AUGUSTA, Maine — Gov. Paul LePage says he doesn’t understand the “hoopla” over his administration’s plan to privatize a $62.5 million welfare program in Maine.
Fifty-one jobs are on the chopping block due to the governor’s plan for a New York nonprofit to run the Temporary Assistance for Needy Families program, said Ramona Welton, president of the state’s employee union.
But the Republican LePage told WVOM-FM the contract is about providing “the most efficient, effective government at the lowest possible cost.”
“I just don’t understand what this hoopla is,” he said. “We are in the business to have a prosperous economy and that’s what we’re trying to do.”
He also said that the employees doing the job now could be doing the same job for the new contractor, Fedcap Rehabilitation Services because Fedcap is “going to hire Maine people.” But specifics on the hiring process have not yet been announced by the state or Fedcap. LePage’s office did not respond to an emailed request for comment Tuesday.
Welton said that since February, the state hasn’t responded to the union’s questions about the transition.
Maine’s Department of Health and Human Services this spring awarded the contract to Fedcap, which has expanded to New England in the last several years. About 6,000 Maine families each month received TANF benefits in 2015.
Christine McMahon, Fedcap CEO, said she couldn’t say whether the nonprofit would run Maine’s welfare program any cheaper than the state, but that they would follow standards that Maine officials have laid out.
McMahon said Fedcap’s model is focused on supporting individuals who want a “long-term pivot out of poverty.”
According to a bid proposal obtained by The Associated Press, Fedcap estimated it would hire for 140 positions and provide $10.4 million in salaries to Maine residents in the first year.
Early this year, Bethany Hamm, of health and human services, told employees that privatization was needed because Maine’s state-federal program faces to up $29 million in federal penalties for not meeting some standards for work participation. A U.S. Department of Health and Human Services spokesman said Maine hasn’t had to pay a penalty yet, and can work with the government to reduce or eliminate past penalties.
Hamm said the state would contract with a company with “expertise” to support families with technology and partnerships with established local groups.
Welton said Fedcap’s record of lawsuits raises concerns about its treatment of employees and whether it could effectively serve needy people. “The question is: Is this the type of company we want to be doing business with?” Welton said.
In its bid proposal, Fedcap said it has faced a dozen state and federal lawsuits about workplace issues since 2013 and paid out at least $403,000 in five settlements. McMahon said that $350,000 of that amount was for a slip-and-fall, and said Fecap is committed to its employees and quickly resolving issues.
The state has declined comment on Fedcap’s lawsuits.