Maine cities, towns brace for looming welfare cuts

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PORTLAND — Starting July 1, recipients of municipal welfare will see a 10 percent cut in maximum aid and a reduction in the number of months they can receive rent assistance in the following year.

Those cuts are the result of efforts made by the Legislature to maintain essential services to the state’s lowest wage earners while meeting Gov. Paul LePage’s demand to cut state welfare spending. 

For the past few weeks, town and city councils across the state have begrudgingly accepted the cuts in order to preserve crucial state reimbursement for local welfare spending. In some instances, councilors have logged “protest votes” against approving the cuts to send a disapproving message to Augusta. 

Local General Assistance administrators say the cuts will hit hardest in larger cities – an official in Portland said the cuts could condemn the city’s poorest residents to homelessness. But they may go mostly unnoticed in smaller towns. 

General Assistance, or GA, is meant to provide temporary aid to individuals and families struggling to pay their bills. 

Since the early 1990s, the state’s General Assistance program has included “overall maximum levels of assistance.” That limit serves as both a starting point for entry into the program, with residents ineligible for aid if their monthly household income exceeds the maximum, and a cap on how much assistance will be given. 

Essentially, municipalities use GA to bridge the gap between monthly income and the state maximum to help cover expenses such as rent, food, utility bills, heating fuel, household supplies and baby supplies. 

GA is awarded in the form of vouchers, not cash. So aid given for rent is paid directly to landlords and aid for a delinquent electric bill is paid directly to the utility company. Recipients never receive cash from GA

The state reimburses communities for some of the money they spend on GA, as long as those cities and towns adopt the state guidelines, including the maximum levels. Each community that plays by the state rules receives 50 percent reimbursement, but the state also assigns each municipality a threshold spending level, above which they receive a bigger contribution.

Those cities have historically received a 90 percent reimbursement for aid distributed above the threshold. 

Why cuts?

After being elected governor in 2010, LePage recommended several proposals to gut the state GA program, including limiting applicants to one instance of aid per year; restricting GA benefits for housing to 90 days per year, and making recipients of Temporary Assistance for Needy Families, or TANF, ineligible for GA.

GA maximums have increased steadily for at least five years, said Rene Daniel, who administers GA for Windham and Scarborough. This is the first time he can recall the maximums sliding backward.

The governor’s office said cuts were necessary to curb runaway welfare spending.

“Maine’s population grew 7 percent from 2000 to 2010, but our welfare programs have grown by nearly 80 percent since 2002,” said LePage’s spokeswoman, Adrienne Bennett. “In 2003, state GA expenditures were $5 million. In 2011, that had jumped to $11 million.” 

“We have a budget that needed to be balanced,” Bennett said. “We don’t have the luxury of the federal government to have an unbalanced budget. We had to prioritize.”

Bennett also said the state’s reimbursement system encourages municipalities to spend more on General Assistance. 

Lawmakers and the governor crafted a compromise that imposed the 10 percent cut to the maximum; limited rent assistance to nine months out of the year; created a “GA Workgroup” to figure out how to cut GA spending in the second half of fiscal 2013 by $500,000, and reduced the maximum reimbursement rate from 90 percent to 85 percent. Those changes go into effect Sunday, July 1.

Some legislators thought the changes didn’t go far enough. 

“GA is supposed to be a helping hand, not a way of life,” said Rep. Heather Sirocki, R-Scarborough, who voted against the GA cuts because they didn’t go far enough. 

Sirocki, who serves on the Legislature’s Health and Human Services Committee, said too much GA is going to people who are able to work, while waiting lists for MaineCare and other welfare programs swell with the physically and mentally disabled.

“We had 1,077, at last count, who are the most needy, who are physically and mentally disabled, and they are on wait lists,” she said. “I find that shameful.”

‘On the backs of the poor’

In town and city halls across the state, councilors have decided to accept the state’s cuts, even if those cuts weren’t popular.

“This essentially tries to balance the state budget on the backs of the poorest of the poor,” said City Councilor Tom Coward of South Portland, who, knowing the council would approve the cuts to preserve reimbursements, logged a protest vote.

“You can do it, but you’re not going to have my help,” he said.

South Portland’s GA budget for fiscal 2013 is about $243,000. Since July 2011, the city has provided General Assistance to 170 families and 139 individuals, most of it in the form of rent or housing vouchers. 

Coward serves on Maine Municipal Association’s Legislative Policy Committee, which lobbied on behalf of municipalities for smaller welfare cuts. He said he understands the 10 percent cut to state maximums, but couldn’t justify limiting rent/housing assistance to nine months of the year.

“We’re basically saying, ‘You’ve got to find a way to make housing work for three months and we’re not helping you,'” he said.

In Portland, which accounts for 40 percent of all GA spending in the state, rent assistance makes up 61 percent of total aid. In 2011, the city provided assistance to more than 4,000 individuals.

The majority of state GA recipients are “in the system” for less than six months, though numbers vary by municipality. But Portland’s director of health and human services, Doug Gardner, said about 275 households – 18 percent of all GA recipients – received rent assistance for more than nine months in fiscal 2011, the most recent year for which complete data is available.

“We help lots of households beyond nine months with rental assistance, and if we’re not able to do that anymore, these folks will not be able to maintain that housing,” Gardner said.

An exception in the new GA law allows General Assistance administrators to file for an emergency exemption from the nine-month limit, and ignores the limit entirely for residents on Social Security. But the exact exemption process is still unknown, and Gardner said it’s still possible some recipients will end up in homeless shelters. 

While the impending cuts are a cause for concern in Portland, it’s a different story across the Fore River. 

Bracing for impact

Kathleen Babeu, South Portland’s GA administrator, said rent is the No. 1 concern for GA applicants.

But she is optimistic her department can absorb the looming cuts by connecting clients with outside organizations like food pantries and nonprofit groups that help with heating oil, clothes and other expenses.

“We want their disposable income to go to rent, so we look at other places they can save,” Babeu said. “I’ve been working with my clients since March, warning them, saying ‘This is what’s being proposed in Augusta.’ We’ve been doing a lot ahead of time.”

Farther south, in Scarborough, Daniel said the cuts will make welfare officials throughout the state be much more thorough with clients to ensure Maine’s needy get all the help they can.

Scarborough spent about $2,000 in fiscal 2012 to assist about 12 households, Daniel said. Like the other communities, most assistance was in the form of rent vouchers. 

“This is going to make us fine-tune our questions,” Daniel said. “We’re going to have to probe more, to really dig into more depth and make sure our residents aren’t falling between the cracks. 

Daniel said that while towns like Scarborough won’t be “slammed” as hard as Portland or other, larger cities, the effect of state cuts will be felt.

Most new applicants, he said, are “working poor” – people who have jobs but still can’t make ends meet. If a couple in a one-bedroom apartment pays $1,000 per month in rent while both work full-time at minimum-wage jobs, he said, they can barely make ends meet.

“A $20 cut doesn’t sound like a lot, but that’s $240 a year,” he said. “And that’s a huge hit.”

 Looking forward

As they’ve been written into law, the changes to General Assistance will expire at the end of the 2013 fiscal year, on June 30, 2013. If state lawmakers allow that to happen, benefits will return to the fiscal 2012 levels, increasing the maximum reimbursement rate to 90 percent and restoring year-round rental assistance.

No one seems to think the Legislature will allow that to happen. But there’s little agreement about what should – or will – happen next. 

“All levels of our government are unsustainable,” Sirocki, the Scarborough representative, said. “We have to make some serious changes. We can’t continue to run billion-dollar deficits every time we hit a new fiscal year.”

Daniel, the Scarborough GA administrator, said he thinks that after a one-year trial period, lawmakers will have no choice but to increase maximums.

“I think their expectations are overly positive,” he said. “They’re not going to see the results they anticipate. … It may not go back up to where it was in 2012, but it will slowly go back up again.”

Bennett, LePage’s spokeswoman, said General Assistance reform will continue to be a priority for the governor. LePage wants to eliminate rental assistance from GA and find other ways to help people keep roofs over their heads, she said.

“General Assistance is meant to be a last resort,” she said. “It was never meant to be a housing program, but the majority of costs are housing related. That points to a larger issue. We have a problem with affordable housing and we need to address it in a different way.”

Andrew Cullen contributed to this report.