GOP Lawmaker Looks to Cap General Assistance Payments to Maine Municipalities for Fairer Distribution

House Minority Leader Billy Bob Faulkingham (R-Winter Harbor) has introduced legislation that aims to cap the share of state tax dollars that any one municipality may receive to cover the cost of administering General Assistance in a measure that appears aimed at Maine’s largest city and substantially the biggest spender on welfare — Portland.

In Maine, General Assistance is a municipal-level program designed to help low-income individuals cover a variety of basic expenses, including food, housing, fuel, and utilities. Assistance is distributed in the form of a voucher payment to the appropriate vendor.

The State of Maine is required by law to reimburse cities and town for 70 percent of the direct costs incurred as a result of their local General Assistance programs.

Currently, the City of Portland regularly receives the vast majority of state General Assistance reimbursements, accounting for 64 percent of total payments in FY24.

From FY19 to FY24, Portland received 80.7 percent of General Assistance reimbursements, accounting for more than $123 million in taxpayer funding.

Under Minority Leader Faulkingham’s proposal, no single municipality would be allowed to receive more than 50 percent of the state’s total General Assistance reimbursements.

Testimony offered both for and against LD 1274 identified Portland as the city that would most prominently impacted by this law if it were to go into effect.

The Maine Policy Institute (MPI) highlighted in their testimony supporting this legislation that Portland’s per capita General Assistance spending is 50 times greater than any other municipality in Maine.

“This imbalance is not sustainable, nor is it equitable for taxpayers across the state to be forced to subsidize a single city’s poor policy decisions,” the policy organization testified. “The General Assistance program is a cost-shared effort between state and local governments, but when one city persistently overspends and relies on state dollars to foot the bill, the burden is shifted to taxpayers statewide.”

“This is not an argument against compassion or assistance for the truly vulnerable,” Maine Policy Institute argued. “Instead, it is a call for fairness and proportionality.”

The Maine Department of Health and Human Services (DHHS) testified in opposition to LD 1274, suggesting that this legislation would amount to an “unfunded mandate” because municipalities would be required to continue providing General Assistance with or without state reimbursement.

“Meaningful reform will require changes to eligibility or benefits, not simply cutting off reimbursement for Portland while simultaneously requiring it to administer the program as it is designed in statute today,” DHHS said.

The Maine Municipal Association (MMA) also testified against this bill, suggesting that it would result in an “inequitable administration of the program.”

“Municipal officials acknowledge that the [General Assistance] program needs review and revision,” said the MMA. ” However, cutting reimbursement amounts, for any reason, for any community, only weakens the state-local partnership and erodes the entire program.”

When introducing this bill, Faulkingham raised concerns about he “fairness and sustainability” of the program statewide given Portland’s out-sized consumption of funding.

“When one municipality receives an overwhelming share of state assistance funds, it places an undue strain on the state’s overall budget,” he said.

“This reckless spending trend from our municipality is unsustainable,” said Faulkingham. “The fact that one city can consume such a disproportionate share of state resources is not only inefficient but unfair. By imposing a cap, we can ensure that state funds are distributed in a way that allows all municipalities to meet the needs of their residents, rather than allowing one city to dominate the available funding.”

He also suggested that the cap on General Assistance reimbursements would encourage municipalities to explore alternative methods for providing help to those in need, including through private donations and non-profit partnerships.

Faulkingham concluded by arguing that the imposition of a 50 percent cap would “ensur[e] that all Maine municipalities, from urban to rural, have access to the resources necessary to support their residents in need.”

LD 1274 will continue to be debated by members of the Health and Human Services Committee before they make their recommendations to the full Legislature.

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Disclaimer: The Maine Wire is a project of the Maine Policy Institute.