Gov. Bill Lee announces $175M in grants as Tennessee starts to spend reserves for needy families

Tennessee is taking another step to spend down its nearly three-quarters of billion dollars Temporary Assistance for Needy Families reserve.

On Tuesday, Gov. Bill Lee and the Tennessee Department of Human Services announced they issued $175 million in grants from the state's TANF reserves to launch seven pilot programs in hopes of serving low-income families.

The pilot money will be divided into $25 million grants given to the following nonprofits:

• Families Matter in West Tennessee

• The University of Memphis

• Family & Children's Service in Middle Tennessee

• Upper Cumberland Human Resource Agency

• First Tennessee Development District Foundation in East Tennessee

• United Way of Greater Knoxville

• Martha O'Bryan Center in Middle Tennessee

The Tennessee Department of Human Services Commissioner Clarence Carter said the grants were a "down payment" as the state continues to spend the reserve, which at one point hit $740 million.

Carter said the reserve funds are still around $700 million but that it will be spent down to the cap over the next three to five years.

The organizations will receive the money over three years.

The department did not release any details on the specific pilot programs each nonprofit would create, but those organizations are expected to make their own announcements in the future.

"I am very encouraged and inspired by what's happening today," Lee said during the announcement. "Certainly, every Tennessean deserves our best effort."

The saga of Tennessee's TANF reserves

TANF is a program that provides federal grants to states to administer programs to provide temporary assistto families in need. In Tennessee, the program is called Families First and run the Tennessee Department of Human Services.

In October of 2019, The Tennessean first reported that the Beacon Center of Tennessee discovered the state had a massive TANF surplus.

More: Struggling Tennessee families now getting more TANF assistance, but hurdles remain

'It was life-changing': Tennessee set to begin pilot program process aimed at spending massive reserve for needy families

The report found the state had around $740 million in unspent TANF funds. It was one of the largest TANF reserves in the country.

Lee and officials in the Department of Human Services, which administers those federal funds, initially said there was no immediate need to move to spend down the reserve.

But after more reporting on the mismanagement of the funds, the Republican speakers of the House and Senate assembled a group to study the issue and develop recommendations.

Last year, lawmakers passed a law that caps the reserve amount at $191 million, which is one year's worth for money the state receives from the federal government to run the program.

As part of the new law last year, Tennessee's monthly cash benefit for TANF enrollees increased from an average of $277 per family to $387. The state's TANF program, known as Families First, has had one of the lowest cash payments in the nation.

Adam Friedman is The Tennessean’s state government and politics reporter. Reach him by email at [email protected].

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This article originally appeared on Nashville Tennessean: Tennessee announces $175M in grants, starts to spend TANF reserve