Portland could lose up to $6 million in General Assistance funds annually under a welfare reform proposal the LePage administration says will pay for critical needs elsewhere but that critics contend will punish the state’s largest cities.

The proposal, part of Gov. Paul LePage’s two-year, $6.3 billion budget, represents a major shift in the way the Maine Department of Health and Human Services reimburses communities for emergency assistance to help people pay for housing, food, medical care and other basic needs.

DHHS Commissioner Mary Mayhew said Wednesday that the “vast majority” of Maine communities will see their state reimbursements for General Assistance increase or remain relatively flat if the Legislature adopts the proposed change in the reimbursement formula.

But the shift would have a potentially significant impact on Portland, Bangor and Lewiston, three “service center” communities that are now reimbursed at higher rates because they serve so many people with low incomes.

In Portland, the financial cuts could be compounded by related proposals from LePage to prohibit “legal non-citizens” – including the city’s growing population of immigrants seeking asylum – from receiving state-funded General Assistance, food stamps and Temporary Assistance for Needy Families, or TANF.

“What happens to all of those people that would lose TANF, would lose food stamps and would lose General Assistance?” said Portland Mayor Michael Brennan, a vocal critic of LePage’s welfare reform agenda. “There is no good answer. We have no contingency plans for providing services … to hundreds if not thousands of people.”

FLIPPING THE FORMULA

The LePage administration is already locked in a legal battle with Portland, Westbrook and the Maine Municipal Association over earlier attempts to halt General Assistance to non-citizens. Fulfilling a re-election campaign pledge, the Republican governor unveiled his latest welfare reforms two days after taking the oath of office.

Most communities are now reimbursed for up to 50 percent of General Assistance payouts. But several larger cities – most notably Portland, Bangor and Lewiston – receive a higher, 90 percent reimbursement rate because they act as service centers for more low-income households.

LePage’s proposal would effectively flip the reimbursement formula, paying 90 percent of communities’ costs initially but then dropping to a 10 percent reimbursement rate after communities hit a new threshold – in this case, when program costs reach 40 percent of the previous six-year average.

Mayhew estimated that 57 percent of Maine communities would see an increase in funding under the formula change.

But Portland officials estimate the city would lose $5.5 million to $6 million annually – out of the current $11 million General Assistance program – as a result of the new formula and the elimination of state reimbursements for asylum seekers and other non-citizens.

“In Lewiston, which does not start receiving a 90 percent rate until much later in the year than Portland, city officials estimated that state reimbursements would drop from roughly $460,000 to $370,000 under the LePage administration’s new formula.”

Bangor’s state reimbursement would drop from $1.7 million to $1 million – a reduction that city officials described as “devastating” and “catastrophic.”

“We are looking at a $2 million cut from revenue sharing (in the governor’s budget) and this is on top of that,” said Patty Hamilton, director of public health and community services in Bangor.

“And the need is not going away,” added Rindy Fogler, who administers the city’s General Assistance program, which served about 5,000 households last year. Roughly 80 percent of those households receive assistance for three months or less, she said.

According to figures supplied to the Legislature’s budget-writing committee, the formula change will save the state $5.4 million each year during the two-year budget – money that DHHS officials said will go toward reducing a waiting list for disabled Mainers seeking home- or community-based care.

The department expects to save another $4 million over the biennium by prohibiting “legal non-citizens” from receiving food stamps, TANF and state supplemental benefits, a move that Mayhew said would bring Maine in line with federal law. According to the federal definition, legal non-citizens would include visa holders as well as immigrants who have applied for or plan to apply for asylum in the United States because of persecution in their home countries.

Asked about cities’ concerns that the proposal does nothing to address the need for services while shifting the financial burden onto communities, Mayhew said it is no different from what DHHS must do to “prioritize limited resources to support our overall core mission.”

“I have other areas in my department that also need additional attention and investment,” Mayhew said. “This is about prioritization. And we would expect the same to be occurring at the municipal level.”

THE IMMIGRANT ISSUE

LePage’s budget is the latest front in a long-running battle between the administration, Portland officials and progressive groups over welfare and the share of the General Assistance pie being consumed by immigrants.

Last year, DHHS announced that the state would no longer reimburse communities for General Assistance provided to asylum seekers and other non-citizens. Portland, Westbrook and the Maine Municipal Association sued to block the change. But Portland officials said late last year they were freezing vacant positions and limiting overtime in anticipation of losing more than $3 million in state reimbursements.

Immigrants from central African nations seeking asylum in Maine account for a growing share of Portland’s General Assistance budget.

In fiscal year 2013, immigrants living in Portland on visas or whose applications for asylum were pending represented 29 percent of the city’s General Assistance caseload – 814 of 2,840 cases. During the first five months of fiscal year 2015, those two categories accounted for 45 percent of the city’s General Assistance cases.

Chris Hastedt, public policy director at the left-leaning nonprofit organization Maine Equal Justice Partners, said the LePage administration’s proposal would take away access to what is essentially the “resource of last resort” for some households.

“What is going to happen to these folks and their kids and their lives if this source of assistance is shut off?” Hastedt said. “These people are here, they are in our community and they need help.”

But Matt Gagnon, CEO of the conservative think tank the Maine Heritage Policy Center, said he supports the governor’s overall strategy to try to move people off welfare and into better lives.

“Money is not the deciding factor in whether the public is being served by a welfare program,” Gagnon said. “It is how effective the program is in getting people help and pointing people in the right direction to getting work.”

The Legislature’s Appropriations and Financial Affairs Committee and Health and Human Services Committee will schedule public hearings later on the governor’s proposed changes to the General Assistance and welfare eligibility programs.

 

The article was updated at 5 p.m. on Jan. 28 to reflect updated figures provided to the Portland Press Herald by the city of Lewiston. Earlier figures overestimated the size of the reduction in General Assistance reimbursements from the state if the governor’s new reimbursement formula is implemented.