AUGUSTA – State General Assistance money for municipalities may run out before this fiscal year’s end if the Legislature adopts changes in a proposed budget for the Maine Department of Health and Human Services, an official told legislators Tuesday.

Gov. Paul LePage has proposed a $10.1 million cap on state General Assistance funding for the current fiscal year, which ends June 30. If it goes through, there could be a range of outcomes — “from being a couple months short to having sufficient funding,” Dale Denno, director of the DHHS’ Office of Family Independence, told members of the Legislature’s Health and Human Services Committee.

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Gov. Paul LePage Gabe Souza / Staff Photographer

“The proposal is to set that cap so that when the funds run out, neither the state nor the municipalities is required to continue to operate the program,” Denno said, calling the proposal one of the “tough choices” legislators face this session.

This proposal is one of a handful of changes LePage proposed to close a reported $112 million shortfall in the DHHS budget for this fiscal year. He proposed a number of changes to General Assistance last year, most of which were rejected by legislators.

Some Democratic legislators seemed cool to the administration’s General Assistance cap, which also continues into LePage’s budget proposal for the next two fiscal years. The administration has projected that would save $6.7 million over the period, which suggests it believes the cap will be reached.

General Assistance is a state-mandated, municipality-run program designed as a last resort to help people who can’t meet basic needs like housing, food and utilities. It’s funded by property taxes, and Maine reimburses municipalities 50 percent of costs up to $750,000, after which a higher reimbursement rate kicks in.

However, in the governor’s plan to close that $112 million shortfall, virtually all money comes from one-time fixes, including using money from a state reserve fund, a working capital fund, casino revenue and a two-week delay in school payments.

While there’s no limit on General Assistance fund expenditures in Maine, the $10.1 million amount is the limit the Legislature budgeted for this fiscal year, Denno said. That’s where the cap number comes from, he said.

When asked what is now in the fund, Denno said after his office pays out already-requested reimbursements to municipalities, $3.9 million of the budgeted amount will be left. Tuesday was 160 days before the fiscal year’s end.

Rep. Peter Stuckey, D-Portland, most aggressively questioned Denno, asking for specifics on projected costs.

“We would be, as I understand it, saying to folks who have fallen through all the other threads of the safety net and are down to the very last fibers, that after we reach an arbitrary cap, those fibers go away,” Stuckey said.

Denno said he couldn’t give those specifics for this year because the program is fluid, and residents can apply anytime. He said that though towns wouldn’t be required to provide assistance when the state goes past that point, they would have the option to step in to cover the difference.

If past numbers are any indication, the cap may create that need. In fiscal year 2011-12, the state spent $11.6 million on General Assistance, according to Nicholas Adolphsen, director of legislative affairs for DHHS.

In most years, about 12,000 Mainers receive General Assistance, he said.

Sen. Colleen Lachowicz, D-Waterville, said she was concerned the cap would disproportionately affect regional service centers like her city.

Doug Gardner, Portland’s director of health and human services, said because of high-density housing options, those with less means are likely to move to places like Portland, Bangor and Lewiston. Gardner said the proposal would leave municipalities with a tough choice between not providing assistance to poor residents or providing it all after the state hits its ceiling.

“Just because there’s a cap put in place doesn’t mean the need goes away,” Gardner said.