AUGUSTA — Gov. Paul LePage’s administration is close to finalizing a $62.5 million contract with a private out-of-state company to oversee one of the state’s major public assistance programs.
The nonprofit company, New York City-based Fedcap Rehabilitation Services, has been sued at least a dozen times in state and federal court just since 2013.
Fedcap’s contract proposal, obtained by the Maine Sunday Telegram, shows that the LePage administration wants to relinquish control of ASPIRE, an employment assistance program within the federal Temporary Assistance for Needy Families grant. It’s the latest in a long series of moves by the Republican governor to privatize services that have long been overseen by state government.
In January, state health officials said the move to privatize the ASPIRE program within TANF, a federally funded but state-run welfare program best known for providing cash assistance to low-income families, was necessitated by nearly $29 million in penalties the state faced for not meeting federal work requirement standards.
A U.S. Department of Health and Human Services spokesman, however, said Maine has not yet had to pay any penalties and could still work to avoid or reduce them.
Maine officials took public comment earlier this year on the plan and are in the process of finalizing the contract with Fedcap. The proposed change, which doesn’t require legislative approval, is to be discussed Wednesday at a hearing in Augusta.
Chris Hastedt of Maine Equal Justice Partners, an organization that provides legal services for low-income Mainers, obtained a copy of the bid proposal through a public records request and expressed general concerns with turning over the federal-state program to the nonprofit. She said a contract with Fedcap could mean Maine’s welfare program will see higher administrative costs and diminished quality.
“Are you really going to give families what they need and ensure support services?” said Hastedt, the group’s policy director. “Or are you just going to put them on a fast track to employment without regard to their circumstances?”
Fedcap Rehabilitation Services acknowledged its recent litigation in its bid proposal to Maine officials while also describing its accomplishments. Since 2013, it’s paid out at least $403,000 in five settlements, the organization says.
Court documents show the lawsuits include allegations of workplace discrimination and wage, disability and personal injury disputes.
Neither the LePage administration nor officials from Fedcap would comment last week on the proposal.
Democratic state Rep. Drew Gattine, House chairman of the Legislature’s Health and Human Services Committee, said the contract should include strong standards holding Fedcap accountable for helping people keep good-paying jobs.
In its bid proposal, Fedcap says it has secured more than 14,300 job placements for welfare recipients over the last three years, a record it says exceeds that of similar groups.
Fedcap also said it has a “very strong track record serving people with multiple barriers,” including the homeless, and said the Maine program will be run by a former Maine program leader, Christine McKenzie. Fedcap says McKenzie will focus on creating a path out of poverty through work and job retention.
Approximately 4,800 Maine families receive assistance each month through TANF and roughly 2,800 benefit from the ASPIRE program, according to recent federal data. But that number has dropped dramatically in recent years as the LePage administration has tightened eligibility requirements and also because of a 60-month cap on TANF benefits that is now in place. In early 2011, in the middle of the recession, there were more than 13,000 families in Maine receiving TANF benefits.
Maine receives a TANF block grant every fiscal year and the total – roughly $78 million – has remained unchanged for many years.
However, Maine has spent less and less of its grant funds on cash assistance and has used more of the money for things like job training, education and transportation.
TANF rules give states considerable discretion to adapt the program to their specific needs and that includes an option to privatize.
The governor’s efforts to reel in Maine’s welfare programs fueled his 2014 re-election and have gained praise from conservative organizations like the Heritage Foundation and American Enterprise Institute.
LePage has tightened welfare rolls and has put an emphasis on combating fraud within public assistance programs.
His administration also has redirected money from flexible federal block grants, including the TANF grant, to elderly Mainers instead of “able-bodied young adults.”
The Maine Department of Health and Human Services also is proposing new welfare rules that would tighten requirements for recipients seeking jobs while also increasing assistance for auto repairs and books and supplies.
– Staff Writer Eric Russell and Marina Villeneuve of the Associated Press contributed to this report.
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