Feds, DHHS give clear ‘no’ to TANF being used for childcare workforce grants

After more than a year of debate, New Hampshire childcare providers received a direct answer this week on childcare workforce grant funding. 

In a series of letters exchanged between federal officials, state officials, and an advocacy group, it has been determined that federal Temporary Assistance for Needy Families, or TANF, dollars cannot be used to fund the childcare workforce grant and that Child Care and Development Fund dollars cannot be used either. 

In the state budget passed in June 2025, the Legislature appropriated $15 million in TANF funds spread over two years to pay for a workforce grant program aimed at improving New Hampshire’s childcare capacity and availability issues. The grant would help childcare programs recruit and retain employees through sign-on bonuses, health savings accounts, childcare tuition discounts, and more. 

However, issues with this funding method arose after the federal government denied the use of TANF funds in October, stating that applying the funds to child care recruitment and retention did not fall under the statutory uses of the TANF program. Some state officials and childcare advocates thought the answer from the Administration of Children and Families, the federal office that oversees childcare funding, was vague, and have been looking for clarity ever since.  

TANF is a federal program designed to help low-income families achieve economic security and stability. States receive federal TANF grants every year to go toward programming to help achieve TANF’s purposes. The state receives its annual award, and under federal law, 30% of funds can be transferred to a state’s Child Care and Development Fund account, the source of money for state childcare initiatives like the scholarship fund and Granite Steps for Quality. 

Over the past year, various arguments circled the State House on whether and how TANF funds could be used to fund the workforce grant. After the legislative session ended, with no headway on the issue, childcare advocates turned their efforts toward the Executive Council. 

Earlier this summer, Republican Councilor John Stephen of Manchester traveled to Washington, D.C., and spoke about the matter with officials at the Administration for Children and Families. They responded to him in a letter on July 27. 

Wendy Horman, director of the federal Office of Child Care, confirmed that New Hampshire could not transfer extra, or reserve, TANF grant money from previous years into the Child Care and Development Fund, only current-year federal TANF funds, regardless of the amount of TANF money in reserve. This was the primary argument from childcare advocates, who alleged that past TANF funding could be used to fund the workforce grant. 

Horman also said that TANF money transferred into the Child Care and Development Fund, and leftover CCDF funds from previous years, could be used for childcare workforce and retention efforts, since it is an allowable use of the fund’s money. However, TANF funds, as given, cannot be used, as Horman said she still does not see how it meets the federal rules as stated in a letter from the agency in October 2025. 

Stephen sent the letter from the Administration of Children and Families to the state Department of Health and Human Services, along with his interpretation of how the department could move forward with funding the workforce program. Commissioner Lori Weaver responded to Stephen and Early Learning New Hampshire, the advocacy group leading the effort, to clear up “several misconceptions” about the funding matter. 

“While the ACF confirmed two lawful federal pathways — the use of current year TANF transferred to CCDF, and certain CCDF discretionary carryover — the Department is prohibited from utilizing these pathways under New Hampshire’s adopted budget,” Weaver wrote. “The ACF’s additional commentary on federal law does not change the Department’s obligations under state law, the enacted budget, and existing federal program requirements.” 

Weaver said the Administration of Children and Families response did not take into account the state’s Child Care and Development spending plan, approved agency budget, prior transfer decisions, existing federal commitments, remaining available balances, or the fiscal and programmatic tradeoffs associated with redirected limited federal childcare resources. The Legislature and Gov. Kelly Ayotte adopted a budget that maximized the TANF transfer to avoid a waitlist “during a period of significant growth” of the childcare scholarship program. 

“Redirecting those funds to workforce grants would require reducing assistance to eligible families,” Weaver said to Stephen. 

Weaver told Early Learning NH that the department “already committed” available TANF and Child Care and Development Funds to meet state budget and federal requirements, resulting in no leftover funds for the workforce grant. Weaver also said there was no federal waiver to allow extra TANF funds from previous years to fund the program, the initial path the Legislature tried to take in the budget. 

Jackie Cowell, executive director of Early Learning NH, said she was “pleased” with the quick response from the Department and the Administration for Children and Families on the matter. She said her organization still feels “there’s a lot to work out” before she gives up on the workforce grant funding.