March/April 2008

By Ramona du Houx

The new proposed federal changes in Medicaid rules will cost Maine $33 million while community nonprofit healthcare providers and schools will loose $141 million in federal aid.

“If these changes are allowed, families and elders will be put at risk; more people will end up in shelters, on the streets, in hospitals, or in jail. This is a shortsighted strategy that will increase costs in the long run. These programs are effective and compassionate and lead to better overall outcomes. Every community in Maine will be hurt by these changes,” said Governor John Baldacci.

House Majority Leader Hannah Pingree said, “Everyone will be hurt in one way or another. Our property taxes will go up to support services that the federal government says we now need to provide on our own. And the cuts will deliver a crushing blow to the health services economy. We’re not talking about big insurance companies or massive hospitals — they are small businesses who provide crucial services but don’t make big profits. And they’re in danger of being shut down completely.”

The proposed Medicaid rule changes did not go through lawmaking channels. Congress never had a chance to look at the plan. They were “rule changes,” not proposed legislation.

“We have been working with the state’s congressional delegation, the National Governors Association and Rep. Henry Waxman, who is planning hearings on the changes, to oppose the proposed new rules,” said the governor. “Unless Congress intervenes, these new rules will impact vulnerable children and adults across the country.”

Legislative Democrats voiced their opposition to the federal actions and unveiled their support of a joint resolution condemning the federal cuts. “We want our congressional delegation to know that they have our complete support in fighting these cuts,” said Pingree.

Some of the rule changes have started as of March 1, 2008. Since then Maine joined three other states in a suit against the federal government over the new Medicaid rules.

Maine Attorney General Steven Rowe said, “The rule is not only unfair to states and Medicaid beneficiaries, it is also illegal. We are confident that the federal court will find that the secretary of Health and Human Services exceeded the authority given to him by Congress.”

Along with these proposed cuts, states are facing the last Bush administration budget. In February the Maine Center for Economic Policy (MCEP) released details of how the proposed federal budget would impact Maine.

The chairman of the Budget Committee, John Spratt had this to say, “The budget before us seems to bear all the hallmarks of previous budgets, like more deficits, more debt, offset by draconian cuts in Medicare and Medicaid, and smaller but significant cuts in such things as the Social Services Grant and the Community Services Block Grant.”

Thousands of Mainers would feel the impact of cuts in education, environmental protection, child care and a host of other services under the president’s 2009 budget, according to the MCEP. Maine would lose an estimated $81 million in federal support for a broad range of critical programs, even as large tax cuts for wealthy households would be extended.

“The president’s latest budget has been accurately described as a disaster for the states. It takes money from low-income heating assistance and state-level drug enforcement and further undermines every state’s financial ability in a time of economic trouble,” said Governor Baldacci.

The president’s budget, along with the Medicaid rules would shift millions of dollars in costs to Maine at a time when Maine is already projecting almost $200 million in deficits. That would force Maine to weaken public services even more than will already be needed to balance its budget.

The cuts in the president’s budget would affect services that have already absorbed sizable cuts in recent years.

According to the MCEP report the budget as it stands would have the following effects:

¨ Under the president’s budget, Maine would receive $15.9 million less in 2009 than it received in 2004 for K-12 education and still have to implement No Child Left Behind. Funding for Maine’s vocational and adult education programs would also be cut by $6.3 million compared to last year.

¨ Cut Maine’s childcare funding by $100,000, marking the eighth straight year of frozen or reduced funding. Maine’s funding has fallen by $1.3 million over those eight years.

Head Start programs in Maine would get $3.7 million less in 2009 than they did in 2002. “Quality child care and early education provide children with the foundation they need for future success. We need to make sure that more — not fewer — children have access to these programs,” said Elinor Goldberg of Maine Children’s Alliance.

¨ Cut Maine’s low-income energy assistance funding by $9.5 million. This cut is equivalent to the cost of providing assistance to 11,500 Maine households. The Low Income Home Energy Assistance Program (LIHEAP) helps vulnerable households to pay their home-heating and air-conditioning bills.

“LIHEAP and the Weatherization Assistance Programs provide critical assistance to many low-income Mainers struggling to deal with freezing temperatures and rising fuel costs. I will strongly oppose these cuts and support significant funding increases so that no Mainer is left in the cold,” stated U.S. Rep. Mike Michaud.

¨ Cut Maine’s community development funding by $3.8 million. The Community Development Block Grant (CDBG) helps fund a broad range of community development activities in Maine and other states, including housing and homelessness programs, improvements to public facilities such as senior and youth centers, and economic development. Maine would receive $13 million less for this program in 2009 than it did in 2001.

¨ Cut Maine’s funding for repairing, modernizing, and replacing public housing units by $1.2 million.

¨ Cut Maine’s education and training programs for adults, dislocated workers, and youth by a total of $1.4 million. Maine has lost $4.6 million in funding for these programs since 2001.

“The president’s budget also essentially eliminates the Manufacturing Extension Partnership (MEP), cutting funding by $87 million below the level needed to maintain current services and providing only $4 million for 2009. MEP provides resources and services to U.S. manufacturers to help create jobs, leverage private-sector investment, and be more competitive,” said Rep. Michaud. “As our economy slows, we should not be cutting funding to programs that create jobs. In fact, we need to be doing everything we can to create and sustain jobs..”

These are just some of the major cuts proposed. State governments cannot pay for all the needs of their citizens; they are not meant to. The basic needs of communities continue to grow under the Bush administration, as citizens suffer needlessly and highways crumble with lack of federal funding.

“The president’s budget would make it even harder for Maine families to afford quality health care, send their kids to college, buy fuel to get to work, and heat their homes, and keep pace with prices that are rising faster than their paychecks. I will fight the budget,” said U.S. Rep. Tom Allen.