Virginia: Stinginess Amid Wealth

By Steven L. Myers

Vol. 18, No. 1, 1996 pp. 5-6

Despite its relative wealth, Virginia spends far less to assist its poor citizens, most of whom are children, than most other states. During the 1980s, the income disparity between rich and poor families was more pronounced in Virginia than in any other state. The average annual income of the top fifth of Virginia’s families increased nearly $21,747 while the average annual income of the bottom fifth actually fell $1,813. By the end of the decade, Virginia had the eighth largest income disparity between rich and poor families in the United States.

Only seven states have average annual family income greater than Virginia’s but Virginia’s average monthly welfare payment ($277 for a family with two children) ranks only thirty-sixth in the country. As a result of Virginia’s failure to adjust for inflation, the maximum welfare payment for a family of three in Virginia actually lost 58 percent of its value from 1970 to 1994.

Today, welfare payments in Virginia provide less than 30 percent of the income needed to escape poverty. Even when other benefits, such as food stamps, are taken into account, most welfare families in Virginia are forced to survive on assistance totaling less than two-thirds of the federal poverty line.

In theory, most welfare recipients in Virginia have long been required to participate in employment activities. In fact, however, Virginia has funded employment services, including education, job skills training and child care, necessary to make participation possible for only about one-half of those welfare recipients for whom participation is supposed to be mandatory. Although politicians have mastered the “hot button” rhetoric of welfare reform, few have squarely faced the cost of reforms and their impact on working poor families struggling to get by without welfare. During [1996] debate, proponents of the a welfare reform legislation that became law in Virginia a promised to more than double the number of welfare. During [1996] debate, proponents of the welfare reform legislation that became law in Virginia promised to more than double the number of welfare recipients working or participating in “workfare” or other employment activities; however, thus far, the budget for child care for welfare recipients has been increased by less than two-thirds. No one has yet explained how the resulting “child care gap” will be filled, but additional funding (at least $6.7 million per year) will be required before welfare reform can be fully implemented.

The consequences of inadequate child care funding would be ominous not only for current welfare recipients, but also for former recipients and the working poor. After one year of transitional child care assistance, former welfare recipients working in low-wage jobs will be forced into a subsidized child care system for the working poor which is already swamped by excess demand. In recent years, waiting lists for subsidized child care for the working poor have swelled to more than thirteen thousand children statewide. In some localities, working poor families must now wait years for child care services. If former welfare recipients are given priority for limited subsidized child care funds, working poor families denied child care subsidies may be forced into the welfare system. On the other hand, if the subsidized child care system for the working poor cannot accommodate them, many former welfare recipients will be forced back into the welfare system. In either case, after a temporary decline, the number of Virginians dependent on welfare will once again increase, and welfare reform will have failed.

Budget cuts considered each year also reflect little understanding of the relationship between welfare re-form and the working poor. Because part-time and low-wage jobs often do not include health insurance benefits, the prospect of losing Medicaid coverage deters welfare recipients from accepting employment. Although moving welfare recipients into jobs is a major goal of welfare reform, the governor proposed a budget amendment which would have eliminated Medicaid coverage for thirty-six thousand teenage children in working poor families. While the General Assembly defeated this proposal, similar proposals may be considered again next year. Such cuts would undermine welfare reform by forcing many working poor families onto welfare in order to secure health care for their children.

As the debate on welfare reform continues, Virginians must measure extravagant claims against the reality of limited funding. If we are serious about reforming the welfare system, we must support leaders who have the integrity to confront the cost of effective reforms honestly.