First came the revelation that Maine allowed $110 million in federal funds to build up over the past four years, unobligated, in an account meant to pay for the state’s primary financial assistance program for low-income families. The unspent funds accumulated as the number of families receiving assistance fell by 60 percent because of state policy changes, not declining need.
Lawmakers learned about that fund balance on March 17.
Then, on Wednesday, the Maine Department of Health and Human Services released a list outlining how it planned to spend more than $80 million of the balance over the next 3½ years.
The list is vague, and some elements remain unsettled. But it’s hardly a coincidence DHHS released it a day before lawmakers on the Health and Human Services Committee voted on a bill, sponsored by Democratic Rep. Drew Gattine, that proposes other uses of that money to help low-income families — and days after a BDN editorial criticized the LePage administration for allowing the fund balance to accumulate.
“We have been actively re-deploying those funds to support a broad array of things that help low-income families in this state,” Sam Adolphsen, chief operating officer for DHHS, told the Health and Human Services Committee on Thursday.
Adolphsen said many of the spending items appear in the two-year plan Maine files regularly with the federal government, detailing its intentions for the Temporary Assistance for Needy Families program. But the document, which covers 2015 and 2016, actually contains none of them.
Nevertheless, the department has begun to spend a small portion of the TANF balance, but mostly in ways that don’t make more help available to the state’s poorest families.
Starting Oct. 1, 2015, for example, DHHS changed the funding source for contracts it holds with domestic violence resource agencies located throughout the state. Instead of paying for this work with state funds already appropriated through Maine’s budget — in combination with other, longstanding federal funding streams — DHHS changed the funding source to the federal TANF block grant.
The change meant no increase this year for the resource agencies, said Francine Stark, executive director of the Maine Coalition to End Domestic Violence. Instead, the move allows the department to spend federal funds in place of state resources.
Another use DHHS has in mind for the funds is the expanded Earned Income Tax Credit. Lawmakers included the credit’s expansion in the budget they passed last June, and they appropriated state funds to cover it. So Health and Human Services Committee lawmakers were surprised to learn DHHS now plans to cover much of the bill — at least those credits for low-income families with children — with TANF funds. Adolphsen said DHHS is considering the same arrangement for the newly passed sales tax fairness credit.
The $31.2 million over four years that DHHS plans to invest in the wide-ranging Social Services Block Grant doesn’t necessarily represent new investment, either. The amount matches the amount of TANF money DHHS has transferred to that account for each of the past two federal fiscal years, for which data are available.
DHHS plans to allocate $33.8 million through 2019 to cover child welfare services, foster care and family stabilization programs. Those initiatives aren’t new. They’re funded in the state budget, but apparently there’s a shortfall. DHHS’ use of TANF money to cover it, Adolphsen said, means the LePage administration won’t have to ask the Legislature for an additional appropriation.
To be sure, the DHHS list includes some new spending — small increases in the amount of assistance and value of services available to TANF recipients that lawmakers included in the current, two-year state budget that passed over Gov. Paul LePage’s veto.
“While it’s new for Maine to have TANF funds available, that’s not true for the rest of the country,” Adolphsen said.
Indeed, states have wide latitude when it comes to spending — or not spending — their TANF grants as long as the intended beneficiaries of the spending are low-income families with children. And in the 20 years since President Bill Clinton signed welfare reform into law, states have used their latitude to shift spending from assistance to a variety of other programs, often in order to free up other state resources or fill budget gaps.
Maine largely resisted that trend until now, reserving the bulk of its TANF grant for assistance and related initiatives. But over the past few years, Maine has simply not spent much of its TANF grant at all. At the end of federal fiscal year 2014, Maine ranked 11th in the nation for the share of its TANF grant left unspent, according to an analysis by the Center on Budget and Policy Priorities. At that point, Maine’s unspent balance was $59 million, and it has only grown since.
As that balance built up, the need for help didn’t subside, as more Maine children fell into extreme poverty. Instead, TANF, by serving so many fewer people, became less effective as a tool to offer low-income families stability in times of need. Now, by using the TANF grant to substitute for existing state spending and cover a budget shortfall, Maine’s cash assistance program will only stray further from its core objective: helping Maine’s poorest families escape poverty.