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Maine Department Of Labor’s $6,500,000 Welfare Lottery Yields Few Winners

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Maine Department of Labor spent more than $6.5 million from 2008 to 2012 on “training and support” for 851 Mainers – Draft report describes flawed, irresponsible government largesse – Program managers required to funnel applicants into other welfare programs – Other welfare not considered “income” – Max two-year benefits: $48,390; benefits given for up to eight years – $393,375 spent on car repairs; $91,200 on car insurance – “Anti-poverty” program left some with lower wages

By S.E. Robinson, Maine Wire Reporter

AUGUSTA – The Maine Department of Labor has spent $6.5 million on a flawed anti-poverty lottery that lacks accountability, has yielded few winners, and  has saddled Maine’s business owners with the bill.

“Stuff like this makes my blood boil,” said John Butera, senior economic adviser to Republican Gov. Paul LePage. “This is a perfect example of a wasteful government,” he said.

The Competitive Skills Scholarship (CSSP), a project administered by the Bureau of Employment Services, is funded not through general appropriations but through the state Competitive Skills Scholarship Fund (CSSF), a fund financed by contributions from all Maine employers via a .06 percent employer tax.

Maine business owners have funded the state program more than $6.5 million dollars in four years to provide job “training and support” for 851 participants. According to documents obtained by The Maine Wire, the results are far from impressive.
CSSP_logo

The documents include internal memos regarding the program’s administration and performance and an unpublished report from Department of Labor Commissioner Jeanne S. Paquette dated January 2013, “2012 Report of the Competitive Skills Scholarship Program.”

Maine Department of Labor Director of Communication Julie Rabinowitz said CSSP was an anti-poverty program in conception that the 2008 financial meltdown doomed.

“The idea was to connect underserved communities with higher ed and change a pattern,” said Rabinowitz. “We were not expecting our program participants to have to compete in a competitive environment with so many unemployed degree-holders.”

She said the program was flawed from the start and will need serious reforms in order to justify its funding.

CSSP tax 3

Business owners will recognize the tax document (above) disclosing the sum all employers are required pay towards the Competitive Skills Scholarship Fund.

“The program contains no way to measure its effectiveness, it does not track people who exit, there’s no way to determine return on investment,” said Butera.

“It’s mind boggling.”

Rabinowitz said the state has no way of determining outcomes for the 160 participants who exited CSSP for “undisclosed reasons.”

“They didn’t drop out because they couldn’t pay for gas or for the car or insurance or for childcare, because all their services were paid for,” she said.

“Why would people drop out?”

[RELATED: 2012 “Fix the System” Report Shows Maine a National Leader in Welfare Dependency]

Butera said the Governor would be open to discussing the merits of CSSP, but because of the way the law is written there is no way to tell whether the program is meeting its goals.

CSSP was created in 2007 by the Legislature and became effective in April of 2008 as 26 MRSA chapter 25, subchapter 5. Lawmakers endowed CSSP with the goal of providing Mainers “access to post-secondary education, job training for industry recognized credentials and support leading to skilled, well-compensated jobs with anticipated high employment demand.”

Of 851 trainees enrolled in CSSP, 503 have exited and are no longer receiving funding from the program, leaving a total of 348 individuals enrolled as of December 31, 2012, according to the draft report.

Of the 503 individuals who have exited the program, only 202 individuals successfully advanced their credentials and 160 – or roughly one-third dropped out for “undisclosed” reasons, according to the report.

Another 50 people exited the program prematurely for diverse reasons such as incarceration, family issues, health issues or death.

[RELATED: Lewiston Investigation Finds More Than 50 Welfare Fraud Cases]

Three people exited the program because their household income exceeded 250 percent of the federal poverty line.

CSSP scholarships are in such demand the state must hold a lottery to determine who may be enrolled.

When determining applicants’ financial eligibility for the program, DOL excludes most forms of public assistance from its calculations. The following types of income will not disqualify a CSSP applicant: Unemployment Compensation, Child Support Payments, Social Security Old Age Survivors Insurance (OASI) & Survivor Benefits, Supplemental Security Income (SSI), Temporary Assistance for Needy Families (TANF), Capital Gains, Lump-Sum Inheritances, Tax Refunds, Earned Income Tax Credits, and Non-Cash Benefits, including but not limited to: Medicare, Medicaid, and Housing Assistance.

In other words, CSSP lottery winners can already be relying on the myriad government assistance programs available and that won’t affect their eligibility to receive more. And, to streamline the application process, all individuals who are already receiving Food Stamps are “categorically deemed” to meet the financial eligibility criteria of CSSP. Categorical enrollment places TANF recipients on the fast-track to receive even more public assistance.

The CSSP rules even require DOL caseworkers to advise program applicants about other available sources of welfare: “The case manager and the participant must identify public programs in addition to CSSP that could assist the participant in affording his or her education or training program. The case manager must review with the participant, at a minimum, the availability of the Earned Income Tax Credit (EITC), Food Stamps, and health coverage, and provide information about those resources to participants as needed.”

Other aspects of the program also steer applicants towards other welfare programs. For example, in order to become eligible for CSSP’s childcare assistance, individuals must agree to apply for “any publicly available funding for that care that may be available.” Applicants with children ages 3, 4 or 5 must be referred to HeadStart.

CSSP also covers participants travel expenses, auto repairs, car insurance. According to the rules governing CSSP, the program will reimburse particpants at 40 cents per mile travelled to and from a training or educational facility as well as travel costs incurred to pick up or drop off children at school or daycare.

CSSP will pay up to $1,000 per year for participants to repair their automobiles to state inspection standards; up to $1,000 per year to help cover the costs of minimum liability vehicle insurance; up to $350 in eye care-related expenses; up to $2000 of dental care not covered by other sources; a one-time contribution of up to $600 for the purchase of a computer and up to $40 per month for internet access. CSSP also provides up to $1,000 in emergency assistance.

According to the report, 41 percent of those funds were spent on stipends for CSSP participants. Only seven percent of the funds went toward childcare while 20 percent paid for transportation related costs. Only 29 percent of funding in those two years went toward training.

Of the 551 individuals who have passed through CSSP and on to an occupation, 31 percent were employed at time of application and 337 enrolled trainees had either exhausted their UI benefits or were otherwise determined ineligible to receive benefits.

21 percent of CSSP exits have selected jobs defined as “Healthcare Practitioners and Technical Occupations,” 11 percent chose “Community and Social Services Occupations,” while 10 percent of trainees chose jobs defined as “Management Occupations.”

Five CSSP participants landed jobs as “Cashiers” making $8.31 per hour. Another five scholarship recipients got jobs as a “Retail Salesperson” making an average of $8.85 an hour. Four individuals received training to become a “Personal and Home Care Aide” making $9.00 an hour. Four more started waiting tables for an average of $9.84 an hour. The program also trained 27 nurses and 21 truck drivers who made, respectively, an average of $21.62 and $11.88 per hour upon exiting the program.

The program’s average annual revenue, which is derived from a .06 percent tax on employers, is $3.1 million.

From 2010 to 2012, the program spent $6,089,246 on CSSP participants.

The Department of Labor is urging lawmakers to preserve the .06 percent income stream for workforce investment and apply it towards apprenticeship programs instead.

State House sources say the CSSP will be a large part of the discussion when the Labor, Commerce, Research and Economic Development Committee convenes Thursday afternoon.

S.E. Robinson can be reached at srobinson@mainepolicy.org

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About Steve Robinson

Steve Robinson is the former editor of The Maine Wire and currently producer for the Howie Carr Show. Follow him on Twitter @Stevie_Rob or send him an email at Steve@HowieCarrShow.com.

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