The city of Portland is suing the Maine Department of Health and Human Services over a shelter reimbursement rule that will cut millions of dollars in funding for the state's largest homeless shelter and others around Maine.
For months, Portland has been at odds with DHHS about the rule, which reimburses the city and other shelters around the state using a rental housing standard that provides $44 a night per bed.
Portland said it costs nearly twice as much to operate a shelter bed at the Homeless Services Center, and that the standard DHHS is using doesn't account for the costs of providing emergency services to those experiencing homelessness.
DHHS initiated a year-long review of Portland's general assistance program. It issued a notice of violation to the city saying Portland had been overbilling for shelter reimbursement. Last fall, DHHS initiated a change to the shelter reimbursement rule and argued that it represented routine technical changes that shouldn't require approval by the Legislature.
The lawsuit, however, argues that rules should be considered "major substantive." Portland Mayor Mark Dion said 60% of clients served at the Homeless Services Center last year came from towns outside Portland.
"This is not just an accountant's exercise to reduce the budget," he said. "They're making a decision that has true, life consequences for the residents of Portland and for the people we're trying to serve, on behalf of all these other communities that are either unwilling or unable to meet these needs."
Portland will lose anywhere from $4-$6 million with the reimbursement changes. The city is considering whether it should tap rainy day funds and raise taxes to cover the losses from the new rule, as well as cuts to federal and state funding.
"It's a catastrophic reduction in the fiscal capacity of our shelter system, and we can draw the line to where it might go," Dion said. "If we can't serve everyone, what does that mean for the community's public health and safety?"
The lawsuit, filed in Cumberland County Superior Court, seeks immediate relief and a stay from the DHHS rule. A spokesperson for the department declined to comment, citing active litigation.
