A 60-month cap on federal Temporary Assistance for Needy Families, or TANF, benefits that was pushed for by Gov. Paul LePage and the Republican-controlled 125th Legislature brought Maine in line with other states and helped reduce welfare dependence, supporters claim.
It also has resulted in a dramatic shift in burden from the federal government to state and municipal governments, according to an analysis by the Maine Sunday Telegram.
Since June 1, when the cap went into effect, nearly 2,500 families have been removed from the TANF rolls in Maine. Hundreds more are expected to reach the 60-month limit in the next several months, according to enrollment data obtained from the Maine Department of Health and Human Services through a Freedom of Access Act request.
Many who lost eligibility have turned to general assistance offered through their local community — although the exact number is hard to quantify because there is no statewide database for general assistance — and communities are bracing for more. Portland, Bangor, Lewiston and other cities have increased their general assistance budgets for fiscal year 2012, some by as much as 100 percent. The correlation between the TANF cap and those increases is direct, the communities say.
Kate Dufour, a policy analyst with the Maine Municipal Association, said the full effect of the change may not be known for awhile but will certainly be significant.
“There was strong interest in adopting this policy change, and I don’t know that many thought about what would happen to other programs,” she said.
Compounding the problem are recent cuts to general assistance. There is now a nine-month cap on assistance for housing, and the maximum monthly benefit has decreased by 10 percent.
While some credit the LePage administration for reining in welfare spending, others say he’s just solving one problem by creating another.
“We’re spending all this time building fences to keep people off assistance if they don’t belong,” said Shawn Yardley, health and welfare director for the city of Bangor. “And we should be doing that, but we’re also forgetting about people who do qualify for assistance and who need help.”
Christine Hastedt, with Maine Equal Justice Partners, a statewide advocacy group, said the TANF cap, coupled with the new cap on general assistance for housing, is “a prescription for wholesale homelessness.”
Tabitha Woodside, 33, of Portland, is not in danger of becoming homeless yet; but without TANF, she said, she wouldn’t be able to make ends meet.
A single mother of two boys, Woodside is wrapping up a bachelor’s degree at the University of Southern Maine, a process that took her much longer than the standard four years. She is one of the many in Maine who has received TANF for longer than 60 months, but she has been granted a temporary exemption until she finishes school.
After that, she doesn’t know what will happen.
“I’m glad that I’ll have a degree, but that doesn’t automatically mean I’ll get a good-paying job,” she said in a recent interview. “For me, it’s making sure I provide for my kids.”
TANF cap’s origin
A federal 60-month cap has existed since TANF was created in 1996 to replace the Assistance to Families of Dependent Children program.
However, many states step in after that 60 months to continue providing benefits; and until recently, Maine was one of those states.
LePage thinks five years is long enough for someone to move from welfare to work. Others think the governor is oversimplifying the problem and playing off the frustration of working-class Mainers who see others getting handouts.
Before the cap, Maine did have a high rate of TANF recipients whose benefits exceeded 60 months. Most of those folks now have been weeded out. On July 10, 10,309 Mainers were receiving benefits, down from the 14,757 who received TANF about one year ago.
The new cap also has reduced the amount of money the state has given out in cash assistance.
For the last several years, Maine has spent an average of $5.5 million to $6 million each month on TANF benefits. In June 2012, the first month after the cap was in place, spending dropped to $4.3 million.
Projections are that the monthly TANF expenditures will stay well below $5 million for the foreseeable future.
But Maine still gets about $78 million from the feds every year, or about $6.5 million each month, and is required to spend an additional $40 million of state money to keep that grant. The new cap doesn’t change that.
So where will all that extra money go?
Dawn Mulcahey, Maine’s TANF program manager, said TANF has always been an underfunded program. She said the extra money will allow the state to develop programs that focus on moving families from welfare to work. In other words, the money will still aid low-income Mainers, just not in the form of cash assistance. Instead, it will go toward education, child care and transportation assistance, she said.
That shift will bring Maine more in line with the national trend on TANF spending. In 2011, the U.S. spent more than $30 million, but only about one-third of that went to cash assistance. In Maine, about 75 percent of all TANF expenses were for cash assistance.
“I don’t think it’s good that 2,500 have lost benefits in order to free up this money, but at least it’s still benefitting those in need,” Hastedt said.
Most people who recently have lost TANF benefits didn’t suddenly come into a large sum of money or land a high-paying job.
“People need to understand that there are still significant barriers to work for many of these people,” Hastedt said.
A 2010 study by two University of Maine professors surveyed hundreds of TANF recipients. The results highlighted the challenges of the program.
Nearly 70 percent of recipients worked in low-wage sales or service sector jobs. Nearly one-quarter did not have a high school diploma. Two-thirds of households had a least one family member with a disability. Access to affordable child care was another barrier.
Shift to general assistance
General assistance was established as an emergency welfare program offered in each Maine community. Unlike TANF, it is not a cash benefit.
In most cases, general assistance takes the form of a housing voucher. Sometimes it pays for a heating or electric bill.
With TANF benefits shrinking, general assistance budgets are ballooning to accommodate the cap.
In Portland, the general assistance budget increased from $6.5 million in fiscal year 2011-12 to $7.9 million for the current fiscal year. In Bangor, the budget increased from $2.5 million to $3.1 million over that same time. In Lewiston, the jump was from about $1 million to more than $1.6 million. To pay for those increases, cities have had to either increase property taxes or reduce or eliminate other municipal services.
In Maine’s three largest communities, welfare directors have said that the TANF cap is the main reason for the increase. Since June 1, Portland has provided general assistance to 13 families who had reached the TANF cap. In Bangor, at least a dozen families have applied so far for general assistance to stem the loss of TANF.
No Maine community has been affected by the cap more than Lewiston. Since June 1, 21 families who reached the TANF limit and were declared ineligible have received general assistance, City Manager Ed Barrett said. More than 60 families had applied, though, or about 20 percent of all families in Lewiston who reached the cap.
Barrett said the TANF cap probably makes sense, but the program has not helped get recipients into work.
“Where are the skills? In some cases, people can’t even speak English. How can they get a job?” Barrett said.
Other communities are seeing that shift as well.
Vicky Edgerly, director of health and welfare for Biddeford, said her general assistance budget doubled this year, mostly to accommodate the TANF cap.
“All that did was shift the cost from the feds to local communities,” she said. “I don’t think that was the governor’s intent, but all the changes happened behind the scenes.”
At a time when more are turning to general assistance, that program is undergoing changes, too, in the face of budget pressures. The state’s total general assistance budget has more than doubled in the last decade, and the LePage administration thinks that too much.
People on TANF or general assistance are often waiting for a more permanent subsidy, according to Hastedt. Usually, it’s Social Security disability benefits. That’s a slow process dictated by the federal government. And sometimes disability doesn’t cover their expenses. They still qualify for other assistance.
Said Yardley: “I don’t think we’ve agreed on the problem yet. How are we going to find a solution?”
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