$60 million federal welfare dollars NOT given to the needy

Court: $60 million can't go to needy
Justices reject Cuyahoga lawsuit over welfare money

Nochols, Jim. Cleveland Plain Dealer, Dec. 28, 2006, pg. B2.

The Ohio Supreme Court nixed a lower court's award of $60 million to the state's poor, ruling Wednesday that the state did nothing wrong by applying federal welfare dollars to balance the budget.

The justices unanimously spiked a 2001 lawsuit in which Cuyahoga County commissioners accused Gov. Bob Taft's administration of orchestrating "an elaborate and illegal funding scheme" to solve a $1.8 billion budget shortfall by "turning their back on the neediest citizens of Ohio."

The commissioners sued on behalf of all 88 Ohio counties, contending the state breached its contract with the county and broke state and federal law by not passing the federal funds down to local agencies serving the disadvantaged. The county prevailed at trial in 2004 and in the 8th Ohio District Court of Appeals last year. So Wednesday's ruling was a crusher, said Cuyahoga County Administrator Dennis Madden.

"The county is disappointed in the outcome, and we still believe the court of appeals was correct in granting us relief," Madden said.

The Supreme Court properly saw that the state had discretion over how to allocate the federal dollars, Ohio Department of Job & Family Services spokesman Jon Allen said Wednesday.

State lawyers contended the state earlier had tapped the general fund, which is the state's main checkbook, to pay setup costs for a range of state and county welfare-to-work programs across Ohio. The $60 million transfer, they argued, was payback – akin to an employer reimbursing a worker for travel expenses, with no strings attached to the reimbursement dollars.

The Supreme Court agreed. The state had discretion to spend the money as it saw fit, the justices ruled. Cuyahoga County had no right to sue because it couldn't prove it was even entitled to the disputed money, much less deprived of anything by the budget shuffle.

The lawsuit sought to force the state general fund to transfer $60 million back to a Job & Family Services fund designed to help county or state agencies lift needy children and families off welfare. When the appeals court sided with the counties last year, Cuyahoga County officials predicted an infusion of $5 million into welfare-to-work programs here.

Ohio was drowning in red ink in 2001 when the legislature and Taft collaborated on a two-year budget that shifted more than $260 million from a federal welfare-money block grant into other programs.

The $60 million chunk in dispute went to the general fund from a Job & Family Services social-welfare account called Title XX. The budget shifted most of the rest of the federal block grant to Head Start, a preschool program for low-income children, and steered some to summer-school classes, sex-education courses and Boys and Girls Clubs and other programs the state had subsidized.