Portland city councilors wrestled Monday night with whether to seek state reimbursement for welfare payments to undocumented immigrants, in the face of LePage administration warnings that doing so could jeopardize more than $8 million in state funding for the city’s General Assistance program.

In what could be the first test of the administration’s controversial welfare reform effort, Portland officials have until Sept. 30 to decide whether to ask the state to help pay the costs of providing General Assistance to hundreds of undocumented immigrants.

The city is already locked in a legal battle with Republican Gov. Paul LePage over his administration’s June directive ordering municipalities to stop providing emergency financial assistance to undocumented immigrants. LePage has said that municipalities that defy his directive could lose all General Assistance reimbursement.

On Monday night, councilors met in private with legal staff to discuss the potential financial ramifications of continuing to provide welfare to hundreds of immigrants, most of whom are awaiting decisions on their applications for asylum in the U.S. Councilors declined to say what guidance they gave to city staff, citing the pending court case against the administration.

But during a public session and in comments afterward, they accused LePage of putting the city – and municipalities throughout the state – in an “untenable” situation. Ignoring the administration’s directive could cost Portland millions of dollars in state funding, but complying could subject the city to additional lawsuits from immigrants who were denied financial assistance, or their advocates.

Councilor David Marshall said that no matter what a municipality does, “the choice is the wrong choice.”

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“What the governor is doing is putting not only our own economy at risk, but the entire state economy at risk because if this negatively impacts the city’s bond rating, all of the other communities in the surrounding area will also be negatively impacted as a result,” Marshall said. “Right now the governor is playing chicken with municipalities over an issue that shouldn’t really be an issue.”

Marshall was responding to comments from Joseph Cuetara, a financial adviser with Moors & Cabot in Boston who works with Portland and other Maine municipalities on debt and credit ratings issues. Cuetara said it could be a non-issue if the city accrued additional debt or exceeded its spending goals to temporarily cover the costs of undocumented immigrants, but wins its legal battle.

But Cuetara warned that rating agencies could give the city a negative outlook or even downgrade the city’s bond rating if the city is saddled with millions of dollars in additional General Assistance costs. And because Portland is the primary driver of the local economy, a downgrade in Portland could affect other towns’ ratings as well, he said.

“It’s a snowball,” Cuetara told councilors during the public session.

Representatives from the Maine Department of Health and Human Services and LePage’s office did not respond to questions about the policy Monday afternoon.

Portland provides an estimated $300,000 a month – or $3.6 million annually – in vouchers to undocumented immigrants who request assistance in paying for housing, medicine and other needs. The state was expected to pay $8.7 million of the city’s total $10.7 million General Assistance bill this year before the DHHS announced that it would no longer reimburse municipalities for General Assistance provided to undocumented immigrants.

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LePage has said a 1996 federal law prohibits state or local funds from flowing to undocumented immigrants unless the state passes a law expressly allowing the expenditure – a law that Maine does not have.

Maine’s population of undocumented immigrants is largely made up of African immigrants living in the Portland area and Lewiston whose visas expire before their asylum requests are processed by U.S. immigration officials.

Initially, the LePage administration indicated that municipalities could continue to provide welfare to undocumented immigrants, without state reimbursement for that population. But LePage himself later upped the ante by warning that his administration would withhold all General Assistance reimbursement to communities that provide General Assistance to a group he often refers to as “illegal aliens.”

Portland, Westbrook and the Maine Municipal Association have since challenged the legality of the administration’s directive. And Maine Attorney General Janet Mills has questioned the constitutionality of denying financial assistance to needy individuals because of their immigration status and said the LePage administration did not follow the proper rulemaking process in announcing the policy shift.

Westbrook officials have also continued providing General Assistance to undocumented immigrants as they challenge the LePage administration policy in court alongside Portland and the MMA. But Westbrook opted not to seek state reimbursement for the $5,339 paid in the second half of June to 36 individuals likely to be deemed ineligible for General Assistance under the LePage policy.

Westbrook City Administrator Jerre Bryant said the city wants the courts to clarify the legal issues surrounding the LePage directive, but officials did not want to risk losing all General Assistance reimbursement by rebuking the administration.

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“We don’t want to compromise our program and we certainly don’t want our program to be deemed non-compliant,” Bryant said.

Julie Sullivan, Portland’s acting director of health and human services, said the LePage administration requires city staff to become de facto immigration officers as they try to assess an applicant’s legal status. Although many asylum seekers are living in Maine on expired visas, they are considered lawfully present in the country and are protected from deportation while their applications are under review, a process that can take years.

“It is unbelievably complex,” Sullivan said. “Our staff has had no training in it.”

Councilor Ed Suslovic also declined to discuss the guidance provided to city staff during the closed-door session. But Suslovic said he believes the city is “doing the responsible thing” by asking the courts to weigh in on the LePage administration directive.

 


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