Hamilton County is in an $8 million fight with the state over welfare money. County officials say they are owed the money for providing services to poor people — day care for working mothers, food stamps and transportation to jobs — over and above the money the state gave the county for those programs.

        That extra money, claimed by the state from the federal government, has traditionally been passed back to the counties, until this year.

        Tom Hayes, director of the Ohio Department of Job and Family Services, sent a memo to the counties on March 29 stating that “performance incentives are eliminated.”

        In the memo, Mr. Hayes says state law does not require his department to pass the money back to counties.

        Mr. Hayes said Monday that the money will be used to stock the state's welfare reserves, which have dwindled from a high-water mark of $700 million to $60 million.

        Hamilton County Adminis trator Dave Krings said the county earned the $8 million and he wants it.

        “It's not right,” Mr. Krings said of the state's withholding of the funds. “That money was earned by Hamilton County for services provided by Hamilton County. Give us the money we earned.”

        Mr. Hayes said he wishes that was possible.

        Passing the cash back to counties “is a great idea when you have money — when you have the capacity to do it,” Mr. Hayes said.

        “But we don't have $700 million balances anymore, so we don't have the flexibility to provide these opportunities.”

        Here's how the system worked:

        The state received federal money and distributed it to counties in lump sums. Under welfare reform, those payments allowed counties freedom to spend the cash on whatever programs were needed.

        The state then made claims to the federal government on behalf of counties that spent more than their allocation in any given year.

        Suzanne Burke, director of the Hamilton County Department of Job and Family Services, said the state's policy change means counties will no longer supply services that cost more than their allocations.

        And those federal dollars will be claimed by other states.

        “It all translates into Ohio citizens getting less of the services they need,” Ms. Burke said. “Now that money will go somewhere else.”

        Prior to welfare reform, counties would apply for federal grants from specific federal programs, then had to spend the money in strict compliance with the program offering the grant.

        County commissioners said Monday that if there is no change in the state's policy, they'll go back to the old way of doing business.

        “If we can't make the partnership work, we'll have to abandon it,” Commissioner Tom Neyer said.

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