Downturn could strain welfare program

Officials fear growth in enrollment after years of decline under reform

October 17, 2001|By David Nitkin | By David Nitkin,SUN STAFF

An imminent economic slump will test the resilience of Maryland's 6-year-old welfare reform program, state officials said yesterday.

After years of decline, the state's welfare rolls have leveled off recently. But officials fear that the number of recipients could soon grow as unemployment rises and consumer confidence fades in the aftermath of the Sept. 11 terrorist attacks.

"You have to act with that possibility in mind," said Del. Samuel I. Rosenberg, a Baltimore Democrat who is co-chairman of the General Assembly's Joint Committee on Welfare Reform.

From January 1995 through last month, the number of Marylanders on welfare dropped by almost 69 percent, from 227,887 to 71,363. During most of that period, the state and national economies were in the midst of one of their most robust runs in history.

What remains to be seen is how the state's neediest residents are affected by any recession.

"We don't know what to expect," said Emelda P. Johnson, the state human resources secretary, referring to the effect on the economy of the terrorist attacks. Though state welfare enrollment has not increased, "we're watchful, as the country is, to see what impact this will have," she said.

Many former welfare recipients have jobs in fields sensitive to economic swings. According to a continuing study by the University of Maryland School of Social Work, many find work in restaurants, department stores and hotels.

"It seems to me that many of these are the types of positions you will see contract," said Catherine E. Born, an investigator with the university's Family Welfare Research and Training Group.

Economic forecasters with the RESI research group at Towson University are predicting a small increase in applications for Temporary Cash Assistance, the most common form of welfare, before spring, when they expect the state's economy to rebound.

Depending on the severity of any downturn, the cost of the program, budgeted at about $98 million this year, could increase by $4.5 million to $9 million, forecasters predicted.

It appears that Maryland could cover the added expense. The state has stockpiled about $82 million in surplus welfare funds in case of emergencies, said Sen. Martin G. Madden, the other co-chairman of the Assembly welfare committee. The Howard County Republican urged his colleagues and the governor "to resist any attempt to move that money for other purposes until we get a clearer picture."

Despite layoffs announced recently by many companies, applications for cash assistance have not increased. That might be because many former workers are receiving unemployment benefits, said Daraius Irani, an associate director of applied economics with RESI.

In January, the first state welfare clients will reach the 60-month time limit for benefits that is part of the reform initiative, but Charles Henry, executive director of the state Family Investment Administration, said that "no family will lose benefits because of an arbitrary time limit."

Federal laws allow 20 percent of the state caseload to continue receiving money through "hardship exemptions," which should provide help to chronically needy families until July 2004. After that, Henry said, a second layer of state-funded benefits would begin.

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