Maine might just be the most lavish state in the U.S. – at least when it comes to General Assistance.
As MHPC CEO Matthew Gagnon recently reported, one city in Maine, Portland, has been dramatically increasing the amount of General Assistance it doles out, and now accounts for nearly 60% of the expenses of this state-wide program.
But the mismanagement of General Assistance extends much farther than just Portland.
Intended to be a last resort for needy individuals and families, General Assistance is a catch-all type welfare program that provides vouchers for basic necessities such as food, rent, heat, electricity, and medication.
Although localities administer and initially pay the costs for this program, they are reimbursed by the state according to an irrational formula that actually incentivizes cities and towns to spend more, in order to be reimbursed at a higher rate. Governor LePage has proposed in his latest budget to reform this reimbursement formula, and reverse the motivation for municipalities to spend as many taxpayer dollars as possible.
But reimbursement isn’t the only area that could use reform — while most states (all but five who have GA programs) place frugal statewide limits on the amount of General Assistance that can be distributed to a single individual or household, Maine is much more generous.
Maine allows its maximum assistance level to vary by location, as it mandates that the maximum must be 110% of the applicable housing fair market rents.
This means that in the Portland HUD Metro Fair Market Area, which extends from Old Orchard Beach to Freeport, the monthly maximum assistance level is set at $762 for a household with one person, $901 for a two person household, $1,163 for a three person household, $1,463 for a four person household, and $1,565 for a household with five members.
The highest monthly maximums can be found in York, Kittery, Berwick, South Berwick and Eliot, which have astonishingly high maximum levels of $950, $952, $1,138, $1,656, and $1,801 respectively.
Not only are these levels constantly increasing (these figures are $19 higher than they were just one year ago) but they are significantly higher than maximum general assistance levels across the country.
In Vermont, a blue state known for its high levels of welfare and social assistance, there is no overall limit for General Assistance, but monthly payments for rent (which make up the bulk of general assistance) are capped at between $198 and $232. Groceries and personal needs are also limited to $28 for one person for fourteen days.
New York, another top provider of welfare, sets the limit for General Assistance by county, but its limits are much more fiscally responsible. For example, it limits monthly benefits in New York County to a reasonable $381 per-person, and only allows individuals to collect cash benefits for two years before they are only allowed non-cash vouchers and food stamps.
Not only is Maine an anomaly with how much General Assistance it allows per household, but it also stands out with how few restrictions it places on this program. Maine is one of just three states who determine eligibility solely on financial need. The state also places no time limit on General Assistance benefits, and allows recipients to receive medical assistance if they can prove financial need.
This absence of benefit restrictions, combined with the high maximum monthly allowances, and the backwards state reimbursement formula, have created a dangerous situation that incentivizes frivolous spending by cities and towns, and encourages Maine families and individuals to stay on welfare.
Just look at what is happening in Portland.
In 2013, the city of Portland served 4,376 people through General Assistance. In 2014, it served 13 less people, which was to be expected considering that it had nearly 4,000 less applications for assistance through the program.
But amazingly, in 2014, Portland spent over $300,000 more than it did in 2013.
So what does this mean?
It means that Portland is helping fewer needy people, unsurprising given that the economy seems to be on the uptick, but it is spending at an ever increasing rate, and giving out more money than ever before.
The city is providing more funds per-capita to those on General Assistance, which sadly is not an incentive to leave the welfare program.
While their intentions may be honorable, Portland, and the Maine General Assistance system, are effectively trapping families and individuals in the welfare system, and discouraging them from rising up and achieving economic success.
They are creating the opposite of the American a dream – a situation where you don’t have to work hard, and you’ll be given just enough to barely get by.
Change to this system is clearly needed, and Governor LePage’s proposal to reform the General Assistance reimbursement formula is a big first step in the right direction.
Hopefully Maine citizens embrace his idea, and recognize this is a much needed move to improve General Assistance and prevent Maine individuals and families from being stuck in our welfare system.