Governor's budget proposal freezes revenue sharing with towns and cities

AP Photo/Robert F. Bukaty

H. Sawin Millett Jr., commissioner of the Department of Administrative and Financial Services, left, speaks to the Appropriations Committee about details of Gov. Paul LePage's $35.5 million curtailment offer at the State House in Augusta on Friday.

AUGUSTA — The administration of Gov. Paul LePage on Friday unveiled a proposed $6.3 billion budget that eliminates more than 200 state positions and drastically reduces the amount of tax revenue the state shares with local towns and cities.

AP Photo/Robert F. Bukaty

State Sen. Justin Alfond, D-Portland, questions spending cuts outlined by the Appropriations Committee at the State House in Augusta on Friday.

The budget includes tweaks to the state's tax code that would increase some revenue from those receiving certain levels of investment income. The proposal also removes a sales tax exemption for newspapers and magazines.

Over the next two years, beginning in July 2013, municipalities face a loss of more than $400 million statewide.

Under the proposal, revenue-sharing would return in the following budget cycle in 2014 and 2015, but LePage's top commissioners said there was no way to close a growing budget gap without a drastic proposal.

The state budget is being ravaged in large part, according to officials in the administration, by increased costs and decreased federal funding of the state's Medicaid program.

Department of Health and Human Services Commissioner Mary Mayhew said the elimination of federal stimulus funding that had previously been used to help cover the state's share of its Medicaid costs was a primary culprit.

"Maine's challenges are intensified and exacerbated by the generosity of its Medicaid and public assistance programs," Mayhew said. "And as we stand on the edge of a fiscal cliff in a national climate fraught with financial uncertainty, we are hamstrung by the federal government's refusal to allow our state more flexibility to implement reductions that were signed into law and to provide the state the means to balance its budget and manage more effectively its programs."

The increases in state spending on Medicaid were far smaller than the reduction in federal support, but combined, the two items created a gaping shortfall for the state.

"The cost-shifting to the state is staggering," Mayhew said, noting that state spending on Medicaid grew by only $16 million over the last fiscal year, but the reduction in federal support meant a 48 percent increase in the level of state funds needed to sustain the program.

"We must be realistic in our approach and admit that Maine cannot afford its programs as they exist today," Mayhew said.

Changes in program eligibility, care management and payment rates are proposed in the budget offered Friday, Mayhew said. She emphasized that the new budget would provide funding to move off the waiting list for services about 1,100 people with severe intellectual and developmental disabilities.

Mayhew reiterated a LePage stance that the state's financial and medical welfare programs need to be preserved for the most vulnerable citizens and the current system was fraught with inequities.

The budget proposal also eliminates the state's Drugs for the Elderly program, which covers co-payments for prescription drugs under Medicare Part D premiums, out-of-pocket costs — often referred to as the "doughnut hole" — and the expense of excluded drugs. The elimination of the program would save the state about $1.75 million a year.

Education impacts

The proposed budget also affects public schools, which would be asked to shoulder 50 percent of the cost of teachers' pensions previously paid by the state. That change would save state government about $14 million a year.

Education Commissioner Stephen Bowen said the good news for schools is that the amount of state funding in what is known as General Purpose Aid to Education would stay the same, about $895 million per year.  

Bowen outlined several education spending increases, including targeted support for school infrastructure improvements, funding for implementing school accountability, best practices and educational options.

An additional $13.1 million would go to schools in 2014 and $13.8 million in 2015. The funds are meant to help schools implement teacher and principal evaluation systems, develop proficiency-based high school diploma programs and create accountability programs for under-achieving schools.

"Tough choices that you've already heard something about so far this afternoon mean that we are able to minimize to the highest degree that we can the impact to our schools with these budgets," Bowen said.

Republicans leaders offered measured responses to LePage's proposal.

“It is very encouraging to see a continued commitment to education funding in the budget and no increase in income taxes," Sen. Michael Thibodeau, R-Waldo, said. "But there are some difficult reductions in this budget, as well. I, like everyone else, have concerns about the burden this budget will place on municipalities, but at the same time, recognize the challenge of maintaining essential state services with the revenue we have."

Thibodeau, the Senate minority leader, said the proposal would be fully vetted and that other budget ideas would be put forward.

Leaders in the new Democratic majority were quick to criticize the proposal, noting the cuts in revenue-sharing and the shift of retirement funding for schools was little more than a giant cost shift to local communities.

And, the elimination of programs would leave some of the state's most vulnerable citizens, including the elderly, with having to choose from among food, heat and medicine.

"This will be devastating to the city of Lewiston and its residents," said Rep. Peggy Rotundo, D-Lewiston, House chairwoman of the Appropriations Committee.

Senate President Justin Alfond, D-Portland, said the budget, if approved as presented, would result in steep property tax increases for all Maine families.

Republicans and Democrats in the Legislature will likely have their own budget proposals. Rotundo said those ideas, as well as the governor's, would be fully vetted in the weeks ahead.

The meeting between LePage Cabinet members and legislative leaders and the Appropriations Committee was originally scheduled to be held in private, but the meeting was made open to the public and the media after a protest under the state's Freedom of Access Act was lodged by the Sun Journal.

The governor's staff had planned to brief the press on the budget proposal at 3 p.m. LePage was not in attendance at the meeting Friday and legislative leaders said he was the only governor of the past three who didn't attend the presentation of his own budget.

sthistle@sunjournal.com

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Comments

Steve  Dosh's picture

Governor's budget proposal freezes revenue sharing with towns

all mainers 13.01.12 3 pm hst ?
Why not just bite the hand that feeds you next time , Hon. Governor ?
i apologize for the sarcasm and - e x t r e m e - cynicism Mainers
He's already covered under his state government health plan ( Dirigo ® ?) that you fund , his salary and benefits are > than what you or i will every earn , and he's simply the tallest hog at the trough ?
Q: But we see though him like glass of water now don't we ? A: Oui • http://occupybangor.org/ /s Steve

 's picture

Oh my God, in Auburn we won't

Oh my God, in Auburn we won't be able to provide kindergarteners with IPads. We won't be able to expand the give-away to other grades either. The injustice. The cruelty. (sarcasm) Then again, I am sure we will find the money. Homeowners must have a few shillings hid away. We will find them. We will squeeze it out of them.

PAUL ST JEAN's picture

To the ears of the myopic

To the ears of the myopic liberals (there's plenty of money as long as it's someone else's) you speak blasphemy, my friend.

PAUL ST JEAN's picture

"Senate President, Justin

"Senate President, Justin Alfond, D-Portland, said the budget, if approved as presented,would result in steep property tax increases for all Maine families."
And, Rep. Peggy Rotundo, D-Lewiston, said, "This would be devastating to the city of Lewiston and its residents."

What, exactly, did these people think would happen after 30 years of democrat controlled unbridled, unfunded spending? Time to pay the fiddler.

CLAIRE GAMACHE's picture

The Fiddler

This is the same kind of austerity program that Republicans sold to the folks in California that had their government on the edge of default and bankruptcy for years. Moreover, it devastated their schools and their health care system and eventually their quality of life to the point where people were moving out in droves. Finally they had enough and put adults in charge and within two years are paying their bills and in the black. Whoever said we cannot tax and borrow our way out of this is wrong. We will continue to spiral downward economically while being told that pain is good for us until people get fed up with that nonsense and then we will tax and borrow our way out of it. Only then, we will have to tax and borrow a lot more to make up for the damage to our infrastructure, our schools, our government, medical care and business communities.. And as for the pain, well it's always fine as long as it's somebody else's pain. Even the fiddler needs a fiddle to make music. Telling him he can do without isn't going to get you a song.

Steve  Dosh's picture

. . Claire, right ? . . and

. . Claire, right ? . . and Paul ? Saturday
The fiddler is your somewhat Hon. Gov . fiddling around in Disgusta [ sic. ] whilst you burn fossil fuels totry and keep your selves warm ( perhaps not this weekend )
You do not seem to to realize he is about as smart as a box of hammers ( think : Patrick on Sponge Bob ® ) , he's cheap ( ie.e, can be bought and sold ) and ppl simpy take full advantage of him
Sooner of later we'll be sold off to the hoghest bidder and there W I L L be a funding scandal involving him
Mark my words ? I'm thinking telecommunications ( Failpoint • ) or energy ( Wind Energy ? ) will bring it on [ not the Sierra Culb ® - his political supporter ] :)
Your Attorney General ( and other union state employess ) will not suport him be cause they certainly do not get along or respect each other
This will play out as shades of ' i am not a crook ' Nixon firing AG Dean during the Watergate scandal yet it will be more like V P Agnew who was fired by Nixon for embezzlement ( stealing )
We have all seen this happen B4 . Absolute power corrupts , absolutely , every time
A power hungry - meglomainiac ( no pun in tended ) , petty tyrant , paranoid ( esp. against this free press the LSJ ®  ) , seemingly unlimited resources = recipe for d i s a s t e r . Like Bush , it's a train wreck that has started already . Just wait and see •  Watch it happen b4 your eyes
Go Patriots :) /s Steve

PAUL ST JEAN's picture

Excellently stated, Steve.

Excellently stated, Steve. You've altered my thinking on every point. Any doubts I ever had have been eliminated. Now, let's all have our cookies and warm milk and take our naps like good little sheeples.

Steve  Dosh's picture

. .e.g., telecommunications

. .e.g., telecommunications -- > http://www.sunjournal.com/news/business/2013/01/11/oxford-network-lays-1... < -- casinos , what evah :)

CLAIRE GAMACHE's picture

The bully pulpit

I have never heard this governor say one nice thing about the State of Maine. Now I think I know why. Looking at his budget, which pretty much will result in turning off the heat and electricity in our public schools, and seniors panhandling to get money for their meds, I can see we are just not hillbilly enough for him. Somewhere in this country is a state with more poverty and ignorance than ours and we have to compete, in his view. Since his administration has produced nothing but an economic downward spiral in our state, the signs, certificates, and tax cuts notwithstanding, he has to find someone to blame. Where else would a guy with a history of stealing candy from children go but to the elderly, kids and sick people. Revenue sharing came into being because the service centers in our state were tired of carrying the cost of serving the surrounding communities and were proposing to tax those services. I suggest that we go back to Plan A. If the state cannot afford to fund the public schools, where most of our kids go to get an education, then we should suspend the entire charter school program which only educates a small elite group and funding two systems obviously costs more than funding one. Instead of throwing people off healthcare which will only result in those of us who have health insurance being unable to afford the increased rates in the future, he should look into cost savings like the health exchanges proposed by the federal government. And he should sign the bonds to get the economy growing and stop driving businesses out of the state instead of getting them in.

Steve  Dosh's picture

Claire 15:30 hst , sunny

Claire 15:30 hst , sunny Saturday 80º ?
. . Good point Claire •  " . .we are just not hillbilly enough for him. "
After all is said is done , Appalacia - d o e s - stretch from Springer Mt. GA to Mt. Katahdin ME and goes right through the Governors office
This is not to say that some slednecks aren't good and great , helpful and reverent inidivuduals . You are , female and male alike . We respect , follow and admire your recovery efforts @ Bigelow and Rangely Mts. lakes and streams and such
It's your Governenor who needs a good swift . .. - l e s s o n - in falling off his high horse , t y v m
Just one man's opinion , /s , Steve
b t w - We're at the bottom of the barrell in The US Senate , HI & ME
We both have freshmen Senators ( except Susan Collins ! )

PAUL ST JEAN's picture

"Looking at this budget,

"Looking at this budget, which pretty much will result in turning off the heat and electricity in our public schools..."
Absolute nonsense. Name two schools in the entire state that couldn't survive without their hockey, football, baseball, or basketball programs. Cruel and heartless? Are they more important than heat and lights? Drastic times call for drastic
measures.
With as many people on Food Stamps, TANF, SNAP, or whatever else you wish to call it, why are so many public school kids being provided with free meals, as often as twice a day? The free meals program should be cut in half and be made available to only the NEEDIEST of the "needy".
The school budgets are the most bloated of any of the budgets of just about every town of city in the state. Again, time to pay the fiddler.

FRANK EARLEY's picture

I agree, we must just cut everything...

Why are we even in the business of teaching kids anyway? They don't even appreciate getting a good education. All they want to do is sit at home and play video games all day. Something they obviously learned from playing Football, baseball, hockey, swimming cheering, field hockey,track and field (hell, track has two seasons, cheering goes on all year long). In my opinion nothing good comes from any kind of team activity,especially with young people. A gym, I would imagine, is the devil's playground. what possible good could come from instilling good sportsmanship, team work, organizational skills, all that physical fitness stuff. I honestly don't feel my tax dollars should be going to teach self respect, responsibility, and the worst part of all, giving high school kids something constructive and educational to do after school. They should be down hanging out behind the bowling alley like I did.
Why are we giving away perfectly good food to elementary school students? Two free meals per day? I don't care that children for whatever reason, might not be getting the proper food at home. Is it my fault they can't keep their heads up all day due to lack of energy? Also what exactly are we teaching these layabouts? All you need to do is show up, and we're going to do all we can to help you learn. After all, they still have their welfare, and the ones who somehow don't qualify, they can just learn from those that do. We wouldn't want to deflect students from thinking that welfare is the only way of life. Hell, next thing you know, kids might strive for something better. Could you imagine a whole generation of children striving for something better? I shudder just thinking about it.
I say, it's time to stop these travesties. We can't continue to waste money on all these frivolous activities and use our tax dollars for what they were meant for, keeping the heat and electricity on in our schools. There I feel better already.......

PAUL ST JEAN's picture

What's YOUR solution other

What's YOUR solution other than blaming Bush, LePage, and the rich? Maine is broke, the feds are broke. Where would YOU make the cuts? You libs play a great game of piss and whine, but your delivery of REALISTIC means of balancing the budget are severely lacking.

FRANK EARLEY's picture

Sometimes you have to try anything....

Yes, the state is broke, at least as opposed to being filthy rich. Several times in my lifetime, so far, I've been broke too.
When a person finds himself, some what low, on the disposable cash scale, it's very similar to a state in the same boat. I have noticed that you seem fixated on the use of the word "Cut", you seem to think that the solution to all financial woes is to cut spending, cut benefits shut everything down. Evidently by stopping all spending such as with bond packages as the Governor seems to think is a great idea, will eventually solve all the money problems in the world. It's almost like the proverbial "Flamingo", if he just puts his head in the sand, all the world will cure itself. To me, that is the approach the Republicans seem to enjoy. They love to draw a line in the sand and spend all their time just daring someone to cross it. Their approach to solving the "Fiscal Cliff" problem damn near put this country in a tail spin, only because no one is going to cross that line any more. I love how the news outlets built up the drama in that, they made it seem that if something wasn't done by midnight, everything would be one big episode of "World Without People". If all that drama pointed out anything, it's that one party alone, shouldn't try to take this country hostage. When I was broke, or at least very low on funds, I had a choice to make, I could just sit here and feel broke, or I could be "ProActive". That means investing in my own future, I had to take a few chances, a risk or two, but to me just sitting there waiting for someone to cross that line in the sand, wasn't an option. The Governor finds himself in a similar situation, he needs to be ProActive. He needs to allow the sale of bond packages, allowing an infusion of money in the future. Yes in the short term the debt is increased, but in the long term if the correct decisions are made that debt could be transformed into a credit.
The governor needs to stop punishing the people of Maine, because he is unwilling or unable to properly invest in the future, to take a few chances. I've said this many times," you get nothing for nothing ". No one is going to come along with a golden goose, much the same as the Governor punishing the people by cutting services and school funding, wont solve the problem either.
He needs to start showing some leadership and problem solving skills. Stop hurting the people because of his own shortcomings. Everyone needs to start thinking outside the box, and stop using the same old policies that never worked in the first place...........

PAUL ST JEAN's picture

"I have noticed that you seem

"I have noticed that you seem fixated on the use of the word, "Cut", you seem to think that the solution to all financial woes is to cut spending".....
If your government is spending $11 for every $7 it takes in, you're damn right when you say cutting spending is the solution to financial woes. If a guy is earning a grand a week but his spending habits are in the $1200-$1500 a week range, how far away do you think bankruptcy is for this individual? Economics 101.
And, let me assure you, Frank, you don't have a monopoly on ever having been broke. I could tell you stories about my youth (over a couple of beers), and some of the things we went without, that would cause your jaw to drop to your navel in disbelief.
That's why I became a pirate. 0O:-)

FRANK EARLEY's picture

That sounds tempting....

I haven't had a good " You think that was bad " conversation with anyone in a long time. I don't know whose story's would be worse, but I guaranty it will make the Parrot cry......

PAUL ST JEAN's picture

Hell, a Roadrunner cartoon

Hell, a Roadrunner cartoon makes him cry.

PAUL ST JEAN's picture

Sometimes I think his

Sometimes I think his previous owner should have had the egg he was in for breakfast.

CLAIRE GAMACHE's picture

Speechless

The notion that somebody would rather see thousands of children sitting in school hungry than to contemplate giving back some of their $300 a year tax cut frankly leaves me speechless. Who would be in charge of deciding who is hungry enough to get fed ? Would the children have to faint or go in a coma first?

PAUL ST JEAN's picture

I'm sure some democrat

I'm sure some democrat bureaucrat could figure that out easily enough.

FRANK EARLEY's picture

Hold on, this roller coaster ride has just begun......

As many times as Paul LePage gets tripped up with reality, you would think he would learn to take all possibilities long and short term into account. His scape goat is the Federal Government, it's his favorite excuse for everything. You would expect a Governor in Paul LePage's position to jump at every opportunity, to grab every dollar and protect the rights of ALL Maine citizens.
Unfortunatly for us, the citizens of Maine, our Governor has instead decided to be a true Right Wing, card carrying, down in the dirt, Tea Party, Grover Norquist loving Republican Politician.
Just a couple of months ago LePage had a chance to, (excuse me, I've forgotten all the details), set up Medicaid, under the Obama health care program, the Federal Government would have reimbursed the State 100% the first year, and up to 90% after that. That's 90%, and 100% of each patients cost per year. Even if it was just 50%, this would have been a significant amount of money coming back to the State. Money that could have gone a long way to help keeping people on Medicaid, to help maintain the elderly being able to receive their prescriptions.
Instead, our Governor has chosen to huddle with his yes men and try to figure out how many more people he can separate from health insurance thus saving money. Cutting the elderly and young people using a plan he was told on day one,he wasn't allowed to do. He just assumed he was special, and he would prevail in all this. Again just as our Governor is starting to feel productive, "Reality"kicks him square in the teeth. Now he can' t only, not do what he wanted to do, it's too late to do what he should have done, and between the two, everyone but the Governor pays the price. For all those folks who will no doubt respond that Paul LePage is great because at least he is doing something to reduce the deficit, I say this. Yes, he is doing something, if he's not doing the right something, he is part of the problem not the solution.....

PAUL ST JEAN's picture

"Just a couple of months ago,

"Just a couple of months ago, LePage had a chance to, (excuse me,I've forgotten all the details), set up Medicaid under the obama health care program, the Federal Government would have reimbursed the State 100% the first year,and up to 90% after that. That's 100% and 90% of each patients cost per year."

And all this "reimbursement" money would be coming from where? A federal government that is flat-ass broke? Now, that really makes a whole lot of sense, doesn't it? That's libthink for you.

FRANK EARLEY's picture

Where does it come from?????

Regardless where it comes from, I know where it isn't going. It is going somewhere, but not here. You can not justify a good for nothing Governor, by blaming it on "libthink". LePage has a one track, steel trap mind, the same thought process as the rest of the Republican Party. We all saw how affective this type of thinking is. The Right has proven the rest of the world correct, we all witnessed the brilliant Republican strategy and follow thru on the "Fiscal Cliff".
The reimbursement money is going to the states smart enough to have taken advantage of this windfall. All the rest, (Republican) are left to cut health care, heating assistance, DHHS, and who knows what else. When Paul LePage, rejects any money, where ever it comes from, it becomes his fault, and his fault alone. If he wants to become the poster child for the Republican Party, that's fine. I just don't need to hear him, or anyone else cry babying about not having enough money to cover all his idiotic pipe dreams. He needs to do whats best for the people of Maine, and for God's sake, stop being so Republican......

PAUL ST JEAN's picture

Some of us have dangerously

Some of us have dangerously high opinions of our opinions.

FRANK EARLEY's picture

Sometimes it's a curse...

My own opinion of myself is so dangerous, I actually carry special liability insurance.....

PAUL ST JEAN's picture

Your opinion of yourself has

Your opinion of yourself has not been challenged. You are reading too much into my statement, unless you define yourself solely on the basis of your opinions.

Betty Davies's picture

LePage has a mind like a steel trap...

...always snapping shut.

FRANK EARLEY's picture

Well put Betty, but

I think a better analogy would be "never opening in the first place......

 's picture

BUDGET PROPROSAL

WHAT TYPE OF GOVERNOR DOESN'T ATTEND HIS OWN BUDGET PROPOSAL. i WILL TELL YOU, ONE THAT IS THROWING THE STATE'S ELDERLY DOWN THE RIVER. NOW THAT SENIORS ARE ON S.S. INSTEAD OF STILL WORKING AND PAYING TAXES OUT OF THEIR CHECKS THEY ARE PUSHED ASIDE. MY HUSBAND AND I TOGETHER WORKED FOR 93 YEARS AS A COMBINED TOTAL YEARS OF PAYING TAXES. GUESS WHAT! THE FEDERAL GOVT, GAVE ME A WHOPPING 7.00 COST OF LIVING RAISE A MONTH AND IS MAKING ME PAY 5.00 MORE ON MY PART B INSURANCE, SO I RECEIVED A WHOPPING 2.00 A MONTH COST OF LIVING RAISE. THAT IS A SLAP IN THE FACE FROM THE FED. GOVT. AND THE MAINE GOVERNOR JUST SLAPPED ME AGAIN. MAKES A PERSON REALLY FEEL APPRECIATED.

JOANNE MOORE's picture

Thank you for the spotlight, Sun Journal.

Thank you for acting for the benefit of citizens who have a right to know.

And shame on Gov. LePage. He is an embarassment to his office. And imho, he is a failure as a leader and a coward as a man.

PAUL ST JEAN's picture

He's the only governor since

He's the only governor since Longley who's had anything close to resembling the testicular fortitude to do what has to be done in order to right the Ship of State.

JOANNE MOORE's picture

If he wanted to right the ship of state....

...........he would do well to jump overboard and take his "testicular fortitude" with him!

PAUL ST JEAN's picture

Your opinion has been duly

Your opinion has been duly noted.

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