Cutting back
State faces $100M hole
- Medicaid funding falls through
- Education, human services cuts expected
The state’s first order of business as the new budget year begins this month is to start cutting $100 million in spending because Congress has failed to extend extra Medicaid funding to the states.
Ellen Schneiter, acting finance commissioner, said her first day on the job was spent finalizing budget cut targets for state agencies and outside agencies that receive state funding, like the University of Maine System. “They are proportional and will affect all of state government,” she said of the planned cuts. “Nobody is spared.”
The anticipated $100 million budget hole has led Gov. John Baldacci to freeze state hiring and curtail expenses. His order came on the heels of a U.S. Senate vote in late June that nixed $85 million in expected Medicaid contributions to Maine, money already allocated in the state’s budget.
Baldacci said he will call the Legislature back in a special session this fall as a last option if state revenues fail to meet estimates over the next few months and Congress does not extend aid. “I will do what I have to do,” he said.
“There are a lot of moving parts here,” said Sen. Bill Diamond, D-Windham, co-chair of the appropriations committee. “A hundred million dollars is serious money, but we don’t know if we might get part of that money, or all of it or all of it over a longer period of time.”
Rep. Emily Cain, D-Orono, the House co-chair of the committee, described the curtailment process as a “blunt instrument.” “The biggest impact of a curtailment will be on education and human services and it will be terrible,” she said.
State revenues were up in the last few months of the budget year and Schneiter said the surplus should total more than $50 million, with June revenues expected to come in about on target. Mike Allen of Maine Revenue Services, meanwhile, said some of the revenue booked in May should have been booked in June, so it will not produce a significant revenue surplus, if at all.
Appropriations committee members questioned Allen on his revenue projections for the next six months. “It was obviously a very severe recession and the recovery probably is not going to be a very smooth one,” he told the panel.
Rep. Sawin Millett, R-Waterford, the lead GOP member on the panel and a former finance commissioner, said the curtailment process is a stopgap measure. “Whatever Gov. Baldacci comes up with for a package will eventually have to be blessed by the Legislature because of the limits on what can be done by curtailment,” he said.
New laws take effect
- Workers’ comp bill incites worry
- Insurance mandates bemoaned
Hundreds of new laws are now in effect and business community lobbyists agree that one new piece of legislation is downright bad for business.
A slate of laws enacted by the Legislature during this year’s January to April session takes effect today, 90 days after adjournment. Many agree that the worst bill of the session for businesses is one that gives the Workers’ Compensation Board the authority to shut down a construction workplace if the board believes the contractor is improperly using independent contractors to avoid paying for workers’ comp insurance.
The legislation was drafted in reaction to studies that show workers are commonly treated as independent contractors when they should be paid as employees. Contractors who avoid hiring workers as employees reduce their costs by evading workers’ compensation and unemployment insurance and do not withhold income taxes.
“This has been a growing issue,” said David Clough, Maine director of the National Federation of Independent Business. “But this legislation gives power to a state agency that other agencies do not have.”
The law does provide for an appeal of the board’s action to the courts, but only after an order has been made to halt work at a site. There is broad concern that the new authority will be used with a heavy hand.
“There is a lot of mistrust of the board and its staff,” said Peter Gore, vice president of the Maine State Chamber of Commerce. But, he added, “What was passed is bad, but what was proposed was far worse. At one point, it would have covered any employer in the state.”
Probably more important for businesses were the bad bills that did not become law in the second session, Clough said. “The paid sick leave bill would have been very bad for the business community, but it did not pass,” he said. “Some of the increased insurance mandates will cost the business community and that is a concern in this recession.”
Gore said the additional insurance mandates will cost employers at a time when they cannot afford additional expenses. “Employers were hit with an increase in the taxes for unemployment and then they added the provision on vacation time and that will cost the system another $2 million,” he said.
Among the laws considered an improvement is one that increases the maximum fine for writing a bad check to $150. “This is a small step in trying to reduce the number of bad checks, which continues to be a major problem for retailers,” said Jim McGregor of the Maine Merchants Association.
Gore highlighted a pair of bills from the Legislature’s utilities committee that he said will improve the development of energy corridors and ocean energy projects. “It broadens the ability of the state to improve the number of renewable energy resources it can develop in the future,” he said.
Study: Teens face harassment at work
- More serious offenses uncommon
- Data to shape training for employers
A study of Maine teens who worked part time while in high school indicates one in four experienced sexual harassment at work.
The study, which involved 515 teens aged 13 to 18 who worked part time while attending school in Maine during 2008 and 2009, found that 28% of girls and 23% of boys experienced some level of sexual harassment. The study looked at 20 types of unwanted and uninvited behaviors ranging from verbal sexual harassment and sexist comments to groping and sexual assault.
“What was good to find out is that none were the most serious, the rape or attempted rape categories,” said University of Southern Maine professor Susan Fineran, principal author of the study. “But it does show that workplace sexual harassment poses a significant problem for teenagers.”
National studies have found that as much as 60% of adult women experience sexual harassment in the workplace, and up to 15% of adult men, Fineran said. This study of teens may be the only one of its kind, she said. Harassers of girls in the study were generally older than those of the boys — about 10% of the boys and a third of the girls described their harassers as 30 years of age or older.
Fineran partnered with the Maine Department of Labor to draw the sample from the agency’s work permits database. While the DOL is concerned about the numbers, none of the offenses were of the most serious in nature, said Labor Commissioner Laura Fortman. “Let’s not forget that for 75% of them there were no problems to report,” she said. “For most of them, it was a positive experience in the workplace.”
But, Fortman said, she is concerned about the occurrences of sexual harassment and stressed that such behavior is illegal and could lead to legal action against both harassers and employers. The study will be used to shape DOL training programs for employers and advice to schools about working teens.
The study has reinforced Fortman’s opinion that some occupations pose more of a risk to teens than others and that parents should know about the risks before agreeing to allow their teen to work. “Every year we have requests to remove the prohibition on minors working in motels and hotels, working in the rooms,” she said. “We should make sure that we limit the exposure of minors to adults where these situations could occur.”
Mal Leary runs Capitol News Service in Augusta. He can be reached at editorial@mainebiz.biz.
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