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If passage of the tax limitation initiative results in a 9 percent cut to public assistance grants, recipients will receive less than they did in October 1980.

Cindy Haag, director of the Assistance Payments Administration, said the Department of Social Services has "regretfully" included the cut on the list of steps that would be taken to reduce the budget by 12 percent - the amount projected by the Office of Planning and Budget. Haag's office would lose more than $4 million of the department total $14 million in state funds."It's tragic," Haag said. "We set the grants in 1985 and have never increased them. How many of us talk about the cost of living and inflation? Well, their (grant recipients') rent goes up, their food goes up, their utilities go up . . . . Now we're talking not only about not raising grants, but about reducing them."

The average family receiving Aid to Families with Dependent Children (AFDC), a mother and two children, currently receives a $376 grant. That would drop to $342. The federal poverty line for that size family is $775. Even with the average food stamp allotment of $142 - and not all welfare families receive food stamps - the family would live below the poverty level. The change would affect more than 16,000 grant recipients.

"It's below what they got eight years ago. How many of us would like to be cut back below what we made eight years ago?" she asked. "I'm bothered that tax limitation proponents say we're blowing smoke. We are responsible enough and care enough to look at the programs and see which ones we have to cut."

Haag said the decision on what to cut is made in part by programs that are federally mandated and can't be cut, like food stamps and energy assistance for low-income families, protective services and foster care placement. "So we look at our `optional' programs, like the Emergency Work Program and grant sizes, and we start to cut."

By cutting back 465 day-care slots for low-income families (but not those on AFDC), she said more children will be left alone, in substandard care situations or with children watching younger children. "And if a woman can't afford day care, she may quit her job and go onto AFDC."

Haag said some of the people cut out of one program will show up somewhere else in the system. Day care cuts may increase AFDC case-loads. Assistance cuts may affect the number of people treated in mental health and substance abuse programs.

"Something will happen. When you cut a program, people show up somewhere else," Haag said.