Among the most important pieces of legislation this year was the Tennessee Opportunity Act, which establishes a long overdue, responsible and responsive approach to administering Tennessee's annual federal block grant of Temporary Assistance for Needy Families dollars. Key provisions of the bill which we championed will establish a reasonable TANF reserve, deploy the funds to where the need is, and through rigorous evaluation will ensure we ultimately scale up what works to promote family self-sufficiency and depart from low-performing options.
In late 2019, when a Beacon Center report revealed that Tennessee's regular underuse of the annual TANF block grant had led to a $732 million unspent balance, Speaker Cameron Sexton and Lt. Gov. Randy McNally had the wisdom to establish a working group to assess the program and identify ways to make it more effective and accountable.
As two of the legislators on the working group, we became clear that improving the TANF program would include maintaining a reasonable unspent balance for "rainy days" but that deploying the federal TANF block grant more fully going forward would also be important. It was also quite clear that how well Tennessee uses funds will prove more important than how much is spent.
In working with the Lee Administration, members of the working group chaired by Rep. Bryan Terry, and the nonprofit community, especially Tennesseans for Quality Early Education (TQEE), we are pleased to have supported sweeping strategic changes to our state's TANF program.
Thanks to legislation, there is established an ongoing TANF reserve balance of $191 million - a year's worth of block grant dollars. This approach is consistent with Tennessee's fiscal conservatism and will position us in the top tier of states' TANF reserves. Being nimble to economic conditions is important, and this change enables Gov. Lee and his successors to have flexibility to draw down on the reserve in the case of state-declared emergencies or if the unemployment rate becomes a concern. Following any such use, replenishing the fund balance will be required.
A likewise significant part of the legislation will strategically deploy $182 million of Tennessee's $700+ million unspent balance for the Tennessee Opportunity Pilot initiative. Through the pilot, six communities will be awarded up to $25 million each over three years to implement locally driven, evidence-informed initiatives to strengthen families and promote economic self-sufficiency. Key to the pilot program is that it will include a rigorous evaluation by a third party, as well as oversight by an advisory board working with Tennessee Department of Human Services to review and approve applications, track performance and make recommendations for future TANF spending. It is our intention that Tennessee more rigorously measures TANF investments, scales up what works, and departs from low-performing options.
As for the annual block grant, this legislation ensures future funds other than the rainy day balance are fully allocated and that those funds are deployed in counties throughout the state proportionally to their share of children in poverty. This approach will ensure that money regularly gets to where the need is - equitably across urban, rural and suburban communities.
Our work with the Lee administration and the nonprofit community to develop these changes was a true collaborative effort and exemplifies how the legislative, executive and nonprofit communities can responsively and responsibly invest to improve the quality of life for Tennesseans.
Sen. Bo Watson, R-Hixson, and Rep. David Hawk, R-Greeneville, are members of the 112th Tennessee General Assembly.