Maine Governor Revives Old Rule To Punish Poor People For Saving Money

Gov. Paul LePage (R-ME) CREDIT: AP PHOTO/ROBERT F. BUKATY, FILE
Gov. Paul LePage (R-ME) CREDIT: AP PHOTO/ROBERT F. BUKATY, FILE

Maine Gov. Paul LePage (R) has already knocked tens of thousands of people of his state’s food stamps rolls through a variety of stringent new rules for the program, but he’s not done. At a hearing Tuesday, state officials will lay out a new barrier to entry for Supplemental Nutrition Assistance Program (SNAP) applicants that most other states have abandoned in recent years.

Under the new rules, anyone without dependent children who’s managed to save $5,001 will get kicked out of the SNAP system, losing access to a benefit that averages $116 per person per month in Maine. The asset test will look at the combined value of a person’s bank accounts, second vehicles, and recreational property like snowmobiles. The state intends to exempt several categories of assets from the test: The value of a person’s burial plot or their tax-exempt savings accounts for retirement and education won’t be counted as evidence they’re too well-off to receive food stamps. Personal homes and a household’s primary vehicle are also excluded, but additional vehicles or residences count against an applicant.

But for households without dependents that have managed to sock away emergency savings, the new rules will require spending down those savings before receiving a meager food allowance from the government. And for the many who have no such savings, Center on Budget and Policy Priorities food stamps expert Stacy Dean told ThinkProgress, the policy discourages them from building up assets that can make them more self-reliant.

“It forces people to choose between saving to create financial stability for myself and my family, and participating in this program,” said Dean. The hardest-hit population will be the very same people intended to be buoyed by SNAP and other safety net systems: low-wage workers, retirees, and the disabled.

“Families with earnings, let’s say their hot water heater breaks. They have the capacity over time to earn those savings back. But a senior or a person with a disability who isn’t out in the workforce can’t replace those savings,” she said. “Forcing low-income families and seniors to be more financially precarious is not a good way to help maintain their independence.”

And because low-wage workers often have a hard time accessing unemployment insurance due to their shifting schedules — and see only a meager replacement income from the system when their claims do succeed — the asset tests force many people who lose their jobs to exacerbate that economic trauma by blowing through savings before seeking food stamps.

These deficiencies in the asset test system have helped shift states away from using the rules in recent years. Scores of states have dropped the tests since 2008, Governing.com reported in May, after changes to SNAP rules in the federal Farm Bill “signaled to states that Congress saw asset limits as contradictory to the spirit” of food stamps.

LePage’s bureaucrats are painting it a bit differently. “When people see that some are using welfare as a first line of defense to keep their boats and motorcycles, rather than using welfare as a safety net, it hurts the public perception of the program,” state Department of Health and Human Services (DHHS) Commissioner Mary Mayhew said in a release announcing the rule.

“Maine and other states have simply been accepting a federal waiver of [asset tests] since the recession,” state DHHS spokesman David Sorensen said in an email.

DHHS officials estimate that 8,600 Mainers currently enrolled in the program would be removed from the system by the new $5,000 asset limit. The estimate comes from self-reported assets data that Maine has continued to collect even while the asset tests were off the books, Sorensen said.

But the actual number of people affected by the change in the application process will be far larger, if the experiences that have led many other states to abandon such tests are any guide.

In Pennsylvania, about 4,000 households of people were removed from the SNAP rolls because their assets exceeded the thresholds established by former Gov. Tom Corbett (R). But almost 30 times that number of households were denied simply because they failed to provide all the paperwork required by the tests: 111,000 applications were rejected without being fully considered because of documentation issues stemming from the assets rule.

Corbett’s successor Tom Wolf (D) rescinded the tests in April. Wolf’s decision reduced the number of states that maintain asset tests to 14. The rest use a system called Broad-based Categorical Eligibility, under which a person’s enrollment in another means-tested welfare program like Temporary Assistance for Needy Families (TANF) is taken as proof they are eligible for SNAP. The TANF eligibility rules include their own form of an asset test, so opting to screen applicants’ savings a second time before approving them for food assistance is redundant.

Shrinking SNAP also undermines economic activity overall. The program generates about $1.80 in economic activity for every dollar of benefits provided. It is among the most stimulative forms of federal spending. And since benefits dollars come from the federal government rather than state coffers, Maine is rejecting a form of economic stimulus that’s essentially free money. In the process, the state will spend more to process applications and make more errors in processing them.

LePage’s commitment to shrinking safety net enrollment is deep. He’s imposed drug tests, reinstated full work requirements for SNAP even though his state’s economy was still in poor enough health to qualify for a federal waiver, and sought permission for an unworkable “junk food ban” for food stamps.

It’s working, from the conservative governor’s perspective at least. Maine’s food stamps enrollment has fallen from about 250,000 in fiscal year 2011 to barely 200,000 as of this August. “Maine ranked #1 in the nation for its reduction in food stamp dependency in 2014,” Sorensen noted by email.