they face in reaching economic security and prosperity. Even before the pandemic, Colorado families in extreme poverty were struggling to make ends meet – and they are likely still the furthest from economic recovery. The Temporary Assistance for Needy Families (TANF) program helps families experiencing extreme poverty with household income and stability by providing financial assistance. Colorado’s TANF program is known as Colorado Works.
Despite increases in unemployment and economic hardship over the course of the pandemic, TANF caseload numbers in Colorado have declined. This indicates that the program has not been sufficiently responsive to families’ needs throughout the pandemic. The TANF program can also be difficult for families to navigate. More must be done to communicate with eligible families – making outreach accessible in multiple languages and facilitating direct engagement with enrolled families during decision-making processes is vital to ensuring TANF participants are on the road toward economic security.
Prior to the legislation passed during the 2022 Colorado legislative session, Colorado’s TANF statute had not been meaningfully updated in roughly 15 years. Basic cash assistance (BCA) for families through the program has not kept up with the rate of inflation and the high-and-rising cost of living in Colorado. BCA is the most targeted approach Colorado can take to reducing extreme poverty, which has a lifelong impact on child and family well-being.
The Colorado Children’s Campaign, in collaboration with the TANF Coalition, recently led efforts to pass legislation to improve Colorado Works. The TANF Coalition is made up of over 30 regular members including advocates, service providers, and directly-impacted individuals. Important recent investments in Colorado’s TANF statute include:
- HB22-1259 (Duran & Jodeh/Moreno) Modifications to Colorado Works Program updates and improves the Colorado Works program so that families can fully benefit from its support. The bill increases BCA and implements an annual cost of living adjustment to ensure that BCA keeps up with inflation and the rising cost of living. It also makes a number of programmatic changes, including reducing punitive penalties, establishing an outreach and engagement plan, and requiring more family participation throughout the regulatory process.
- SB20-029 (Fields & Moreno/Coleman & Duran) Basic Cash Assistance for TANF Families ensured that families enrolled in Colorado Works received additional money in their pockets to help weather the immediate effects of the crisis caused by the COVID-19 outbreak through an additional one-time payment.
Child Tax Credit
Tax reforms that prioritize kids are a crucial step toward eliminating child poverty and increasing economic, health, and overall wellbeing for families. The Child Tax Credit (CTC), along with the Earned Income Tax Credit, lifts more children out of poverty than any other program that is currently available. The CTC places money directly back into families’ pockets. This helps with necessities like housing, food, school supplies and clothing. It also helps families with young children afford the cost of child care, which supports children’s healthy development and allows parents to work.
The American Rescue Plan passed by Congress in March 2021 made temporary changes to the federal CTC that benefitted millions of families, including increasing the payment amount, issuing the payment monthly, and making the credit fully refundable so that families with the lowest incomes could benefit. These expanded CTC payments lifted an estimated 3.7 million children out of poverty nationally, and their families used the payments to buy food, rent, utilities, clothing and other necessities.
The expanded CTC expired at the end of 2021 after Congress failed to extend it. The original CTC is still in place and is one of the most effective tools we have to fight child poverty. However, we must advance policies like the expanded CTC that show our collective commitment to providing the best chance for every kid to thrive and demonstrate our values of equity for every Colorado family.
Every family has the right to an adequate income that allows them to live with dignity. This includes the stability to withstand sudden loss of employment or unexpected financial challenges, and that allows them to sustain a basic standard of living while building wealth. Research increasingly shows that direct, unrestricted cash payments to families is one of the most effective tools to support wellbeing and the move toward economic prosperity. The pandemic provided some examples of the power of direct cash assistance, including stimulus payments and payments through the expanded Child Tax Credit.
Guaranteed income is a model of direct cash assistance that prioritizes lifting families out of poverty and mitigating income inequality, caused by long standing racial inequities in our society that create more barriers to economic prosperity for families of color. Guaranteed income should function as a component of a comprehensive system of support for families’ economic stability and prosperity, supplementing other programs that benefit families rather than replacing them.
Adequate income for families means that children grow up in predictable, stable environments with connections to responsive caregivers. We have an opportunity to reimagine our economy as one that centers families who are facing the greatest barriers to economic prosperity and wealth so that every family can thrive.