Maine Focus

What LePage really plans to do with $100M meant for Maine families in poverty

Posted June 16, 2017, at 3:56 p.m.
Last modified June 16, 2017, at 4:17 p.m.

More than 8,600 low-income Maine families lost cash assistance and help finding and keeping work over the past five years due to a policy change under the LePage administration. Those families included almost 15,000 children.

But just because the state cut families from federally funded Temporary Assistance for Needy Families, or TANF, doesn’t mean it’s had less money for the program. The federal government gives Maine the same amount of funding each year — $78.1 million — regardless of whether it uses it. And last summer, the unspent balance in Maine’s TANF account reached $155.5 million.

When lawmakers asked questions this legislative session about what the LePage administration intended to do with the money, Maine Department of Health and Human Services officials said they were using it to expand programs that already exist to help low-income families with children or beef up new programs that hadn’t received state money before.

For the most part, however, that’s not the case.

A BDN Maine Focus review of the department’s spending plans, interviews with nonprofit service providers in line to receive funds and an examination of state documents show that DHHS is largely using TANF to cover long-term state spending obligations — such as shelters for homeless young people and transportation for families involved in the child protective system.

Gov. Paul LePage’s budget proposal released earlier this year included state money for most of these services, so, by using TANF to pay for them, DHHS can free up money in other accounts. However, the department has denied publicly that this is what it’s doing, and it has not answered questions about its plans for the state money it is supposedly saving.

The original purpose of TANF was to provide some financial stability to low-income families so they could stay together, children could be raised by their parents, and parents could escape poverty through work. But DHHS now plans to use a substantial chunk of TANF funding to pay for services for young people and families who are already deep in crisis, whether homeless, separated because they’re involved in child protective cases, or escaping an abusive spouse, according to the BDN review.

As state lawmakers hash out a budget that’s been the subject of public hearings and legislative committee reviews, the LePage administration has orchestrated this major budget shift on its own, largely beyond public view and mostly without adding to the support available to help low-income Mainers escape poverty.

“Even the people who are close to it are having a hard time following the shell game that’s being played,” said Shawn Yardley, CEO of Community Concepts in Lewiston, a social services organization that’s now receiving some of the state’s TANF money in place of state money it received in the past to provide longstanding services.

The unanswered question

Across the country, states have used TANF funds for any number of purposes — from marriage classes in Oklahoma to private college scholarships in Michigan — as their welfare programs have shrunk over the past two decades.

While TANF’s core purposes are to provide assistance to families in poverty and to help the adults in those families find and keep work, the 1996 law that created TANF has two other purposes: reducing out-of-wedlock pregnancies and encouraging “the formation and maintenance of two-parent families.” States have applied those latter two purposes broadly.

An analysis of states’ welfare spending by the Center on Budget and Policy Priorities found that, in 2015, states spent just half of TANF program funds on the core purposes that drove the 1996 law. In 28 states, 20 percent of their TANF funding or less went to those core purposes.

Now, “Maine is joining [other states] to use this money not for the core welfare reform purposes of getting families connected to work and supporting them as they go to work, but instead to use this as state fiscal relief,” said Liz Schott, a senior fellow at the Center on Budget and Policy Priorities and one of the authors of the center’s welfare spending analysis.

Maine’s sizable balance of unspent TANF funds grew quietly following a state policy change early in the LePage administration — which imposed a five-year lifetime limit on TANF benefits — that resulted in the number of families receiving the benefits falling by nearly two-thirds.

But lawmakers this year have requested more details from DHHS on its plans for spending the sum. In addition, Democratic House Speaker Sara Gideon has proposed legislation that would direct much of the money to basic support for low-income families, including greater amounts of cash assistance, larger child care subsidies and housing vouchers.

Last month, DHHS distributed a three-page outline to the Legislature’s Health and Human Services Committee offering a broad overview of its spending plans for the coming fiscal year, which begins July 1.

“Largely what we’re doing is supplementing programs that exist or new programs,” Nick Adolphsen, government relations and policy director for DHHS, told committee members during a May 15 work session on Gideon’s legislation. “Broadly speaking, that’s where we went with this.”

Here’s why that statement is inaccurate:

About a third of the spending covers longstanding obligations that DHHS has traditionally covered with other state funds. Out of $102 million in TANF funds DHHS says it plans to spend in the fiscal year that starts July 1 — a combination of the $78.1 million annual grant and a portion of the accrued balance — the BDN calculated that $34.5 million, more than a third of the total, will represent spending on programs and services previously paid for using other state funds. Those funds are currently either raised from state taxpayers or come from other federal grants.

About 8 percent is funding for organizations that are receiving support from TANF that will help them grow the programs they have or create new ones. While the department has asserted that it’s directing TANF funds to new or expanded initiatives, the BDN’s review shows that only 8.3 percent of its planned TANF spending for the coming fiscal year — $8.48 million — will actually go toward those purposes.

About 43 percent is already spoken for. Almost 43 percent of the spending represents pre-existing TANF spending obligations, including cash assistance for those still eligible for it and administrative expenses.

The state hasn’t finalized the remainder. Based on the BDN’s estimates, backed up by financial documents and interviews, the department has yet to determine exactly how it will spend the remaining 15 percent of funds, about $15.3 million.

The unanswered question is: What will DHHS do with the millions of dollars it no longer needs to spend from other accounts because it’s using TANF funds instead? Members of the Legislature’s Health and Human Services Committee wanted to know during a May 15 work session.

“I think what you’re asking is, do we have a whole bunch of General Fund money that we’ve saved through this?” Adolphsen said in response to a question from Rep. Patricia Hymanson, the committee’s House chair. “The answer is no. There are not all kinds of General Fund resources that are available.”

Adolphsen later declined to answer follow-up questions from the committee.

The BDN also asked the department what it planned to do with the money it saved. DHHS spokeswoman Samantha Edwards responded in an email: “During the upcoming biennium, TANF funding will be directed to a number of new initiatives. In other areas, available, non-designated General Fund dollars would be utilized to address existing needs.”

‘Now it will come from TANF’

The idea behind the cash assistance traditionally available through TANF is to provide some financial stability for low-income families that can help prevent a precarious family situation from devolving into a full-blown crisis.

But in backing away from cash assistance, DHHS now plans to use TANF funding to pay for services for young people and families who are already in those crisis situations.

“The TANF funding is supposed to be more preventive and ongoing,” said Yardley, the former director of public health and community services in Bangor and a former child welfare caseworker and administrator for the state. “What I think based on what I see is, they’re diverting those funds to deal with crises, but it’s not new funding.”

Here’s how the funding source for various services has changed. For additional details, click here:

Help for homeless youth. In 2015, Maine spent $2.6 million on services for homeless young people that it’s required by law to provide — $842,000 in federal funds from the Social Services Block Grant and the remainder from state taxpayer funds, according to a report the state filed with the federal government.

Nearly three years later, DHHS’ TANF spending outline shows the state paying for the full amount with TANF, freeing up funding in those other two state accounts but not adding to the services provided, which include shelters, counseling and substance use treatment.

The South Portland organization Day One, which provides substance use treatment to teens, receives a portion of those funds — $134,500 each year to help teens at the Preble Street Teen Center.

“The funding will be the same during the next fiscal year as it has been for many years,” Rebecca Howes, Day One’s director of development and public relations, wrote in an email. “Previously these funds came from the State general fund but now it will come from TANF.”

Child protective cases. DHHS also plans to devote almost $10 million in TANF money to services the state must provide for families involved in the child protective system.

DHHS now plans to cover 90 percent of costs for transportation — so parents and children whom the state has separated can attend appointments required as part of their reunification plans — using TANF.

DHHS officials have long trained their sights on using TANF to cover child welfare transportation costs in order to produce savings in the state General Fund, according to internal emails from 2015 released to the BDN earlier this year in response to a public records request.

Along with transportation in child welfare cases, DHHS plans to use $5.8 million from TANF to cover other legal obligations to families in child protective cases, including supervised visits between separated children and parents.

Domestic violence and sexual assault. Another $2.5 million of the TANF grant this coming year will pay for services for victims of domestic violence and sexual assault — including 24-hour hotlines, shelters and court advocates — that the state has long covered with other sources.

‘Not a lot of checks and balances’

The Family Planning Association of Maine is another organization whose annual funding will come from TANF this coming year instead of state funds and another federal source.

“It doesn’t have any operational impact,” said Kate Brogan, the association’s vice president for public affairs. But the funding stream is more tenuous when it comes from a federal block grant whose allocations aren’t normally subject to the Legislature’s approval, she said.

“It’s really at the discretion of the department,” Brogan said. “So, if the department decided tomorrow that they don’t want to fund family planning, they would just reallocate those funds. There’s not a lot of checks and balances.”

New spending, in part

To be sure, DHHS’ spending plans for TANF include some spending that will result in new or expanded services for children from low-income families. Generally, however, the TANF spending on new and expanding initiatives comes in substantially smaller amounts than the state’s use of TANF to cover longstanding, basic services.

When the department finishes divvying up the funds among organizations across the state, each group has a small sum to serve a narrow geographic area.

Dropout recovery. One example is new programming for Jobs for Maine’s Graduates, a nonprofit organization created by the Legislature that offers programs in high schools across the state geared to students at risk of dropping out.

The organization will receive $210,000 in TANF funds this coming year that will allow it to start three new dropout recovery programs, one each in Cumberland, Androscoggin and Kennebec counties, said Kim Lipp, Jobs for Maine’s Graduates’ executive vice president.

Another $200,000 in TANF funding will pay for a one-year pilot project involving college scholarships for low-income youth, according to a state contracting document.

But TANF will also supplant some state funds for the organization. Jobs for Maine’s Graduates will continue to receive $600,000 for programs that specifically serve youth in foster care, but the funding source will be TANF, Lipp said.

After-school programs. DHHS has set aside $1.5 million from TANF — out of more than $102 million it plans to spend next year — that it says will go to 14 organizations that offer after-school and extracurricular programs aimed at boosting academic achievement, reducing risky youth behaviors and preventing dropouts.

When DHHS requested program proposals in 2015, the department asked organizations to show how their programs met the purposes of TANF laid out in federal law, specifically the two TANF purposes that states have traditionally used in order to take advantage of the funding stream’s flexibility: preventing out-of-wedlock pregnancies, and encouraging “the formation and maintenance of two-parent families.”

“[T]here is a clear statistical relationship between staying in school and lower teen pregnancy rates,” read DHHS’ request for proposals. “Thus, we would conclude that special initiatives to keep teens in school are reasonably related to the third purpose of TANF — to reduce out-of-wedlock pregnancies.”

Using TANF for after-school programs under the pretense that they reduce out-of-wedlock pregnancies is acceptable under a federal law that aimed to give states substantial leeway, according to the Center on Budget and Policy Priorities’ Schott. And states have taken advantage of that leeway, even though it’s “a real stretch,” she said.

Child care. In 2015, the most recent year for which federal spending figures are available, Maine spent $6.6 million of its federal TANF money on subsidies parents used to pay for child care. In 2018, DHHS says it plans to spend $17.3 million on child care — an increase of almost $10.8 million.

But Adolphsen, the department’s policy director, cautioned lawmakers in May, “These numbers aren’t all set in stone yet.”

He said DHHS planned to raise subsidy rates for one category of child care providers, those who care for children in their own homes. Generally, the larger child care centers that represent more than 70 percent of the state’s child care capacity would not receive a rate increase, save for one age group — school-age children who require care before and after school.

“There is no denying that Family Child Care is the more affordable and accessible option,” Edwards, the DHHS spokeswoman, wrote in her email to the BDN. “Specifically, Family Child Care can be found throughout the state whereas Center Based Child Care facilities are often located in higher density areas. Family Child Care typically costs less than Center Based Child Care services. Increasing reimbursement rates will cut down cost to working Maine families.”

DHHS has said it would cost $6.5 million to raise subsidy rates for all child care providers. So it’s unclear how DHHS could spend nearly $11 million more on child care than it already does from TANF, especially when it doesn’t plan to raise subsidy rates for the most common type of child care.

Spoken for, but not committed

Child care isn’t the only area for which DHHS has listed a figure for the amount of TANF money it plans to spend, but hasn’t determined how it will use the money.

DHHS next year says it plans to transfer 10 percent of its TANF grant — $7.8 million — to the more flexible Social Services Block Grant.

Federal law allows the transfer, but it requires that the state spend the $7.8 million on services that benefit low-income families with kids.

That task proved difficult in 2015 and 2016, when the department spent the money on services for elderly and disabled Mainers. The unlawful spending, first uncovered by the BDN, prompted a rebuke from Maine’s state auditor, and DHHS reversed the spending using state General Fund money to retroactively cover the expenses.

It’s unclear this year if the department has found suitable programs. DHHS spokeswoman Edwards said the spending plan is “still under development.”

Maine Focus is a journalism and community engagement initiative at the Bangor Daily News. Questions? Write to mainefocus@bangordailynews.com.

Subscribe to the Maine Focus mailing list

SEE COMMENTS →