Paul LePage will become governor soon, and Stephen Bowen from the Maine Heritage Foundation is urging him, and us, to press for changes to Maine’s welfare program. But before we sign on to the Wisconsin model that Mr. Bowen recommends in his BDN column of Dec. 7, let’s look more closely.
First, let’s clear up some confusion about Maine’s current program. According to recent figures provided by the federal government, approximately 38,000 individuals, most of them children, receive cash assistance from Maine’s Temporary Assistance to Needy Families (TANF) program each month. This is a far cry from the 400,000 people that Mr. Bowen mentions in his column. If we include people claiming food subsidies, health insurance and child care vouchers in Wisconsin, we’d find a much larger number of people receive “welfare” there, too.
As Mr. Bowen notes, Wisconsin was very successful in moving mothers off cash assistance in the 1990s. While the majority of mothers leaving TANF did move into work, they did so in the context of a very strong economy.
Contrary to Mr. Bowen’s column, which implies that the drop in Wisconsin’s poverty rate was a result of the state’s new TANF program, studies of families leaving cash assistance showed that most of them experienced a net loss of income when they left the program. So the decline in the state’s poverty rate must have happened in spite of, not because of, the effects of the Wisconsin program on family income.
Furthermore, Wisconsin’s caseload decline was achieved at great expense. In the 1990s, Wisconsin had access to additional federal funds above its TANF grant. Gov. Tommy Thompson used federal and state funds to increase monthly benefit levels, to offer new supports, and to expand the state’s capacity to create and supervise the community service jobs that Mr. Bowen mentions. Participants had to work more hours, but they also had access to more child care, and — unlike most states — they were given the money the state collects from parents who’d left the family.
Even with the growing demand for low-skilled workers during the 1990s, Wisconsin’s governor recognized that parents leaving assistance would need additional support to supplement the low wages they could earn. In 1998, Gov. Thompson launched Badger Care, a highly subsidized health insurance program for mothers and children to supplement Medicaid, and he committed additional state resources to expand and subsidize child care for the children of working parents. He also used welfare money to pay for a refundable Earned Income Tax Credit.
In addition to changing program rules, Wisconsin changed how it contracted with local agencies and even replaced some county agencies with community organizations and for-profit firms. In the long run, these switches, presented as measures to increase efficiency, created new administrative challenges that dogged successive governors from both parties.
Initially the administration allowed local agencies to keep unspent funds at the same time that it authorized them to decide whose situation warranted government assistance and whose didn’t. This meant that declines in the caseload were translated into agency profits, triggering an outcry among politicians and citizens. But even after the state tied agency bonuses to a more diverse array of performance standards, Wisconsin Legislative Audit Bureau reports of misspending and troublesome inconsistencies across agencies continued to plague the governor’s office. In 2002, legal advocates called upon the Federal Office of Civil Rights to ensure that the state would take measures needed to protect disabled participants from being assigned activities they couldn’t complete.
In light of this information, we might question adopting the Wisconsin program. It is an expensive and risky proposition. Under the current economic conditions, Maine will have to expand its capacity to create and supervise community service work until there is more demand for low-skilled labor or push people off of assis-tance before they can secure employment.
And, even after the economy improves, Maine will have to pay for more support services, including child care, so program participants and families engaged in low-wage employment can make ends meet.
Victoria Mayer is an assistant professor of sociology at Colby College. Before moving to Maine, she studied the Wisconsin welfare reform program for seven years while working for the Institute for Research on Poverty, which is sponsored by the U.S. Department of Health and Human Services.