Maine governor to 'privatize' state's $62.5M welfare program

Posted Monday, September 12, 2016 5:20 am

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AUGUSTA, MAINE >> Republican Gov. Paul LePage wants to turn over the administration of Maine's $62.5 million welfare program to a New York City-based nonprofit that's faced a dozen state and federal lawsuits since 2013.

Fedcap Rehabilitation Services acknowledges 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.

Maine officials took public comment earlier this year on the plan and are in the process of finalizing the contract with Fedcap. They declined to comment this week on the organization. Fedcap also didn't respond to a request for comment.

Chris Hastedt of Maine Equal Justice Partners, a legal aid service, 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 says a contract with Fedcap could mean Maine's welfare program will see higher administrative costs and diminished quality.

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"Are you really going to give families what they need and ensure support services," asked 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?"

Democratic Rep. Drew Gattine, who chairs the Health and Human Services Committee, says the contract should include strong standards holding Fedcap accountable for helping people keep good-paying jobs.

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In its bid proposal, Fedcap says it's 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 has a "very strong track record serving people with multiple barriers," including the homeless, the organization says, and the Maine program will be run by a former Maine program leader, Christinei McKenzie. Fedcap says McKenzie will focus on creating a path out of poverty through work and job retention.

More than 4,000 Maine families receive assistance each month through the program, formally titled Temporary Assistance for Needy Families, according to recent federal data.

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The governor's efforts to reel in Maine's cash assistance program fueled his 2014 re-election and gained praise from the Heritage Foundation and American Enterprise Institute. LePage has tightened welfare rolls, combatted fraud and redirected flexible federal block grants to elderly Mainers instead of "able-bodied young adults."

In January, Bethany Hamm, director of the state Office of Family Independence, told employees the move to privatization comes from the state facing nearly $29 million in penalties for not meeting federal standards.

A U.S. Department of Health and Human Services spokesman said Maine hasn't yet had to pay any penalties and could work to avoid or reduce them.

The Maine Department of Health and Human Services, which includes Hamm's office, 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.

The proposed rules, which don't require legislative approval, are to be discussed Wednesday at a hearing in Augusta.