Since 2012, when Gov. Paul LePage and his allies successfully established a 60-month lifetime cap on federal welfare benefits, Maine has drastically reduced both its caseload and its spending.

The state still gets the same amount every year under the Temporary Assistance for Needy Families block grant program – about $78 million – but instead of shifting that extra money to other areas designed to assist low-income families with children, Maine has mostly sat on it.

In less than five years, the LePage administration has quietly stockpiled $155 million in unspent TANF funds, according to state budget data, an unused balance that has grown at a rate higher than any other state in that time. Maine’s total as a percentage of annual grant funding is among the highest in the country as well.

Meanwhile, extreme childhood poverty – defined as families making less than 50 percent of the federal poverty level, or about $10,000 – has increased in Maine during that time.

In 2011, the year before the administration’s major welfare reform push, there were an estimated 18,000 Maine children in extreme poverty. The number increased to 23,000 in 2014 before dropping back down to 19,000 last year, according to Kids Count, an annual report published by the Annie E. Casey Foundation.

Department of Health and Human Services spokeswoman Samantha Edwards, in an email this month, said the drastic reduction in caseload – from 13,300 in May 2012 to 5,200 this May – has indeed allowed the state to build significant TANF reserves. But she expects that will plateau this year and then be depleted gradually going forward as the state spends funds in other areas allowed under the program.

However, Edwards said even as the state begins directing its unused funds to other programs, it will still work to keep a solid reserve in case an economic downturn adds significantly to the TANF caseload, something that is less likely under the new restrictions.

“It is shortsighted to spend every dollar when there is a 4 (percent) unemployment rate,” she wrote.

As the state looks to use its federal funds in creative ways, it could face increased scrutiny. Just last week, DHHS was cited by the state auditor for improperly managing its TANF funds by trying to transfer $13.4 million over two years to another block grant, which is allowed, and use it to provide care for the elderly, which is not.

Poverty advocates said the need for public assistance remains great and the state’s measure of success should not be the number of people kicked off TANF.

“Maine is the poster child for just cutting people off and not connecting them with jobs or other prospects, and that gets billed as success,” said Liz Schott, a senior fellow with the Center on Budget and Policy Priorities, a national left-leaning organization, and an expert on the TANF program. “How can you call it success when poverty hasn’t gone down?”

TARGET FOR SOME, LIFELINE FOR OTHERS

TANF has been targeted for reform by many Republican governors in large part because it’s the only program that awards its benefits mainly in cash.

Maine DHHS Commissioner Mary Mayhew, speaking to reporters in June, seemed to imply that TANF cash assistance was being used only for unsavory purposes.

“There were higher poverty rates for children when all this money was simply going out in the form of a cash benefit to be used in strip clubs, to be used in gambling facilities, to be used to bail someone out of jail,” she said.

The LePage administration has made limiting cash assistance a priority. As recently as 2011, Maine spent roughly 60 percent of its TANF block grant on cash assistance. Last year, it was only 14 percent. The state has said it wants to shift the money away from a cash benefit and more toward job training and other assistance, but for the last couple of years, the money has sat in limbo.

TANF recipients and others contend that despite the rhetoric from some, there is value in giving welfare benefits in cash.

“There is research that shows that income matters to kids’ outcomes,” said Claire Berkowitz, executive director of the Maine Children’s Alliance. “This idea that families are going out and spending it on luxuries and extravagance just isn’t backed by evidence.”

Samantha Watson, a single mother and aid recipient from Parsonsfield, was surprised to learn of unspent welfare funds, asking: “How do you choose not to help people?” Brianna Soukup/Staff Photographer

Samantha Watson, a 25-year-old single mother of one from Parsonsfield, bristles at the idea that TANF recipients like her are squandering their benefit or that they can’t be trusted to spend the money responsibly.

Watson is enrolled in TANF’s Parents as Scholars Program, which provides tuition and child care assistance so she can go back to school. She commutes to Portland, where she’s studying nursing at the University of Southern Maine. She also receives cash assistance because she’s not working while completing her course work.

She receives $363 a month, which is the maximum for a parent with one child.

Samantha Watson is enrolled in TANF’s Parents as Scholars Program, which provides tuition and child care assistance so she can study nursing at the University of Southern Maine in Portland. “I knew it was the program for me,” Watson said. Brianna Soukup/Staff Photographer

Watson uses her monthly benefits for basic expenses: Gas for her car. Diapers. One day recently, she wanted to reward her daughter for doing well with potty training, so she bought her a 99-cent cupcake.

“I’m in the line waiting to pay and worried about people judging me for buying my daughter a treat,” she said. “How awful is that?”

Told the state has $155 million in unspent TANF funds, Watson was dumbfounded.

“I just don’t understand it, especially when I think of how many people this could help,” she said. “I can’t imagine where I’d be without this program. How do you choose not to help people?”

Edwards said the LePage administration believes steering people away from benefits is helping them. She said the 60-month cap passed in 2012 was the biggest reason for the caseload drop-off initially, but she said more recently the biggest reason has been recipients finding employment. Last year, slightly more than one-third (34.6 percent) of TANF case closures were because the recipient found employment – more than twice the national average of 16.9 percent.

Professor Anja Forche, right, speaks with nursing student Samantha Watson before a class in microbiology recently. Watson said she wanted to go back to school, but “it was so hard just going in for an interview.” Brianna Soukup/Staff Photographer

“It’s absolutely wrong for an able-bodied adult to stay on this program indefinitely. It’s a disservice to them, their children and the state of Maine,” she said.

But the auditor’s report last week shows that the LePage administration sought to use TANF funds in a way that would not benefit low-income families with children. Instead, it wanted to fund contracts for the Home Based Care program, which supports the elderly and adults with disabilities.

DHHS officials quickly dismissed the state auditor’s report as politically motivated. The auditor, Pola Buckley, was elected by a Democrat-controlled Legislature. In its report, the department said it went ahead with transferring the money because it didn’t have guidance from federal officials and always figured it could transfer the money back, which is ultimately what happened.

Christine Hastedt, policy director for Maine Equal Justice Partners, an organization that advocates for low-income families, said the state has made many changes to TANF and other programs without knowing what impact they will have.

“They are not justifying any of this to us and they don’t feel they have to,” Hastedt said. “They point to some little things they have done, but there don’t appear to be any outcome measures over there. There is no evidence that what they are doing is making a difference.”

STATE BUILDING A SURPLUS

TANF is best known as a cash benefit awarded monthly to low-income families, but that’s not all it is. Funds are used for job training, education, child care and other things. States have broad discretion under federal law to spend their share as they see fit – or to not spend it at all.

There are no prohibitions on states letting their TANF balances accrue. There is also no limit on how much money states can stockpile. Maine is not the only state that has a balance. Many states save unused TANF funds in case another recession hits and the assistance rolls swell unexpectedly. A state’s share of TANF funds does not change because of national economic factors. But Maine, under LePage, has built its reserves up faster than any other state. In 2011, Maine’s unobligated balance represented just 1.7 percent of its annual block grant. By 2013, that increased to 29 percent. By 2015, it was 118 percent, and this year it’s nearing 200 percent.

Schott said Maine’s balance – $155 million and growing – is far beyond what the state reasonably needs.

“If you compare it to how much each state’s annual block grant is, you can say, ‘How much of a cushion do you need?’ ” she said. “Certainly a three-to-six-month cushion would be appropriate, but Maine is nearing having a two-year cushion. And that would be fine, except the need is still there.”

Edwards, the DHHS spokeswoman, said the state does plan to start spending some of the money, but it will be spent differently.

“We now see it as an opportunity to redeploy these funds in a way that builds a broader system of support for low-income children and families,” she said. “You have to understand that in the past, caseloads were so high in Maine that we could not make any of these broader investments in supports. Instead, it was just cash going on EBT cards, often to people that had been getting it for 5-10 years or more.”

Some of the areas where DHHS is directing money include more funding for child welfare and foster care, domestic violence supports and tax credits for low-income individuals.

In some cases, though, the TANF funds are being used to plug holes in areas where there has been a shortfall.

Schott, whose organization has done a lot of work analyzing TANF to coincide with the program’s 20th anniversary this year, said it has largely failed in its two primary objectives: as a safety net for vulnerable families and as an effective program for getting people back to work.

There have been perennial efforts to reform the program. U.S. Sen. Angus King of Maine, who has seen the effects of TANF both as a governor and now as a senator, recently introduced legislation to mandate that states spend at least 60 percent of TANF funds on the law’s core purposes.

The legislation also would offer states an incentive to help TANF recipients enroll in education programs long enough to attain a post-secondary degree. Currently, TANF recipients can participate in educational activities for only 12 months before those activities count against their states’ work requirements.

“I think King’s bill is great because it would address some of these concerns,” Schott said. “Am I confident? No. This policy issue is so political now.”

Schott also said the Maine Legislature could certainly pass a bill directing the state to spend any or all of the accrued funds, but she doesn’t know if it would survive a veto by LePage, which is almost certain.

She said the state could also increase the maximum monthly amount of cash assistance, which hasn’t been adjusted in 15 years.

Edwards said Maine’s monthly maximum is in the middle of the pack for states, although it is by far the lowest among New England states, and she doesn’t see any push to change it.

POLICY CAUGHT UP IN POLITICS

Watson said she never imagined applying for public assistance in the first place. But when her daughter’s father left her, she moved back to Maine with nothing, not even a car.

Watson said she sought out the TANF program herself. She said DHHS all but discouraged her from applying, telling her the Parents as Scholars program was “tough.”

“I knew it was the program for me,” she said. “I’ve worked in retail since I was 17 so I knew I could go back to that, but I also knew that wouldn’t be able to support me and my daughter.”

Watson wanted to go back to school. She had some college credits so she wouldn’t be starting from nothing.

“It was so hard just going in for an interview,” she said. “That feeling like I didn’t have any value. I know it will be worth it in the long run but that’s no way to feel.”

Instead of making the programs accessible, she said, they put up more barriers.

On the other side, there is a lot of appetite from the public to reform welfare programs. LePage was re-elected in 2014 in large part because of his efforts to combat welfare abuse. More recently, DHHS has highlighted welfare fraud cases it has investigated.

“There is a lot of political gain to be made with reforming these programs but it really masks the serious problem,” Hastedt said. “The politics around these programs are so toxic that they have an impact on people’s willingness to apply even if they are in need.”

LePage administration officials, though, say they are moving in the right direction. One area of new spending planned for extra TANF funds is to create a program, “Breaking the Cycle,” that would help people return to work through upfront medical and psycho-social evaluations, wellness plans, job training, education, work experience, and subsidized employment. The state has budgeted $10 million for the next two years.

But the simple fact remains: the number of children who benefit from TANF has dropped from 22,425 in May 2012 to 8,461 this May. Yet there are at least twice that many children in extreme poverty – 50 percent of federal poverty level or below – and poverty.

Claire Berkowitz, executive director of the Maine Children’s Alliance, said kids ultimately pay the price for continued efforts to shrink assistance programs.

“I want to know what’s happening to these children who have lost TANF,” she said. “Because I don’t think they have been magically lifted out of poverty.”

Watson said she doesn’t mind speaking out about her experience, even if it outs her as a welfare recipient – an increasingly pejorative label.

“I know they want to believe that everyone is a cheat, that everyone is somehow gaming the system,” she said. “That’s not my experience. People are grateful. I think the state should be making things more accessible to people, not criticizing them at every turn.”

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