Motel Vouchers Way Over Budget

Three months into the fiscal year, the Department of Children and Families is in familiar fiscal straits. Despite tightening eligibility requirements, the Shumlin administration is forecasting that a temporary housing program that pays for motel stays for homeless people will end up nearly $3 million over budget.

Finance Commissioner Jim Reardon relayed the news to the House Appropriations Committee this week. Rep. Martha Heath, D-Westford, chairwoman of the committee, reacted with consternation.

“This number is eye popping,” she told Reardon at a hearing on Wednesday.

The motel voucher program cost the state roughly $4 million in fiscal year 2013. Taken aback by that figure, lawmakers and DCF officials both agreed the program needed to be reined in. For fiscal year 2014, they settled on an allocation of $1.5 million, while making other investments in preventive services.

To stay within its means, the department devised a point system to limit who could qualify for a voucher. But even with the stricter eligibility requirements, the program is on pace to cost $2.7 million more than the Legislature originally allocated.

Reardon said he still thinks the point system is working.

“(DCF Commissioner Dave Yacovone) is monitoring the rejections and comparing that to previous periods and it does appear the eligibility coworkers are scrutinizing more carefully than they have in the past,” he said.

But he acknowledged the situation warrants legislative scrutiny.

“You’re going to have to spend some quality time with DCF,” Reardon said.

“We will,” Heath assured him.

According to Yacovone, the department is rejecting 50 percent of the people who apply for vouchers. Last year, it rejected 40 percent on average. At the same point last year, 800 households had received vouchers. This year about 600 households have used the program.

So what explains the anticipated $3 million overrun?

Yacovone, who has three months of data (July-September) under his belt, said he can’t offer a definitive explanation yet.

“It is still fluid. I’m continuously looking at it (the data) and trying to assess it,” he said.

Yacovone pointed to two things that have contributed to the problem. The going rate for rooms at the motels where the state rents is up 11 percent. And people are staying longer — the average length of stay is 30 percent longer than it was last year, he said.

That’s perplexing, Yacovone said, because the department changed its rules last spring to limit stays. People could previously stay up to 84 days, but are now limited to 28 days. (The rules still allow people to stay up to 84 days during the event of an emergency.)

Yacovone thinks a reduction in Section 8 housing vouchers — a consequence of federal budget sequestration — might have something to do with it.

“I can’t say this conclusively, but I believe the reduction of 774 Section 8 housing vouchers is significantly impacting our data,” he said.

Meanwhile a private group has stepped in to pick up some of the slack. Fletcher Allen Health Care is footing the bill for homeless hospital patients who require continued medical attention but don’t qualify under DCF’s point system. And the Champlain Housing Trust, along with Fletcher Allen and a number of other organizations, bought a motel, which is being refashioned into a nonprofit-run temporary housing facility.

Yacovone expects DCF will save $250,000 by renting rooms at a lower rate from the Champlain Housing Trust. That has not been calculated into the budget adjustment estimate.