Think tank says state cuts off aid too early

Welfare study shows Maryland near bottom

February 26, 1999|By JoAnna Daemmrich | JoAnna Daemmrich,SUN STAFF

Maryland cuts welfare benefits more quickly than most other states, giving less of a chance to those making the transition from welfare to work, according to a new study that places the state near the bottom in the nation.

State officials take pride in having reduced their caseload sharply since welfare reform went into effect, from 227,887 recipients in January 1995 to 96,055 last month.

Many other states, including Alabama and New Jersey, allow welfare recipients to keep part or all of their government aid for a while after they start work. Marylanders lose 74 cents for every dollar earned the moment they get a job, more than in all but five other states.

On welfare, a Maryland family of three receives $399 a month. As soon as the parent gets a job paying $520 a month, the state halts all cash assistance, although the amount is less than half the federal poverty level.

At the $520-a-month cutoff, Maryland stops checks to welfare families at lower earnings than do 48 other states, according to the study released yesterday by the Maryland Budget and Tax Policy Institute, a nonprofit think tank in Silver Spring.

"We hear a lot about the success of welfare reform. But it's somewhat of a hollow victory if people remain extremely poor," said Steve Bartolomei-Hill, the institute's director, who wrote the report. "Right now, families are becoming ineligible for assistance when they don't have enough earnings to make ends meet."

State welfare officials say they offer other assistance, from medical insurance to day care vouchers, to make it easier for families leaving welfare. Officials say the state doesn't want to use up recipients' welfare time limit by giving smaller checks to tide them over when they get a job.

Every recipient faces a separate limit under welfare reform, one imposed for life. Recipients -- most of them women with children -- are eligible for cash assistance for five years. Once they use up those 60 months, they are taken from the rolls for good.

"We think extending [benefits] is a welfare solution to a nonwelfare problem; that is, when people leave, they often find themselves in low-wage jobs," said Richard E. Larson, a policy director for the state Department of Human Resources.

He faulted the study's conclusions, saying they were a "one-dimensional view of Maryland's program that fail to take into account many areas in which the state is ahead of others."

Maryland, for example, gives far more in cash assistance to welfare families than a number of other states that don't cut off benefits as quickly. The General Assembly also enacted a tax change last year that sends state refunds to the working poor, even if they don't pay income taxes. (A family of three making about $10,700 would get a refund of about $260.) Nine other states have similar laws.

Welfare advocates applauded the report, saying they hope it will be an incentive to change the strict earnings limits. They are pushing state legislation that would make the state's income deduction rate smaller, allowing people to receive some welfare assistance longer. Similar efforts, however, have failed in past years.

"We have to ensure that people who leave welfare have a better chance of staying in the workplace," said Del. Maggie L. McIntosh, a Baltimore Democrat who is sponsoring one of the bills. "This would enable them to keep a little more of their money when they transition off welfare."

Pub Date: 2/26/99

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