The number of Maryland families that need government help to make ends meet has reached record levels, but funds for the state's safety net are being cut.
More than 700,000 Marylanders receive food assistance, the most in state history. A record 70,000 people depend on emergency cash assistance. And demand for the state's child-care subsidy program is such that officials imposed an indefinite freeze on new applicants.
Yet state and federal officials are budgeting less money for the safety net in the coming fiscal year. The move reflects the government's confidence in the economic recovery, based in part on the fact that demand appears to have leveled off for most state-administered assistance programs.
Others question whether it is overly optimistic to cut back at a time when the state's assistance programs still are swollen with unprecedented numbers.
"It took from January 2008 to February 2012 to double the number of people enrolled in the Food Supplement Program," said Neil Bergsman, director of the Maryland Budget & Tax Policy Institute, a nonpartisan budget analysis organization. "It's not going to go down all that way in one year."
Bergsman questioned whether the Maryland Department of Human Resources is projecting positive estimates to help balance the state budget — a constitutional requirement in Maryland. The state faces a $1.1 billion deficit that legislators hope to eliminate over the next two years.
Pat Hines, the department's director of communication, said the budget was "our best projection of what the citizens of Maryland need in the next fiscal year."
"We think that our budget is accurate," Hines said. "And we're optimistic about the direction of the economy and of our numbers."
However, a report by the Department of Legislative Services' Office of Policy Analysis suggested that services to needy families could be affected since funding meant for them is being diverted to pay off shortfalls from previous years.
Demand has been so high that the Department of Human Resources, which helps Maryland families with child care, cash and food assistance, and medical services, was forced to request an additional $30 million in state funding in fiscal 2012. The shortfall occurred even though federal funding for the department rose to nearly $2 billion from $1.73 billion in 2011 and $1.25 billion in 2010. (From 2006-2008, federal funding was roughly $1 billion each year.) An emergency fund created by the American Recovery and Reinvestment Act of 2009 to help states with rising demand also ran out by December 2010.
Should need rise again and exceed the budget, Hines said, the department would again seek supplemental funds from the legislature.
While the numbers of needy families are higher than at any other point in Maryland history, the figures do not include the thousands of households that depend on food banks and charities because their incomes are too high for public assistance. To qualify for public assistance, a family usually has to make no more than twice the federal poverty level, or $40,000 for a family of three.
Food banks and other charities report serving up to twice as many people — many of them middle-class families that have never before sought help.
"A lot of our agencies are telling us that people who a couple of years ago were writing checks and supported the local food pantry are now coming to get food," said Deborah Flateman, CEO of the Maryland Food Bank.
Nor do the figures include the families that aren't aware they qualify for assistance. Cathy Demeroto, director of Maryland Hunger Solutions, said her organization is working to educate these families on the programs available to them.
Demeroto estimates that about 90,000 people in
"I certainly think the need still exists," she said, "and it's too early to predict what's going to happen with the economy."
The federal food assistance system is an entitlement program, which means the Maryland Department of Human Resources accepts any qualifying applicant and bills the federal government. Programs funded by state funds or block grants, however, have seen their surpluses evaporate as enrollment has skyrocketed.
Maryland's surge in demand for food assistance between January 2007 and 2012 is the fifth-highest increase in the country — although the number of new applications has stalled in recent months, according to the Food Research and Action Center, a Washington-based nonprofit advocacy group.
The state's assistance programs have seen an influx of applicants like Ryan and Amanda Velivlis of
The Velivlises thought they had planned wisely by paying off debts and cutting up credit cards before starting a family.
"I didn't want to drown in debt," Amanda Velivlis said. "I just didn't want to get into a trap, fall into a hole. I think with a lot of other families, that is where a lot of people get in trouble."
Yet they found that they still couldn't stretch Ryan Velivlis' $34,000 annual paycheck as a restaurant manager to cover their basic monthly costs.
So the family has had to apply for a number of assistance programs to get by.
While Ryan Velivlis receives health insurance for himself through his employer, he can't afford to cover his family. Amanda Velivlis and their daughter, Evelyn, are enrolled in the state medical assistance program. Amanda attends the
Even though the Velivlis family benefits from these programs, it doesn't qualify for the state's Temporary Cash Assistance program, which provides money to struggling families with children. To qualify, the Velivlises would have to make about $10,000 less than they do today — which would be a bigger strain for a family already cutting costs wherever possible.
Cash assistance is one of the largest programs threatened by increases in demand. While programs such as food assistance receive necessary funding no matter what, the state has to cover the remaining costs in the cash assistance program when demand exceeds the funding.
Between fiscal years 1997 and 2001, the state saved unspent federal dollars and built up a $130 million emergency fund in the cash assistance program, according to the Department of Human Resources. Over the next decade, the department spent more than it took in, and the reserves dried up.
But demand kept rising, triggering a shift in funds. The state started borrowing money from the next year's budget to cover increased cash payments. But that forced officials to operate with depleted resources the following year, leaving them in the same lurch.
Each time, part of the federal grant was diverted from needy families to balance the state budget, according to the Department of Legislative Services' Office of Policy Analysis — which predicts the cycle will continue until demand drops.
Because it has had to request supplemental funding, the program faces a projected $30 million shortfall at the end of this fiscal year in June, the office said. But a drop in demand would let the state close the shortfall and stop borrowing money from future budgets.
"Our expectation is that the numbers will return to pre-recession levels as Maryland's economy continues to recover and grow," said Hines of the Department of Human Resources.
Cash assistance is meant to be a temporary solution. Families that qualify are limited to a total of five years — 60 payments — and also are required to participate in work programs. Today, the record-high 70,000 Marylanders signed up for the program constitute a 40 percent increase from 2008.
"We really did see a pretty significant pop in enrollment," said Vince Kilduff, deputy executive director in the Department of Human Resources' Office of Programs.
Yet those enrolled represent just a third of those who applied. Most of those who were denied didn't qualify or didn't follow through after applying, Hines said.
One trend working in the department's favor is that nearly twice as many people are leaving the program as signing up for it. At the current rate, officials predict, the federal grant alone will cover next year's demand and this year's deficit.
But Bergsman, who worked in the Department of Budget and Management from 1988 to 2004, said the numbers may still be too optimistic.
"When I was in the budget office, there was a great temptation to use favorable assumptions for spending estimates so that we would not have to cut other stuff as much, and I don't imagine that it's any different today," Bergsman said. "So you can have an estimate that is in the reasonable range, but you can pick the lower end of that range."