AUGUSTA – Gov. Paul LePage said Thursday that the federal government will penalize the state $7 million because its welfare cash assistance program doesn’t meet federal work-participation standards.

The governor’s announcement came as lawmakers are set to finish their work for the legislative session and after the Democratic-controlled Legislature rejected one of his proposals to align work requirements in the state’s Temporary Assistance for Needy Families program with federal law. The administration has previously said the state was on the hook for $13 million in federal fines because its work participation rate among TANF recipients was far below federal standards.

Democrats and advocates for the poor have countered that Maine has submitted a corrective action plan that should help Maine avoid paying the fines.

“I submitted bills this session that would have required welfare recipients to look for a job and would have removed Maine’s lenient exemptions that allow them to avoid working,” LePage said in a written statement. “We simply wanted Maine to conform to federal work-participation guidelines for TANF, but liberal politicians rejected our bill. They don’t want people on welfare to have to work, and now Maine is facing millions of dollars in fines for just one year. Without welfare reform, these fines will just keep coming – and Maine taxpayers will foot the bill.”

According to new data released Tuesday by the federal Office of Family Assistance, Maine failed to meet work participation rates in 2011 for two categories of recipients within its cash assistance program.

Christine Hastedt, a policy analyst for Maine Equal Justice Partners, an advocacy group for the poor, said Thursday that the state’s TANF program is currently in compliance with one of the categories, the “all families” rate, which would carry the heaviest penalties. Hastedt said the state is out of compliance with the “two-parent families” rate, but said the state is likely to avoid significant penalties if it continues to file correction plans that can wipe out previous years of noncompliance.

She said none of the governor’s proposals would have had any impact on the 2011 compliance rate.

“This is not a surprise,” Hastedt said. “None of the governor’s (proposals) would have changed the compliance rate from 2011, 2010, 2009, 2008 or 2007, which is when we learned that we weren’t meeting work participation rates. Our biggest hope is to demonstrate compliance going forward.”

Liz Schott, a policy analyst for the Center on Budget and Policy Priorities, a national anti-poverty group in Washington, D.C., said demonstrating compliance is key to avoiding penalties, and Maine has already done that.

“Unless (Maine Department of Health and Human Services) doesn’t do their job and continue to file corrective action plans – unless they want to make political hay out of this – Maine shouldn’t have to pay the fine,” Schott said. “Even if they did have to pay, it would be a greatly reduced penalty if DHHS is doing its job. And the idea that the governor’s proposal would have done anything to avoid this is just not true.”

Work participation is a requirement to receive cash benefits from the TANF program. Recipients must engage in one or more federally outlined activities to meet the standard. States have approved different exemptions to accommodate families or individuals who may be unable to work for reasons such as taking care of an infant or an incapacitated or ill family member.

According to the data released Tuesday by the federal government, Maine’s work participation rate for TANF recipients in the all-families category was 19.1 percent in 2011, while the federal requirement was 47.5 percent. Maine’s two-parent family rate was 18.7 percent, and the standard was 87.5 percent.

The state’s work participation rates do not reflect the number of people receiving TANF and working. States receive no credit for work participation hours even for recipients who are working, but fall just short of meeting the required number of hours. In other words, if a TANF recipient works 28 hours and the weekly requirement is 30, the state receives no credit toward its participation rate, Schott said.

According to the U.S. Department of Health and Human Services 2013 report to Congress, Maine is one of 14 states that have been sanctioned for not meeting federal work participation standards since 2007. None of those states has paid a penalty, according to congressional reports.

Schott said 2007 marked significant changes in the requirements, which were enacted through the 2006 Deficit Reduction Act. A number of states had been penalized before 2007, but Schott said the changes have been criticized for undercutting the purpose of the TANF program and not doing enough to help recipients find jobs.

The assertion is backed by several reports from the Government Accountability Office, the watchdog arm of Congress. The GAO has said that Congress and the U.S. Department of Health and Human Services should reform the TANF program to ensure that states are meeting the work participation rate without employing gimmicks.

In 2012, the GAO said the TANF program’s emphasis on work participation rates as a measure of state performance has helped change the culture of state welfare programs toward a focus on moving families into employment, but “features of the work participation rates as currently implemented undercut their effectiveness as a way to encourage states to engage parents, including those difficult to serve, and help them achieve self-sufficiency.”

Policy analysts have called for changes in the federal work participation standards. The Center on Budget and Policy Priorities has said states are focusing on meeting the federal requirement rather than helping TANF recipients find work.

Currently, Maine and other states are required to track and document every hour of every recipient’s participation. According to Schott, that means states devote significant staff time to tracking hours rather than providing services that could help individuals improve their job prospects.

Schott said reforming the requirements has become politically charged even though both parties agree that change is needed.

“The work requirement simply doesn’t measure the success of a state’s TANF program,” she said.

LePage, in his statement, said, “Maine makes it far too easy for welfare recipients to avoid getting the experience they need to get a job, and this is costing millions of wasted taxpayer dollars in federal fines. Our common-sense legislation would have sent a very clear message that if you are on welfare, Maine taxpayers expect you to do all you can to get a job and work. But Democrats would rather let welfare recipients skip out on work.”

House Speaker Mark Eves, D-North Berwick, said Thursday that the state should focus on helping TANF recipients find work.

“The best anti-poverty program is a job,” he said in a written statement. “That’s why lawmakers overwhelmingly backed my Ticket-to-Work law that emphasized education and training to help struggling families get jobs and move out of poverty. At a time when Maine ranks 49th in the country for job creation, the governor should be focused on how to get more Mainers back to work, not continuing his war on the poor.”

Rep. Kenneth Fredette, R-Newport, introduced two bills that would have changed the state’s work requirements. Both were rejected.

“A poll released just yesterday showed that Mainers overwhelmingly support welfare reform, yet Democratic politicians remain completely out of touch in their defense of the status quo,” he said in a written statement. “These bills would have had a direct impact on Maine’s compliance with federal work participation requirements, but since majority Democratic politicians killed these common-sense bills, it is incumbent upon them to offer alternatives that would avoid the fines. These federal penalties for Maine’s lax welfare system won’t just go away if we continue to ignore them.”

Maine has 60 days to appeal the work-participation financial penalty, according to a letter from the federal Office of Family Assistance.

Steve Mistler can be contacted at 791-6345 or at:

smistler@pressherald.com

Twitter: @stevemistler