The Maine House and Senate have sent to Gov. Paul LePage for approval a $6.3 billion budget plan, and a measure to pay the state’s hospital debt.

Lawmakers sent a bill to renegotiating the state’s wholesale liquor contract to pay back about $184 million in Medicaid debt to hospitals. “As we make this final payment to make good on past debt to hospitals, we have also moved ahead with a bill that will reduce hospital debt and charity care in the future,” said Speaker of the House Mark Eves. “We must address both sides of this coin. To do one without the other, leaves the job half done.”

Accepting federal dollars would help contain future health care costs by reducing hospital charity care and bad debt, which totaled $450 million last year,according to the Maine Hospital Association.

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The Bangor City Council stands united against the recent budget compromise suggested by the Legislature as the measure will force property taxes to increase and positions to be cut, when all that needs to be done is to delay a tax cut for Maine’s wealthiest citizens for two years. These tax cuts passed in 2011 give those earning more than $350,000 per year a tax cut of almost $3,000, while middle income families will see a return of a little more than $100, according to the Maine Center for Economic Policy.

On June 10, 2013 the Bangor City Council unanimously approved a Resolve that opposes the recent budget passed by the Legislature’s Appropriations Committee, and calls on the Legislature to reconsider the compromise.

The proposed budget as it stands could create the largest property tax increase statewide in the state’s history. Cost shifting from Augusta to municipalities would raise property taxes in order to keep services and force cuts to services.

The Maine Municipal Association estimated a loss, just for the City of Bangor, of over $1.1 million because of cost shifting that is still in place, all be it at a lesser degree than the original LePage budget proposal.

“Everybody who is concerned about these issues needs to call their legislator to let them know that money for revenue sharing to towns needs to be fully restored,” said Councilman Joe Baldacci. “And the money is there.”

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Lawmakers are expected to take up a bond package this week while the issue of Governor Paul LePage releasing $105 million in voter approved bonds has yet to be settled. Thousands of construction jobs, research projects and infrastructure needs have not happened because LePage has not issued bond funding the people of Maine voted for.

The Appropriations Committee will hear testimony Wednesday on new bond proposals. Among the proposals are bonds to improve transportation needs for highways and bridges and to buy classroom equipment for Maine’s community colleges.

LePage has said he will issue some of the bonds only after lawmakers pay Maine hospitals a $484 million debt for unpaid Medicaid services. Many lawmakers, Republicans and Democrats, have stated that this ransom demand has cost the state of Maine valuable jobs and lost revenues.

BY JOE BALDACCI – this post appeared on Dirigo Blue June 8th

The Democratic Governors Association has been spending tens of thousands of dollars on ads opposing Lepage’s tax cuts for the wealthy and his policies hurting the middle class. After Friday’s action by the Legislature’s Appropriations Committee those ads should be pulled. How can Democratic leaders with a straight face criticize the Lepage tax cuts for the wealthy when a unanimous band of compromisers have taken them off the table – to add insult to injury they have hiked the sales tax which primarily hits the middle class. In hurting the middle class they are working to do Lepage one better.

I understand the fear about a government shutdown but apparently the Republicans have better spun that fear than have Democrats. The primarily black and blue mark that I have to deal with from this is a cut to Bangor in revenue sharing of $1.1 million. Bangor, like communities across this state, have cut and laid off people and raised local property taxes for several years this cut is only different in magnitude for what we have had to deal with in the past. I am not interested in laying off police officers, firefighters and teachers and I will resist that as much as possible. In fact, like other communities, we could use more police, fire and teachers to strengthen our public services as well as the public safety. But obviously Augusta is not much interested in that kind of talk about better public services.

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The Maine State Capitol, photo by Ramona du Houx

Early Friday morning, Lawmakers on the Legislature’s Appropriations committee, where the budget is worked on, agreed to a budget proposal that would mitigate the impact of Governor Paul LePage’s two-year budget. Instead of delaying the tax cuts for the upper 2 percent of Mainers that Gov. Paul LePage pushed through last year there will be an increase of the sales tax by half a penny, the state’s meals and lodging tax will go up by 1 percent and corporate loopholes will be eliminated.

“You cannot demand all or nothing if you want to get something done,” said Rep. Peggy Rotundo, the House chair of the committee. “This is a budget that restores massive cuts to our towns, schools, and to funds that help our elderly and disabled get the care they need.”

The tax cuts passed in 2011 provides those earning more than $350,000 per year a tax cut of almost $3,000, while middle income families will see a return of a little more than $100, according to the Maine Center for Economic Policy.

The bipartisan proposal restores some cuts to Maine’s public schools, and towns, and to programs that help Maine seniors and people with disabilities pay for their care and medicine. It also restores merit and longevity pay as well as retiree health insurance to state workers while strengthening fraud protections in General Assistance. The panel also reversed LePage’s proposed cuts to property tax programs and replaced them with a “property tax fairness” exemption that will kick in automatically when people file their state taxes.

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The Maine State Capitol, photo by Ramona du Houx

Last night at around 7:30pm, soon after The Appropriations Committee members returned to the table from a caucusing break, Senator Emily Cain announced that Democrats would no longer be asking for any delay of the LePage tax cuts.

“On behalf of our caucus, I want to take off the table the push or repeal of the 125th tax cuts,” said Cain. “Our hope is that that opens the door to a higher level and more intense level, more public conversation about the role of revenue that we see as essential to closing this budget at all, let alone in the next 48 hours.”

Cain’s hopes that the move would open a door to a public conversation on Republican revenue plans were quickly dashed. Republican Senator Patrick Flood offered nothing in return except this,“Opening with that was a good gesture and was the right time and the right thing to do. We very much appreciate it. I just wanted to say thanks,” said Flood.

But where does that leave the citizens of Maine who will have to pay for those tax breaks?

It was just a week ago when Democrats urged Republicans to delay tax breaks for the wealthy to help balance the budget and avoid property tax hikes. The unfunded tax breaks, passed two years ago, were championed by Governor Paul LePage and the Republican-controlled Legislature, and mostly benefit the top 2 percent of Mainers.

“In order to pay for a tax break that largely benefits the wealthy, Governor LePage’s budget increases property taxes on the middle class and working people, on seniors and small businesses, on homeowners and renters,” said Speaker Mark Eves, May 30th. “Putting these tax breaks for the wealthy on hold is the responsible option, we can’t just pass the buck.”

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Two proposals to change the budget, one restores $54 million to eduction, the other saves over $2 million.

Members of the Legislature’s Appropriations Committee put forward a plan to change Governor Paul LePage’s two-year budget by strengthening fraud measures, thus saving $2.8 million. Also introduced today was an amendment to the budget which would restore $51.4 million in cuts to education funding, and to layout an eight year track to achieve the 55 percent funding of education voted into law by Maine citizens.  

“The Democrats feel strongly about restoring cuts to school funding and demonstrating our commitment to meeting the fifty five percent mandate,” said Senator Emily Cain, a member of the committee who introduced the amendment. “This is the best way to support our communities and recognize that shifting retirement costs is a bitter pill. This proposal is about meeting our Republican colleagues halfway.”

The initiative accepts the Governor’s proposal to have districts assume the costs of teacher retirement and increase the state share of school funding by one percent per year beginning with FY 15 until the state’s contribution reaches 55 percent. If the state fails to meet this yearly increase, the full costs of teacher retirement revert to the state for that year.

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Close to 70,000 Mainers would be covered with the Affordable Care Act. If Maine doesn't accept the funding the state will loose millions

“The studies have been done, the reports are clear, Expanding health care for Maine people is the right thing to do for our budget and our people,” said Senate President Justin Alfond.

A new report from the non-partisan Rand Corporation said states that refuse the funds risked losing billions. The Rand Study analyzed the impact of 14 states not expanding, including Maine. It concluded that in terms of coverage, cost, and federal payments, states would do best to expand Medicaid. The study found in those states refusing federal dollars 3.6 million fewer people would be insured, federal transfer payments to those states could fall by $8.4 billion, and state spending on uncompensated care could increase by $1 billion in 2016, compared to what would be expected if all states participated in the expansion.

“This non-partisan study sounds the alarm” said Speaker of the House Mark Eves. “Significant dollars are stake and tens of thousands of lives are on the line. We can’t afford not to accept these funds.”

The federal government has offered Maine a bargain with the ACA. It has already pledged to pay 100 percent of the costs of health care for three years. Over time, that share will decline until it reaches 90 percent in 2020 and future years. In Maine, tens of thousands of adults without children would gain Medicaid coverage if the state opts to expand, according to the Legislature’s nonpartisan Office of Fiscal and Program Review. If the state chooses not to expand, about 25,000 childless adults and parents would lose their Medicaid coverage on Jan. 1, 2014.

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Sen. President Alfond speaking at the Capitol on accepting ACA funding and the Democratic healthcare plan.

A letter sent to the LePage administration dated May 24 from the Centers for Medicare & Medicaid Services again confirmed that Maine would receive full funding from the federal government for 55,000 childless adults for three years if it expands its Medicaid program to this population. Nearly 10,500 Mainers in this population will lose coverage in January if the state does not accept federal funds. photo by Morgan Rogers

“We don’t need to hard lines drawn in the sand. We simply shouldn’t wait to do what’s right for our state, both morally and fiscally. We can’t wait. People’s lives are on the line,” said Senate President Justin Alfond just before Governor Paul LePage vetoed the plan to renegotiate Maine’s liquor contract, and accept federal funds to provide health insurance for nearly 70,000 low-income Mainers.

All 15 Senate Republicans stood with LePage’s and sustained his veto of LD-1546, “An Act To Strengthen Maine’s Hospitals, Increase Access to Health Care and Provide for a New Spirits Contract”. To override a veto a 2/3rd’s majority vote in both chambers was needed.

“In a divided government, you cannot demand all or nothing,” said Speaker of the House Mark Eves. “Governor Paul LePage had an opportunity to prove to Maine people that he could compromise. He failed. He had an opportunity to put politics aside. He failed. Governor LePage has failed to pay his bills. He failed to provide health care to people whose lives are on the line.”

LD 1546, was previously passed by both the Senate and House, and makes the final payment of $485 million in state and federal dollars to Maine hospitals. Under the acceptance of federal health care dollars, the hospitals will also receive an additional $163 million a year in federal dollars for treating newly insured Maine residents.

With acceptance of the Affordable Care Act the federal government has agreed to pay 100 percent of the cost for covering all newly eligible people for the first three years, and then gradually lowering its payment to no less than 90 percent of the cost by 2020.

“We all know that Maine’s hospital debt is a symptom of our high healthcare costs. When people with out insurance get sick they end up in the emergency room where care is often the most costly. The cost of that care is often picked up by hospitals and passed on to anyone with private insurance. By accepting federal healthcare insurance dollars to cover more Maine families we reduce the charity care costs and bad debt that are cost drivers for our hospitals.  To do one with out the other would leave the job half done,” said Eves. “Also, by accepting these federal dollars the hospitals will also receive an additional $163,000,000 a year in federal dollars for treating newly insured Maine Veterans.”

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Sen. President Justin Alfond at a Capitol press conference. photo by Morgan Rogers

Democrats urged Republicans to delay tax breaks for the wealthy to help balance the budget and avoid property tax hikes. The unfunded tax breaks, passed two years ago, were championed by Governor Paul LePage and the Republican-controlled Legislature, and mostly benefit the top 2 percent of Mainers.

“In order to pay for a tax break that largely benefits the wealthy, Governor LePage’s budget increases property taxes on the middle class and working people, on seniors and small businesses, on homeowners and renters,” said Speaker Mark Eves. “Putting these tax breaks for the wealthy on hold is the responsible option, we can’t just pass the buck.”

More than 60 towns and school districts have signed resolutions against the LePage budget. The Maine Municipal Association says the LePage budget is a $424 million shift to municipalities and property taxpayers.

Portland’s school district, yesterday, announced it had to cut almost 49 positions because of cost shifting cut backs.“This is regrettable news for our community but, sadly, not unexpected. The Governor’s budget proposes drastic cuts to education,” said Senate President Justin Alfond. “For too long we have asked our schools and teachers to do more with less. This is counterproductive to our collective goal of making our classrooms the best learning environment for our students.”

LePage’s budget cuts $50 million from public schools across Maine, including an additional $28 million shift forcing school districts to pay for the state’s share of teacher retirement costs.

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