Maine Democratic lawmakers are seeking to prevent the state’s Department of Health and Human Services (DHHS) from reducing its reimbursement rate for municipal general assistance spending on emergency shelters, a matter largely having to do with Portland’s outsized spending on emergency homeless shelters through the welfare program.
General Assistance (GA) is a statewide welfare program managed by municipalities that offers vouchers for housing, food, and other essential needs to Maine’s most impoverished residents.
Under current state rules, 70 percent of GA costs incurred by municipalities are reimbursed by the state. The state also reimburses municipalities under the GA program for emergency shelter bed-nights for the homeless, at a rate tied to fair market rental rates for a studio apartment.
LD 1959, sponsored by State Sen. Rachel Talbot Ross (D-Cumberland) and cosponsored by nine other Democratic lawmakers, would:
- Retroactive to July 1, 2023, set the maximum GA reimbursement for emergency shelters at the actual cost of providing services, rather than the current “zero-bedroom rate” tied to federal fair market rents for a studio apartment;
- Prohibit DHHS from adopting rules that cap shelter reimbursement rates or impose restrictive eligibility periods for emergency housing assistance;
- Exclude emergency shelters from the definition of “lodging place,” which typically applies to temporary accommodations like hotels and motels.
The bill had a public hearing before the Legislature’s Health and Human Services Committee on Monday, May 19.
When introducing her bill before the committee, Sen. Talbot Ross testified that LD 1959 “seeks to remedy” a recent DHHS rule change that had the effect of almost halving the emergency shelter reimbursement rate to the city of Portland, from $84 per night to $48 per night.
“That reduction, as noted in public testimony to DHHS, will result in the City of Portland
losing at least $4.4 million annually for the emergency shelter services it currently provides for GA recipients,” Talbot Ross told the committee.
Talbot Ross claimed the DHHS “exceeded its authority” by changing the rule without engaging in major substantive rulemaking and therefore without legislative review prior to the rule’s adoption.
Kate Knox, a longtime lobbyist with Bernstein Shur and the City of Portland’s contracted lobbying counsel, testified in support of the bill.
[RELATED: Portland Lobbyist Admits State Budget Woes Will Mean ‘not a lot of new funding,’ Cuts to Agencies…]
Knox reiterated that the rule change will cost Portland an additional $4.4 million annually.
“Completely unsustainable,” Knox said. “We either go to property tax, or we start shutting down portions of the shelter.”
Knox argued that such a substantive change to GA rules ought to require legislative review, and that Talbot Ross’ bill would effectively “reset” the reimbursement rates to prior to the DHHS’ rule change.
The Portland lobbyist also stated that the matter is currently subject to pending litigation between the city and DHHS.
A DHHS audit of the City of Portland from last fall found that Portland’s Homeless Service Center (HSC) was requesting reimbursement for shelter bed-nights at a rate of $84 per night, based on operating expenses, including staffing costs.
The DHHS indicated that the incorrect billing resulted in $157,170 of ineligible expenditures claimed by the city for the HSC for February 2024 alone.
DHHS Opposition to Talbot Ross’ LD 1959
In a letter to the Legislature’s Committee on Health and Human Services dated May 19, Ian Yaffe, Director of the Office for Family Independence at DHHS, outlined the department’s opposition to LD 1959.
Yaffe argued that the bill’s removal of reimbursement caps would undermine fiscal responsibility, disconnecting GA payments from household composition and locally adjusted fair market rents.
He emphasized that the current reimbursement rate is based on U.S. Department of Housing and Urban Development data and adjusted annually.
Yaffe also expressed concern about reclassifying emergency shelters as distinct from temporary lodging, warning that this could create confusion for program administrators and municipalities.
Such a change might disrupt how financial responsibilities are assigned under GA regulations, potentially leading to disputes and inconsistent support for applicants, according to Yaffe.
The DHHS further noted that only one municipality—Portland—has sought reimbursement above the zero-bedroom rate, and this issue is currently under review in an administrative hearing and lawsuit.
Yaffe highlighted the significant fiscal impact of LD 1959, arguing that GA is “not an efficient mechanism” to address shelter funding compared to directly supporting individuals’ basic needs.
The Health and Human Services Committee on Wednesday voted to carry over LD 1959 to the second session of the 132nd Legislature, with committee chair Sen. Henry Ingwersen (D-York) indicating that changes were being made to the bill, though specific changes were not mentioned.
Read more:
- Portland City Council to Vote on Third Emergency Extension of 50-bed Expansion to Homeless Shelter
- Migrants Arrive at US Border With Address of Portland, Maine Shelter: Mayor Mark Dion on WGAN
- “People see us as different”: Portland Officials Bemoan State Lawmakers’ Reluctance to Fund City’s Homeless Shelters and Welfare Programs
- Portland Budget Woe: Decline in State, Federal Funding, Staffing Shortages, Shelter for Homeless and Asylum Seekers
- Bipartisan Maine Bill Proposes Higher State Reimbursement for Municipal Welfare Programs
