LEWISTON — Facing a double-whammy budget shortfall, state lawmakers from across Western Maine are starting to formulate their game plans as they prep for what could be a combative session of the Legislature.
The session, which begins officially on Dec. 5, will get fully under way in the new year.
"The big, glaring thing is, of course, the budget," said Sen. Margaret Craven, D-Lewiston.
Required by the Maine Constitution to produce a balanced budget, lawmakers are facing a combined shortfall that is approaching $140 million. The first chunk of that — $35 million — must be solved by June 30, 2013.
Key to those deliberations will be Rep. Peggy Rotundo, D-Lewiston.
Although the selection of committee chairs had not been decided, Rotundo is likely to be the House chairwoman of the budget-writing Appropriations Committee, now that Democrats have regained majority status. She served as the lead Democrat on the committee the past two years.
"As an Appropriations Committee person, my focus is always on the budget," Rotundo said. She said lagging sales-tax projections indicate a shortfall in the budget, but to her, they also indicate that Mainers are still reeling financially.
"It's clear to me that families in Maine are still struggling, are still suffering from the effects of the downturn in the economy," she said, "so my real focus has to do with putting money in the pockets of those struggling families in Maine."
The first step to making that happen is to "first make sure things don't get any worse for them," Rotundo said.
She said she anticipates Gov. Paul LePage will propose making some "drastic cuts" in his budget for the next two years.
"I feel very strongly, in order to protect working families in Maine, we have to keep the safety net from unraveling any further than it already has," Rotundo said. "We also have to be very careful that we don't simply shift costs from the state to local communities and to local property taxpayers, as we have done in the last two years."
Craven and other lawmakers from the region said the state must move to pay down its debt to Maine hospitals. It's an issue that LePage also has said must be addressed.
The total debt from unpaid Medicare expenses is approaching $450 million, Craven said. By starting to pay it down, local hospitals, some of the region's largest employers, would be on more solid financial ground, Craven said.
"We all have an interest in paying the hospitals," Craven said. If that doesn't help create jobs, it would at least preserve some of them, she said. "We are all talking about creating jobs, but we can't even save the jobs that are here."
Business tax breaks
Rotundo, Craven, Sen. John Patrick, D-Rumford, and Rep. Mike Beaulieu, R-Auburn, all seemed to agree that the state may be able to save or find some money by taking a hard look at tax breaks and other incentives that were put in place years ago to create jobs and bolster economic development.
Patrick said more than $1 billion in annual business tax breaks were put in place over the years to create jobs. He said it makes sense to him and to many on both sides of the aisle to see which of those are actually doing what they were intended to do and which amount to corporate welfare.
"What's in it for working men and women?" Patrick asked. "Should it all go directly to business or should it go to businesses with caveats for livable wages and health-care benefits?" Patrick said there's only so much cutting that can take place in a state budget before you have to look for new revenue.
"This is one where we can't just keep making cuts," he said. "We can't cut our way out. We have to take a look at everything and everything has got to be on the table."
Beaulieu said he expected there would be considerable time and debate spent trying to modify a bill passed last year that changed the laws that regulate health insurance in Maine.
The controversial PL 90, which created a high-risk insurance pool and established a new, $4 fee for anyone buying private health insurance to pay for it, was one of the things he heard the most about when campaigning for re-election.
The Republican-backed measure was meant to lower insurance premiums, but older individuals in rural parts of the state continue to see their premiums skyrocket.
A report from the nonprofit Consumers for Affordable Health Care released in September showed 54 percent of individual policyholders in Maine saw premium increases, while 90 percent of small business policyholders saw rates go up.
Republicans who backed the measure have said there are parts of the law that haven't been fully implemented and it hasn't been given time to work.
Beaulieu said he didn't plan to author legislation on the measure, but it was on the radar screen and he was amenable to looking at it.
Rep. Jarrod Crockett, R-Bethel, said it was likely the law would be targeted for changes, but he didn't believe there would be any attempt to repeal it.
State liquor contract
Crockett said news in August that the state could benefit to the tune of $41 million a year by renegotiating a contract with private business for the importation and distribution of hard liquor in Maine — once a state-run monopoly — would also be a top issue.
Crockett said there was little doubt the state would renegotiate terms that were more beneficial to the state, but that lawmakers would likely have varying ideas over how to spend that money.
He said both paying down the hospital debt and the state fully funding its responsibilities to public schools could emerge as possible uses for the money.
"How that all gets sliced up will certainly be one of the topics of debate," Crockett said.
He said he has a bill he wants to see advance this session that would create a "cooling-off" period that would prohibit outgoing state lawmakers from becoming lobbyists for one year.
Maine's Legislature is regularly ranked among the worst in the country when it comes to ethics, and his bill would be aimed at changing that, he said. He noted it was meant to prevent corruption in government and the "revolving-door" effect of lawmakers joining the ranks of lobbyists the day after they leave office.
"Some people are going to have opposition to it, I'm sure, but I just don't see how we can continue this," Crockett said. Federal law requires a similar cooling-off period for members of the U.S. House and Senate, he said.
State Rep. Terry Hayes, D-Buckfield, who is serving in her fourth and final term in the House, said she hopes to use her last two years to push her colleagues to use data generated by the Maine Development Foundation as they craft bills.
Hayes said the state helps pay for collecting the data, which look at economic factors county by county, but the data seldom are used in making policy decisions.
"I'm just dismayed at how little that data source is used by me and my colleagues in our policy deliberations and decision," Hayes said. "So in a broad base, sort of at a 30,000-foot level I have a personal goal of finding ways to encourage my colleagues to use that data."
Annual reports from the foundation detail 25 benchmarks and whether the state is moving forward in those areas, moving backward or staying even.
"Collectively, they are used to gauge the quality of life in Maine, in our economy," Hayes said. "For two election cycles we've heard everybody pontificating about how important jobs are, so when we step back and look at which of those needles did we move and how, I'm disappointed because I think we end up ignoring some of the best data to help focus our policy decisions so that we can generate the outcomes we say we want."
Hayes also said she would like to revisit legislation proposed by former state Rep. Henry Joy, who was trying to shift the state's budget deliberations to the second half of the two-year terms Maine lawmakers serve. Doing this would allow new lawmakers a year to get up to speed on the legislative process, Hayes said.
Because of term limits, retirements and the ebb and flow of elections every two years, Maine has a bumper crop of new lawmakers, and that freshmen group — this year it's 60 new members in the House — has to grapple with the state budget.
"So, you've got more than a third of your legislative oversight staff that have no idea what a state budget looks like," Hayes said. After a year of experience, lawmakers have a better ability to scrutinize the budget proposals coming out of the governor's office, she said.
The second year of the legislative session also has more time for them to closely scrutinize those proposals and offer alternatives, because the number of other bills is limited in the second year of the legislative cycle, she said.
"So, you have better-informed legislative members, who have the time to pay attention to those details, and they have a sense of what those details are," Hayes said. "It's a structural change that can help change the outcomes."