Under review | Following the money trail in Augusta
Back to the drawing board
- LePage submits major budget changes
- Medicaid, collective bargaining targeted
Members of the Legislature’s appropriations committee had hoped to get the two-year budget done by mid-May — that won’t happen.
The latest computation of red ink totals $164.1 million. Finance Commissioner Sawin Millett told the panel the budget hole is caused by a combination of factors, including a downward re-projection of state revenues that accounts for nearly $35 million. There’s also been a recalculation of savings from the state retirement system, adding nearly $80 million to the shortfall.
And then there’s the Department of Health and Human Services, which owes the federal government $29.7 million as the result of a lawsuit the state lost over targeted case management payments. And there’s also increased demand for Medicaid services.
Millett said the administration proposes to fill the budget hole with a mix of new initiatives, as well as changes in the original $6.1 billion budget bill. The package includes several controversial proposals. One would eliminate health insurance coverage for 28,000 childless adults who qualify for Medicaid effective next January, a move that saves nearly $35 million. It also slightly reduces the total tax cut package from $203 million to $199 million, and would repeal collective bargaining rights for child care workers.
“One thing that I want to be right up front with you and tell you [is] that the piece that we did not endorse in this portion is the sales tax holiday piece,” Millett said. “We just couldn’t afford to do everything, but we stay generally consistent with the overall tax relief package.”
Rep. Pat Flood, R-Winthrop, co-chairman of the committee, said the changes are so significant that the committee scheduled a public hearing. ”It’s definitely a lot of moving parts, 121 pages, and that’s not typical, and a lot of policy parts,” Flood said.
The panel will be hard-pressed to complete their work by June; the Legislature is scheduled to adjourn June 15.
Millett told the panel that while the budget change package may appear to include a lot of new spending items, it fixes many problems in the original spending plan, which is why it appears to increase spending from levels set in the original budget proposal. “This is not a spending package, it’s a rebalancing package of proposals,” he said.
The proposed budget changes also would take nearly $29.7 million from the state’s rainy day fund, and book savings of $16.8 million in anticipation of more federal money, attributed to planned improvements in the DHHS computerized billing system.
Panel reacts to MTA findings
- Other agencies eyed for beefed up oversight
- Board member terms under review
In the wake of finding lax supervision of the Maine Turnpike Authority, members of the Legislature’s Government Oversight Committee want to institute more stringent spending controls at all independent state agencies.
“We are looking at the quasi-independent agencies like FAME (Finance Authority of Maine) and the housing authority,” said Sen. Roger Katz, R-Augusta, co-chairman of the committee. “There is no suggestion that anything improper is going on at these agencies, just that if we are going to have travel and gift ... policies at the turnpike, we should look at them for other agencies.”
While the MTA board adopted policies governing travel and gifts and brought in outside oversight for expenditures following an investigation by the Office of Fiscal and Program Accountability, those actions do not apply to the other independent agencies. “What we want to do is to make sure that quasi-governmental agencies are working under the same guidelines,” said Rep. David Burns, R-Whiting, committee co-chairman. “It may be that we need to put those in statute.”
Part of the committee’s review over the summer will be to assess what policies are in place, whether they are effective and what new policies are needed. “It’s clear to me that we have some problems in other agencies,” said Sen. David Trahan, R-Waldoboro. “We have seen instances of some questionable expenditures for meals and travel.”
Some committee members want to reduce turnpike board members’ terms from seven years to four or five, a typical length of board terms around the country. But Sen. Nancy Sullivan, D-Biddeford, argued against that. “We are going to look at all agencies over the summer and we should consider recommending a length of term for all and not just the turnpike,” she said.
Federal cuts to hurt state, local governments
- Mandates remain despite reductions
- First responders hit hard
As Congress moves to slash federal spending, state and local officials say some of those cuts amount to shifting costs from the federal budget to local taxpayers. They argue Congress should repeal mandates if the federal government is not going to pay at least part of the costs.
Among the more than $38 billion in cuts in the current federal budget year made last month were grant programs for law enforcement, fire departments and other first responder agencies. Congress did not ease any mandates in making those cuts.
“We have been appreciative of the fact in the past that we could use these Homeland Security funds for needed equipment and training,” said Penobscot County Sheriff Glenn Ross, president of the Maine Sheriffs Association. “These cuts are going to hurt. “
The Federal Communications Commission has mandated all public safety radio systems adopt new “narrow band” radios for communications by the end of 2012. The equipment is expensive, and while some agencies, like the Penobscot County Sheriff’s department, have already purchased the equipment, in part with federal grants, many agencies have not.
“We have not even started,” said Kennebec County Sheriff Randy Liberty. “I have 16 cruisers that will need those radios and they cost $3,000 each and I don’t know how we will find the money.” Like others, his office is almost entirely funded through the property tax.
“I don’t think most of the small towns have converted,” said Jim Ryan, director of the Penobscot Regional Dispatch Center, which handles all public safety dispatching in the county, except in Bangor. “A few have, but this is an expensive proposition for these small towns with one fire truck and all volunteers.”
Sen. Susan Collins said she tried to limit cuts in Homeland Security grants, which have paid for new equipment and training for first responders since the Sept. 11, 2001, terrorist attacks. “Unfortunately there is no line item for waste, fraud and abuse and duplication and overlap in the budget,” she said. “We have to make budget cuts to reduce federal spending as part of reducing the federal budget deficit.”
Sen. Olympia Snowe said Congress should consider repealing or delaying mandates such as the FCC narrow-banding requirement because of the reduction in federal assistance.
Mal Leary runs Capitol News Service in Augusta. He can be reached at editorial@mainebiz.biz. Read more of Mal’s columns here.
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