Md. welfare payments to be pared 10 to 30 percent reduction forecast for poor residents; 80,000 families affected; Exact amount depends on which bill president signs


Maryland is preparing to cut welfare benefits to poor families by 10 percent to 30 percent beginning Jan. 1 as the state absorbs "the first wave" of anticipated federal budget cuts, state Human Resources Secretary Alvin C. Collins said yesterday.

The exact amount of the reduction will depend on which of two welfare reform bills pending in Congress -- or some compromise version of the two -- is ultimately signed into law by President Clinton, Mr. Collins said.

He made clear, however, that even under the "best case" scenario, grants to the 80,000 Maryland families who receive monthly benefits from the Aid to Families with Dependent Children program will be cut by 10 percent.

"We don't see how we can get around some benefit reductions," he said.

If benefits are cut by 10 percent, a family of three would see their stipend -- $373 a month -- drop to $336. Under a 30 percent cut, the monthly benefits would fall to $261. The program is jointly funded by the state and federal governments.

Mr. Collins outlined the planned reduction in welfare benefits at a briefing for state officials and reporters on federal budget cuts. He said that under the welfare reform bills, Maryland will lose between $16 million and $50 million in federal aid next year.

In addition, he said, the state will have to spend an extra $27 million to meet new federal requirements to place welfare recipients in jobs.

That additional cost will have to be financed, at least in part, by cutting benefits, Mr. Collins said.

Gov. Parris N. Glendening, who attended the briefing, made clear that the state cannot afford to replace the money or programs lost as the result of a variety of pending federal actions. The latest estimate puts Maryland's potential loss of federal funds at more than $3 billion over the next seven years.

"Most people are still in the acute level of denial," the governor said as he chaired the first meeting of a new work group focusing on the cuts in federal aid. "They don't think anything is going to happen."

To spread the word about the potential effects of the federal cuts, Mr. Glendening invited reporters to attend the meeting and distributed a thick stack of charts detailing the potential effects of dozens of proposed cuts in federal aid to the states.

Next to each proposal was a description of their specific effect on Maryland.

Federal workers who live in Montgomery and Prince George's counties -- "a major part of the [economic] engine driving the state" -- are likely to be hit hardest first, the governor said.

The next wave will strike Baltimore, which -- with its high dependence on federal assistance programs -- could lose $700 million to $800 million from its economy, he estimated.

The final wave will be felt statewide as revenues decline and government services are scaled back or eliminated.

"We can't just hunker down and say we've lost these revenues but aren't going to make reductions," Mr. Glendening said. He warned several times that whatever cuts are made at the state level must be permanent: Once a program is eliminated, he said, it is not coming back.

One advocate for the poor predicted last night that the planned cuts in welfare benefits would be "devastating" to recipients.

"People who are just making ends meet now. They are holding on with their fingernails to keep their apartments," said Esther Reaves, director of Manna House, which operates a soup kitchen and homeless shelter in Baltimore.

"Somebody better take note of what is going to happen when all these people are on the streets," Mrs. Reaves said, noting that Manna House already receives 30 to 50 calls a day from people looking for shelter for the night. "It is going to cause a lot of homelessness."

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