February 13, 2013

Legislature's budget committee OK's $153 M budget plan

Spending plan will close state's budget gap

By Steve Mistler smistler@pressherald.com
Staff Writer

AUGUSTA -- After several days of back-room negotiations, the Legislature's budget-writing committee on Wednesday unanimously passed a $153.2 million supplemental spending plan that closes a gap in the state's current budget.

The unanimous vote bodes well for final action on the floors of the House and Senate before the close of the fiscal year June 30. Lawmakers need a two-thirds majority to override any potential veto by Gov. Paul LePage, should he object to any parts of the budget agreed to Tuesday.

The LePage administration proposed the budget in January. The Legislature has made changes to the plan, which included a series of cuts to education and health and human services programs. The shortfall was mostly the result of a $118 million funding gap at the Department of Health and Human Services, which overran projected costs for MaineCare, Maine's Medicaid program, by nearly $88 million.

The panel endorsed several of the governor's reductions but negotiated a deal that preserved the state-funded program that provides drugs for the elderly.

The committee also spurned LePage's proposal to cap General Assistance payments to municipalities at $10.1 million. Republicans and Democrats reasoned that the cut would not yield appreciable savings for the current budget year ending June 30. The decision does not end the debate about the General Assistance cap, however. LePage has proposed the same limitation in his two-year budget.

The budget approved in committee maintained the governor's proposal to cut $12.6 million in education funding to school districts this year and delays another $18.5 million in education aid until next year.

However, Republicans and Democrats finally settled a financially insignificant but politically sensitive proposal to exclude charter schools from the education cuts. LePage originally had exempted the state's two operating charter schools, but Democrats on the Education Committee tried to include the approximately $5,000 subsidy in the reductions.

Democrats argued that if public schools are going to endure cuts, so should charter schools. Republicans immediately cried foul, saying that the Democrats' decision, which did not include private academies, showed that the party wanted charter schools to fail.

The subsidy became a standoff of principles -- and later a negotiating tool -- between the two sides.

The budget shortfall was driven by overruns in the state's Medicaid program. More than $33 million was in savings initiatives passed by the previous Legislature but not realized, including Medicaid cuts that the federal government rejected recently.

The rejected cuts include nearly $15 million that would have been saved by making childless adults and 19- and 20-year-olds ineligible for Medicaid. Nearly $6 million would have been saved by removing parents who were just at, or 33 percent above, the federal poverty level -- $23,550 for a four-person family this year, according to federal data.

The budget committee made other changes to the governor's budget.

It preserved LePage's proposal to cut $65,000 from the indigent legal services, which provides legal defense for people who can't afford to hire a lawyer. However, the committee authorized the governor to fund the program by up to $2 million should he find money in the budget.

The panel also reduced the size of cuts in substance abuse treatment and mental health service providers. It also rejected $5 million in reduced reimbursement rates for rural hospitals and outpatient services.

The committee also restored half of the $1.4 million cut in state-funded subsidies for adoptions.

Steve Mistler -- 620-7016
smistler@pressherald.com
Twitter: @stevemistler

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