Chairman Wells and members of the Committee, thank you for the opportunity to speak today. My name is Katie Kerstetter, and I am a Research Associate with the DC Fiscal Policy Institute. DCFPI engages in research and public education on the fiscal and economic health of the District of Columbia, with a particular emphasis on policies that affect low- and moderate-income residents.
DCFPI is also an ally of the Fair Budget Coalition, which brings together more than 65 human and legal services providers, consumers, advocates, faith organizations, and concerned community members to advocate for a comprehensive, integrated and adequately funded approach to meeting the human needs of all residents of the District of Columbia, particularly those with low and no income. Recently, the Fair Budget Coalition released its Fiscal Year 2009 budget recommendations, and I am here today to testify in support of the recommendation to increase DC’s Temporary Assistance for Needy Families (TANF) cash assistance benefit.
More than 15,000 families in DC receive TANF benefits. Despite increases in each of the past two years, DC’s TANF benefits are still falling short.
- TANF benefits leave families well below poverty: The maximum TANF benefit of $427 per month for a family of three equals 29 percent of the federal poverty line. Monthly TANF and food stamp benefits are $827 for a family of three or 56 percent of the poverty line.
- DC has one of the highest costs of living in the nation, yet maximum TANF benefits are far higher elsewhere. Maryland, which has a lower cost of living, provides a monthly benefit of $565. The maximum TANF benefit for a family of three in other high-cost cities is $618 in Boston, $691 in New York City, and $723 in Los Angeles.
- Without adequate benefits, TANF families struggle to pay for housing and to maintain household stability. More than one-third of DC TANF families receive no housing assistance. The $427 cash grant for a family of three is not enough to secure decent housing in DC, where the Fair Market Rent is about $1,300 a month for a 2-bedroom apartment.
We recommend that the Council adopt a multi-year plan to increase TANF benefits, with a minimum goal of matching Maryland’s benefit levels, which equal $565 per month for a family of three. As a first step, we recommend a $10 million increase in TANF benefits in the FY 2009 budget. This would increase the maximum benefit for a family of three from $427 to about $490 a month.
Increasing TANF benefits will help to improve many District families’ quality of life and may also decrease child neglect and the need for new foster care placements. Studies predict that a ten percent increase in TANF rates will reduce neglect by more than thirty percent and reduce the need for new foster care placements by about 8 percent. The District’s Grandparent Caregivers Pilot Program, which provides financial support to limited-income grandparents raising grandchildren, demonstrates that additional financial supports can help to prevent abuse and neglect. Children who participated in the program were at least four times less likely to be removed from their homes due to abuse or neglect than those who were eligible but did not participate.
I would like to recognize the Council for taking the important step of including TANF benefit increases in the past two budgets and encourage Council members to continue this commitment in the FY 09 budget. Thank you for the opportunity to provide testimony, and I am happy to answer any questions you may have.
 Economic Policy Institute, Basic Family Budget (2005), http://www.epi.org/content.cfm/datazone_fambud _budget. Maryland’s cost of living for a family of three ranges from $2,513 in Cumberland to $4,163 in Columbia. DC’s cost of living for a family of three is $4,741 per month.
 Christina Paxson and Jane Waldfogel, Work, Welfare, and Child Maltreatment, at 4 (1999), http://www.princeton.edu/~rpds/downloads/paxson_child_maltreat.pdf; see also Christina Paxson and Jane Waldfogel, Welfare Reforms, Family Resources, and Child Maltreatment, at 16 (2001).
 This statistic is developed by comparing the rate of removal of Grandparent Caregivers Pilot Program participating children with the conservatively estimated rate of removal of non-participating but financially eligible children. More information available upon request.