PORTLAND – Portland officials are bracing for what could be a loss of millions of dollars in state funding that the city needs to fight homelessness, according to Mayor Mark Dion and the local congressional delegation to Augusta.

For years, Portland has grappled with how to find housing for thousands of asylum seekers that have come to the city.

During his Jan. 6 State of the City address, Dion painted a stark picture of where Portland was headed regarding helping the unhoused.

“We are running out of runway to meet the demand,” he said. “We are running out of space, our staff is stretched too thin, and we cannot expect our taxpayers to continue to shoulder the financial burden involved in providing these services where half of the unhoused come from outside of the city.” 

On Friday, Dion expanded on his comments, saying the city has accomplished a great deal, opening a new homeless services center and closing encampments throughout the city.

“I think we’ve gotten our arms around it so far as public encampments are concerned,” he said. “We’ve been incredibly diligent about making sure they’re not resurrected.”

But, he added, a change in state funding may present a new problem. Officials at the Maine Department of Health and Human Services are considering changing the amount the state contributes every year to Portland.

Officially designated General Assistance Proposed Rule #26, the changes will alter the amount of money Portland receives.  

Dion said if approved, the changes will cut $2.5 million in state aid for homeless services in the current fiscal year, and $4.4 million in the following fiscal year. This, Dion said, was what he meant in his address when he said city officials were “running out of runway.”

“Runways cost money, and if you’re taking away that kind of money, I am running out of runway, and I’ve been persistent and consistent in identifying this challenge as a regional one,” he said.

Dion isn’t the only one who feels the state bears a responsibility to help. A Dec. 4, 2024, letter was signed by nine local state representatives and one state senator. In the letter, sent to Ian Yaffee, director of DHHS’ Office of Family Independence, the lawmakers called the proposed funding cuts “unacceptable.”

“This proposed rule would drastically reduce funding received by the City of Portland for its emergency shelters, throwing an already vulnerable system into further jeopardy,” the lawmakers wrote. 

Dion said the cuts could particularly impact the center on Riverside Street, which opened in March 2023 and has been celebrated as an integral part of the city’s work to keep the unhoused off the streets.

Dion said the center costs roughly $87 a night per bed to operate. 

“They’re saying, ‘No, we think you can do it for $42 a night,’” he said.

There’s no way to properly run the center on that small a budget, Dion said. 

“It would be a big, heated room, with no bathrooms or shower facilities or food, and we could cover the floor with rubber mats,” he said. “I might be able to make it work for $42 a night that way, but that’s not a very humane practice to adopt if you’re trying to serve people coming in from the cold.”

Dion said he made his comments in his address after going to Augusta several times to plead the city’s case, only to find his protests falling on deaf ears.

“Budgets are about priorities, and clearly we aren’t the priority when it comes to the unhoused,” he said.

DHHS officials declined to be interviewed, but Spokesperson Lindsay Hammes said: “The department’s proposed rule reasserts its longstanding practice for shelter reimbursement.”