It’s time for a raise in Basic Cash Assistance

Written by: Sarah Barnes
Date Posted: January 10, 2020

All Colorado parents want to provide for the basic needs of their children. For families experiencing extreme poverty, income supports help decrease the stress of making ends meet. Diapers, bus passes, school supplies, and housing costs are among the expenses families face—and the costs of those necessities increase each year.

One of the core purposes of the federal Temporary Assistance for Needy Families (TANF) program is to provide basic cash assistance (BCA) to families who are studying, working, or looking for work and experiencing extreme poverty. Colorado legislators will have an opportunity to improve this vital service and support Colorado children.

Families receiving BCA in Colorado, all of whom are raising or expecting a child, are experiencing extreme poverty, which means they are living below half the federal poverty line, or $12,875 a year for a family of four. In 2018, about 65,000 kids in Colorado were experiencing extreme poverty.

BCA is particularly important to families because of its flexibility. While many other anti-poverty programs are dedicated to assisting with specific needs (e.g., child care, health care, housing or food), BCA is one of the few resources that can be used flexibly to meet pressing needs like diapers, school supplies, or car repairs.

BCA does not change with inflation, however, which means that while the cost of living in Colorado has increased since 1996, the amount of BCA for families has not increased accordingly. Despite one-time BCA increases in Colorado in 2010 and 2018, the purchasing power of BCA is less today than it was in 1996.

This legislative session, a bill has been introduced to address this issue. SB20-029 would use federal funds that Colorado receives through the TANF program to increase BCA in Colorado to help close the gap created by the lack of adjustment for inflation, and then implement an annual cost of living adjustment for BCA moving forward so that it does not continue to erode in the future.

We know that experiencing poverty can inhibit early brain development and negatively impact children’s ability to succeed in school and develop social-emotional skills. On the other hand, research also shows that a $3,000 difference in annual income in the first five years of a child’s life is associated with the equivalent of 20 additional points on the SAT exam, a 17 percent increase in the child’s future earnings and 135 additional work hours per year in adulthood.

Colorado families of all backgrounds work hard to provide a better life for their children. BCA is the most targeted approach Colorado can take to reducing extreme childhood poverty, which has a lifelong impact on child well-being.

Stay tuned for more information on TANF, BCA, and SB20-029 in the coming weeks.

Sarah Barnes

About Sarah Barnes

Sarah serves as the Policy Analyst for the Colorado Children’s Campaign. Prior to joining the Children’s Campaign in September 2014, Sarah taught middle school English and worked as an Interventionist at Pioneer Charter School in Denver. She was a 2011 Teach For America corps member. Prior to teaching, Sarah worked as an attorney in Denver in the areas of venture capital, mergers and acquisitions, general corporate and business law, and commercial transactions. Sarah earned a BA in English from Midland University and a J.D. from the University of Michigan.