Dec. 13 – Portland and state officials clash over millions of dollars in annual funding for General Assistance, the safety net program that pays for shelter and other basic needs for residents who can’t afford them.
Portland’s mayor says the state is proposing a rule change that could cost the city $4.4 million a year in reduced funding for emergency shelter operations.
“This proposal would reduce state reimbursement for local emergency shelter costs, weaken Maine’s emergency shelter network and further endanger the people who need it,” Mayor Mark Dion wrote in a Nov. 25 letter to the director of the state Office of Family Independence . at the Department of Health and Human Services. The change could mean a reduction in services this spring or a 5.5% increase in the municipal portion of the city’s tax rate, the city said.
However, state officials say the proposal would simply codify long-standing policy and that Portland has charged the state more funding than it should.
The dispute is the latest in a long line of conflicts between the city and state over funding for general assistance to support local shelters, which house residents from across the state and beyond.
STATE: CITY IN VIOLATION
The state sent Portland a notice of violation in September, saying the city is not complying with the General Assistance statute and that requests for shelter reimbursement for the Homeless Services Center on Riverside Street have exceeded the maximum allowable amount. The violation notice does not specify how much funding the state believes Portland improperly received.
The state said the maximum amount the Department of Health and Human Services can reimburse for a stay at the city’s shelter is based on the rate the agency sets for a studio or efficiency apartment, a standard known as the ‘zero bedroom rate’.
That means the maximum that can be reimbursed per bed per night at the HSC is $44, according to the state’s notice, which says Portland has applied for reimbursement at a rate of $84 per night, determined by the shelter’s operating costs.
In February alone, the state said the city claimed $157,170 in ineligible expenses for reimbursement.
General assistance is distributed at a local level to residents who cannot pay the rent or keep the heating and lights on. Under state law, municipalities can receive 70% reimbursement from the state for eligible General Assistance expenses.
General Assistance housing rates are published each year by the department based on fair market rent figures from the federal Housing and Urban Development Department. Municipalities can adopt these rates or propose them themselves, subject to approval by the DHHS.
The state also said that under a 2015 agreement with the city, the zero-bedroom rate must be prorated to a daily rate for anyone staying in a municipal shelter.
But the city, which is appealing the violation notice, has argued that the 2015 plan did not include a specific formula for calculating rates and that there is nothing in the city code or General Assistance statute and rules that requires a sets a maximum rate for emergencies. shelters. The rules also state that municipalities may have to disregard the rates in an emergency, the city said.
“The department’s reliance on the zero-bedroom rate of $44 per night by 2023 does not ignore the fact that the city’s reimbursement requests related to the (Homeless Services Center) are not for rental housing, but for emergency shelter costs,” the city wrote in a September message. 23 response to the announcement.
The city also said the $84 per night accurately reflects the actual costs to operate the shelter, including rent, utilities, routine maintenance and essential supplies. That total does not include ineligible expenses, such as administrative costs or costs related to other services offered at the center, in addition to overnight shelter.
ARE RULE CHANGES AND DISPUTES RELATED?
It is unclear whether the rule change, which the state posted online on Nov. 6, is directly related to the violation notice. The proposal makes several changes to the general assistance rules, but the part the city has particular trouble with seeks to add language specifying that municipalities are limited to the “zero bedroom rate” for reimbursement in emergency shelters.
According to DHHS spokesperson Lindsay Hammes, the department reimburses all municipalities for emergency shelter beds based on the zero-bedroom rate. Only six municipalities in the state have requested shelter reimbursement so far this fiscal year, she said.
“We are not aware of any other shelter receiving more than the zero-bedroom rate for an eligible single person as reimbursement through GA,” Hammes said in an email, adding that as of Oct. 1, the applicable rate for reimbursement in Portland should be $48 per night, but the city has asked for $84 per night.
“The department’s proposed rule reaffirms long-standing shelter reimbursement practices,” Hammes said.
She said the department could not comment further due to the continued appeal of the notice and because the rule is currently being adopted. It should be completed within the next few months, Hammes said.
Dion, the mayor of Portland, said he couldn’t speculate on why the rule proposal emerged, though he noted the timing appeared to coincide with the notice to the city.
“It would be one thing if they gave us a notice of violation: we have an opportunity to respond and have a hearing and we discuss a rule that we all agree on,” Dion said. “But now we’re trying to challenge a decision made under a rule that now seems to be subject to something completely different. It’s like, can we resolve one issue before deciding another?”
CITY SAYS RULE UNDERMINES EFFORTS
City officials say the new rule would result in cuts to services or a 5.5% increase in the municipal portion of property taxes.
It also comes as Portland has significantly expanded its number of shelter beds over the past two years. The city opened the Homeless Services Center in March 2023, increasing its capacity by 54 beds compared to the old Oxford Street Shelter. And in May of this year, the planning board approved an expansion of another 50 beds.
Late last year, the city also opened a new 179-bed shelter for asylum seekers in Riverside.
Still, the amount the city spends on general assistance fell by about $8.2 million between fiscal year 2023 and fiscal year 2024, and the amount of state reimbursements to Portland fell by about $10 million, as the city reduced operating costs by to refrain from more expensive expenses. temporary housing options such as hotels.
In fiscal year 2024, Portland spent $22.4 million on general assistance, of which $11 million was reimbursed by the state.
“Rule #26 would ultimately undermine the City of Portland’s recent efforts to increase shelter capacity so that beds could be made available to people sleeping in large encampments, which posed serious health and safety risks,” Dion said in his letter.
Preble Street, a nonprofit social services agency that operates three shelters in Portland, has also expressed concerns about the rule. The agency receives general assistance funds through the city to help pay for shelter beds.
“Our shelters are not adequately funded,” said Andrew Bove, Preble Street’s vice president of social work. “We have to raise the funds, and I think that’s the case with shelters across the state. It’s tough out there. So anything that tries to limit shelter access in terms of funding, we have a problem with.”
Dion, a former state lawmaker, has argued that the rule should be considered a “major substantive rule” that requires review and approval of the law, as opposed to a “routine technical” rule that can only be finalized by an agency. “The legislature may not agree with us, but that is the right forum to have this conversation,” he said.
Portland’s legislative delegation has also written to the state opposing the rule, saying it should be considered a major substantive rule.
“The proposed change will place an undue burden on municipalities and nonprofits across the state that are currently struggling to provide emergency shelter services,” the delegation wrote in a Dec. 4 letter. “Furthermore, now is not the time to create regulations that will have an immediate, far-reaching and negative impact on unhoused people.”
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