The state Department of Human Services will make 12 percent across-the-board cuts to federal welfare grants given to nonprofits and others that help low-income families and individuals.

In a letter this month to nonprofits and other providers who get federal welfare money through the state, Lillian Koller, the department's director, wrote "While a 12 percent funding cut will present challenges for many of our community partners, it is certainly preferable to the alternative of eliminating funding altogether, as we had feared."

The cuts are in response to a decrease in the amount of federal welfare money the department can spend next fiscal year, which begins Tuesday. State lawmakers restricted the department to spending $22 million less than it wanted to keep a substantial reserve fund.

Lawmakers said they wanted to prevent the depletion of the reserve in case of a potential surge in welfare cases because of the downturn in the state's economy.

In her letter, Koller asked providers to help the Lingle administration persuade state House and Senate leaders to lift the restrictions next year.

HARDSHIP FOR SOME

Mary Scott-Lau, executive director of Women in Need, said federal welfare money accounts for more than half of the nonprofit's budget. The nonprofit provides parenting, anger management and life skills classes along with transitional housing for women leaving prison or reuniting with their children after experiences with domestic violence or substance abuse.

Scott-Lau said the 12 percent cut will be a hardship but described it as the fairest way for the state to make the spending restrictions.

"Nobody wanted any of their money cut, because we all depend on that to run services, to hire people, and to provide more things for our people in need," she said. "But I really and truly feel that's probably the fairest and easiest thing that could have been done for all of the nonprofits. Even though it will be a hardship for all us, it's not terrible. It's not the end of the world."

The state receives about $98 million a year through a federal welfare block grant — known as Temporary Assistance for Needy Families — and any money not spent on cash assistance and other welfare programs goes into a reserve fund. The Lingle administration had proposed spending $138 million in federal welfare money next fiscal year through a combination of the block grant and reserve money.

Lawmakers reduced that amount because of concerns about the future level of the reserve.

Over the past several weeks, the administration and majority Democrats have traded punches on talk radio and newspaper opinion pages over the need for the spending restrictions.

In a bit of philosophical role reversal that has made some Democrats uncomfortable, Republicans want additional spending on social-service programs while Democrats are calling for fiscal restraint.

State Senate Minority Leader Fred Hemmings, R-25th (Kailua, Waimanalo, Hawai'i Kai), said the federal welfare money has been going to programs that help prevent people from depending on the state for cash assistance. He said the spending restrictions are "mean and cruel.

"Lillian Koller is trying to keep all of these services intact," Hemmings said.

But over the past few years, Democrats have pressed Koller over her use of federal welfare money for art, music, robotics and cultural programs.

'THE EASY WAY OUT'

State Rep. Marcus Oshiro, D-39th (Wahiawa), chairman of the House Finance Committee, said the administration should prioritize spending on nonprofits that are the most effective at helping people out of poverty.

Rather than direct welfare money to nonprofits with measurable results, Oshiro said, the administration is suggesting all the programs are equal by making an across-the-board cut.

"That just takes the easy way out and the irresponsible way out," Oshiro said.

State Sen. Suzanne Chun Oakland, D-13th (Kalihi, Nu'uanu), chairwoman of the Senate Human Services and Public Housing Committee, said she is pleased that Koller is trying to preserve all of the programs because she does not want to see any eliminated. But, like Oshiro, she said the administration should measure which programs are working best.

"They really need to evaluate the effectiveness of those programs," she said.