Maine Takes a Step Toward Real Welfare Reform

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In 2014 MEJP polled nearly 500 likely Maine voters and surveyed nearly 1,000 people with low incomes to ask their thoughts about poverty and how to reduce it in Maine. We learned that Mainers agree that the emphasis of welfare reform should be on expanding opportunity, not punishing people. Community forums held with people across the state last fall reinforced the survey result findings: Maine people believe that real reform should focus on building bridges to opportunity. Ultimately, the majority of legislators agreed and rejected dozens of punitive proposals that would have made life harder for people living on the edge. Plus, the Legislature took several positive steps toward making it easier for people to achieve economic self-sufficiency. 

The Administration and some legislators made it a top priority this session to shrink Maine's social safety net programs.  Dozens of so-called reform proposals sought to create barriers for people, including measures to restrict people’s ability to spend money outside of the state, pay cash for necessities, or purchase prepared food, such as a sandwich. Proposals like these would have done nothing to create economic opportunity and would have driven families deeper into poverty. Proponents of these policies failed to make the case for how these “reforms” would actually improve people’s lives.

Ultimately, the Legislature rejected these punitive measures masquerading as reform.  Instead, we’re happy to report that the following positive reforms were included in the final state budget:

  • Elimination of the “gross income test” for people who receive Temporary Assistance for Needy Families (TANF) who are transitioning into employment.  The gross income test abruptly terminates TANF assistance even when parents are still earning well below the poverty level, creating what is known as the “welfare cliff.” By eliminating this, parents will no longer be penalized for working, and they will have a better chance of working their way toward sustainable employment. 
  • Child care subsidies for working families will now be retroactive back to the date of application so that childcare providers get paid and child care arrangements don’t fall apart.
  • Transportation assistance for families leaving TANF was extended from 12 months to 18 months. Lack of transportation is one of the main reasons why families have a hard time finding and keeping employment, so this change is a step in the right direction.
  • The creation of family development accounts that match savings by families with low incomes for things such as a home or education. These accounts provide a way to build economic security and help to prevent emergency expenses from devastating a family just beginning to get on firmer financial ground.
  • The state’s Earned Income Tax Credit (EITC) it is now fully refundable. The EITC is designed to provide extra income to working people, assisting them in achieving economic self-sufficiency. By making the state EITC fully refundable, eligible working Mainers with low income will receive the full EITC benefit regardless of their tax liability. (For more on the EITC and other tax changes that occurred during this legislative session, we recommend this recent blog post by our friends at the Maine Center for Economic Policy.)

These are positive steps in the right direction, but they are just the beginning. The Legislature carried over LD 1268, An Act to Reform Welfare by Establishing Bridges to Sustainable Employment to the 2016 legislative session.  This bill included some of the proposals above as well as other initiatives that would promote opportunity and sustainable employment for parents with low incomes.  (Click here to learn more about why we support this bill.)

(August 2015)