February 7, 2013

Legislators working to close spending gap, resolve conflict over budget proposals

LePage administration has proposed $153.2 million in adjustments to meet 2013 budget gap

By Michael Shepherd mshepherd@mainetoday.com
State House Bureau

and Steve Mistler smistler@pressherald.com
State House Bureau

AUGUSTA -- The Legislature's budget-writing committee was expected to work into the wee hours of Friday morning to vote on an emergency budget aimed at fixing a $153 million spending gap wrought largely by Medicaid overruns and low revenue collection.

Before then, two major rifts developed between Democrats and Republicans on items proposed by Gov. Paul LePage involving a small amount of charter school funding and a proposal for an annual cap on General Assistance aid for municipalities.

Neither initiative represents appreciable savings related to the proposed budget, but both represent a battle of principles between the two parties.

Lawmakers were hopeful that both could be resolved as the Appropriations Committee endeavors to take a budget proposal unanimously out of committee. A unanimous vote would improve the chances of achieving a two-thirds majority in the Legislature -- needed to enact the emergency proposal and bypass LePage's veto pen, which the governor said he'd use if legislators cut charter schools.

In all, the LePage administration has proposed more than $153.2 million in adjustments to meet the budget gap for the 2013 fiscal year, which ends in June. Regardless of changes, the Legislature must hit that number to balance the budget.

Within that, nearly $118 million is slated for the Department of Health and Human Services, which overran projected costs for MaineCare, Maine's Medicaid program, by nearly $88 million, the bulk of the gap.

Of that, DHHS spokesman John Martins said $33 million in MaineCare overruns were the result of Republican-championed changes to MaineCare in the last Legislature that federal government rejected.

That total includes including nearly $15 million this fiscal year that would have been saved by booting childless adults and 19- and 20-year-olds out of MaineCare. 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 the federal DHHS data.

In dealing with the DHHS gaps, leaders in both parties have made arguments cutting halfway into problems: Republicans have cited the MaineCare gap as an embodiment of the need for structural reform, while Democrats have blamed it mostly on Republican initiatives.

"I think it's important to remember how we got here," House Speaker Rep. Mark Eves, D-North Berwick, said Wednesday. "It's because of the savings initiatives that weren't achieved over the last two years. We're here cleaning up the mess of the Republican-led budget and the proposals."

LePage proposed mostly one-time fixes to solve that budget hole, including a $40 million, one-time withdrawal of money from Maine's Budget Stabilization Fund, also referred to as a rainy day fund.

He's also proposed using $18.5 million from a two-week deferral of General Purpose Aid to Maine schools, $17.1 million from a capital fund and $14 million in casino revenue earmarked for education.

LePage also proposed capping General Assistance for municipalities at $10.1 million in this fiscal year, which doesn't have any savings figure attached to it.

If past numbers are any indication, however, Maine would hit that ceiling. Nicholas Adolphsen, director of legislative affairs for DHHS, has said in fiscal year 2012, the state spent $11.6 million on General Assistance. At a January hearing, a DHHS official said after paying billed claims, the state would have spent $6.1 million on the program this fiscal year with slightly less than a half-year to go.

The LePage administration also wants to continue that cap into the next two-year budget, projecting it would save $6.7 million over that period. That suggests it believes the cap would be easily exceeded. After that, the state would stop reimbursing municipalities, which would have to decide whether to fund the program.

(Continued on page 2)

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