When temperatures plunged below zero degrees in mid-January, Vermont’s homeless shelters filled up fast. Desperate to find more available beds, state workers turned to their next best option: local motels.

The number of subsidized stays spiked during the cold snap, but lodging the homeless is not just a winter phenomenon; it’s an all-season problem. During the last fiscal year, the state picked up the tab for more than 38,000 overnight stays in Vermont motels at a cost of more than $2.2 million — a 55 percent increase over the previous year.

And the problem appears to be getting worse: Gov. Peter Shumlin’s midyear budget adjustment proposal for the current fiscal year calls for a $2.1 million hike in the general assistance fund. Most of that will go to supplement the $1.6 million already budgeted for temporary housing, according to Deputy Commissioner Richard Giddings of the Department of Children and Families.

“I know that we are running hot,” Giddings admits. “I don’t know where we’re going to end up.”

In the meantime, some local motels have benefited mightily from the state’s growing homeless problem. At the urging of Sen. Tim Ashe (D/P-Chittenden), DCF generated its first-ever report on per-motel spending last December. Topping the list of moneymakers is the Ho-Hum Motel on Williston and Shelburne roads in South Burlington; the two roadside motels received a combined $211,842 for housing the homeless in fiscal year 2012.

Other winners include the Shelburne Econo Lodge ($184,732); the University Inn Motel & Suites ($173,318) in South Burlington; two Motel 6 locations in Brattleboro and Colchester, which cumulatively billed the state $146,970; America’s Best Inn in Brattleboro ($119,629); the Economy Inn in Rutland ($117,602); and Swiss Host ($102,015).

Ashe says he also asked for a report showing the rates paid to each motel, but the state couldn’t produce any data — only assurances that employees are negotiating to get discounts for homeless guests. When Seven Days asked for the same information, DCF’s Giddings blamed an antiquated computer system for not being able to provide it.

“At present one should be skeptical that they’re getting anything other than the retail price of the motel stay,” says Ashe. “They are probably crossing their fingers and hoping that they’re getting a good value, but there’s no way of knowing it.”

Three part-time contracted workers — called “reservationists” — handle all the bookings for the Burlington, Middlebury and St. Albans regions. Erin McSweeney, a supervisor for the state’s general and emergency assistance programs, says reservationists are in weekly contact with motels about their nightly and weekly rates, and routinely pit properties against one another to drive down costs.

The average rate paid for a night’s stay varies by region, from a high of $86 a night in the St. Albans area to an average of $50 per night in Rutland. In the Burlington area, the state paid an average of $56 a night in fiscal year 2012, for a total of more than $950,000.

In the Burlington area, McSweeney says a greater supply of motels lends itself to better bargaining. What’s the going rate? The majority of motel managers and owners contacted for this story either declined to comment or did not return repeated messages.

But Val Kumar, an employee working the front desk at the Econo Lodge on Shelburne Road, verified that his motel earns around $40 a night to house individuals on state assistance, about half off the regular rate that ranges from $69 to $89.

The program is a double-edged sword, he adds: While state reservations help fill beds, especially during slow winter months, Kumar says that some of the state clients are more trouble than they’re worth.

For instance, Kumar says motel workers often find evidence that many more people have stayed in the room than expected. Some guests refuse to honor “no smoking” rules in certain rooms or steal blankets or other motel property. He says the Econo Lodge maintains a short list of names of disruptive guests, and won’t accept people who have caused trouble in the past.

“We have to be very careful with them,” he says, adding these may be reasons some other motels don’t accept state-subsidized guests. He gestures across Shelburne Road at the Days Inn, which in 2012 only made $120 from the program.

Kumar mans the front desk inside the Econo Lodge’s tidy roadside lobby. There’s a television playing in the corner and a kiosk lures visitors with brochures for the Shelburne Museum, Jay Peak and other tourist attractions. A sign mounted above the front desk advertises free continental breakfast between 7 and 10 a.m. — but Kumar concedes it’s not part of the deal for guests sent by the state. He says the rate is too low to cover the additional food expense.

Giddings denies anything of the sort is happening. “We would not be housing people at hotels if they were being treated differently” than the general public, he says.

But homeless Vermonters who’ve stayed in motels claim the practice is widespread. The feeling, says 28-year-old homeless mother Ashley Sawyer, is that “‘You’re not even worthy of eating our stale doughnuts.’”

Giddings attributes the steep increase in state spending on motel stays — 78 percent from 2010 to 2012 — to new policies DCF rolled out in 2009. Previously, someone had to be suffering from a catastrophic loss of housing — caused by a fire, natural disaster or domestic violence — to qualify for free accommodations.

The new rules not only loosened the eligibility requirements, but also made it possible for more single, able-bodied individuals to tap into benefits.

Lawmakers aren’t alone in questioning that logic.

Mark Redmond, the executive director of Spectrum Youth & Family Services, says he’s glad people have a place to go. But he’s also concerned about potential fraud and abuse. He relates one story about a person on Spectrum’s waiting list who turned down an open shelter bed because he’d secured a free motel room. For Redmond’s clients — typically teenagers or young adults — a motel is likely more appealing than the shelter, where the wake-up call comes at 7 a.m. and occupants must participate in counseling and job training.

“We need the motels, but it’s got to be more tightly coordinated and monitored,” says Redmond. “The stories are legion. I don’t want to be the guy who is saying, ‘Close the motels,’ but we need to rethink the program.”

Meanwhile, nonprofits are beginning to explore how they might fill the gap.

“There’s no organization in Chittenden County that believes that overflow motels are the answer,” says Rita Markley, who directs the Committee on Temporary Shelter. “But for now, without another alternative, it would be inhumane … I feel very grateful that we live in a state that errs on the side of mercy and doesn’t want anyone to freeze.”

Markley believes most nonprofits agree that it’s time to come up with alternatives — and DCF apparently wants to hear them. They’re issuing a request for proposals in February or March to solicit ideas in the three communities where motel spending is highest: Burlington, Brattleboro and Rutland. Markley is still drawing up plans, but says COTS has something in mind that could reduce motel spending in Chittenden County by about 40 percent, which could instead be used to build transitional housing.

That’s already happening elsewhere. Massachusetts plans to phase out its own controversial emergency shelter program — which places around 1700 homeless families in motels — by June 30, 2014. In its place, the state is beefing up programs to prevent families from becoming homeless in the first place. Gov. Deval Patrick increased funding thirtyfold for a residential assistance program — to $8.7 million. The program provides flexible financial assistance up to $4000 over the course of a year to help families stay in their homes.

Massachusetts also plans to build 1000 new units of supportive housing, where residents would have access to childcare, job training and therapy. Meanwhile, in the run-up to its June 2014 goal, the state is tightening eligibility requirements for its motel program. One new requirement insists that recipients must be Massachusetts residents in order to qualify for assistance.

The Massachusetts model is the inspiration behind a bill coauthored by Ashe and Sen. Sally Fox (D-Chittenden), which Ashe hopes to introduce in the next few weeks. Following the Massachusetts example, he envisions shifting resources to improve up-front services to keep people in their homes. He’d rather see the money invested in longer-term solutions, including temporary housing that might include counseling, training and other supportive services.

“The equation changes,” says Ashe. “It’s not, ‘Oh, you’ve got a problematic situation. OK, we’ll put you up in a dingy motel room.’ It’s, ‘You’ve got a problem, and we want to help you.’”

Ashe isn’t the only legislator concerned about the sharp increase in temporary housing expenditures. Sen. Jane Kitchel (D-Caledonia), who chairs the Senate Appropriations Committee, calls the trend “very disturbing.” In the short term, she says, the conversation will be about how to pay the bills in the stretched-thin general assistance budget.

Long term? “We have apparently made a policy decision that has resulted in significant increases in spending,” says Kitchel. “Really, the question that’s going to be before us is: What is driving this? Who? What are the interventions that we already have in place? We’ll have to sort it out.”

(Disclosure: Tim Ashe is the domestic partner of Seven Days publisher and coeditor Paula