LePage announces plan to repay hospitals

Clarke Canfield/Associated Press

Gov. Paul LePage outlines his plan to have the state repay nearly $500 million in hospital debt and release $105 million in voter-approved bonds Tuesday in Portland.

PORTLAND — Gov. Paul LePage on Tuesday announced a wide-ranging plan to repay hospital debt approaching $500 million, release voter-approved bonds for highways and other public improvements, and construct a new prison to replace the aging, inefficient one in Windham.

Speaking at a press conference at the construction site of the University of New England College of Dental Medicine, LePage said his plan will create jobs and inject $700 million into Maine's economy in 2013. The proposal will be of particular help to hospitals, which can hire workers to fill the positions of those who were laid off because of the state debt.

By paying off the hospital debt, the state will rid itself of the stigma of not paying its bills while giving a much-needed boost to the economy, he said.

"We are in an economic crisis as we speak," LePage said. "The state of Maine's revenues are down, they're down by $200 million."

The Republican governor said he wants to get his proposals enacted quickly by the Democratic-majority Legislature, noting that timing on the hospital debt is critical to ensure the state gets the full federal match.

He's submitted an emergency bill to cover $186 million the state owes to hospitals for Medicaid services dating to 2009, which would trigger $298 million in federal funding. He would get the state's share of the money from bonds to be paid off with future liquor sales. The state will regain control over liquor sales in mid-2014.

With the full $484 million repaid, the governor would release $105 million in voter-approved bonds for transportation, land conservation, clean water and energy-efficiency projects. Democrats, who have made jobs the centerpiece of their agenda, have been pressuring LePage to allow the voter-approved bonds to go to market in hopes of stimulating the economy.

LePage is also proposing $100 million in government facilities bonds to build a replacement for the minimum- and medium-security Maine Correctional Center in Windham. The current compound, whose mostly-male population totals 622 inmates, has been expanded and modified in piecemeal fashion for several decades, compromising efficiency.

LePage said Republican legislative leaders told him they are behind his bill, but he's not confident that Democrats will embrace it.

Democratic Senate President Justin Alfond of Portland said he agrees that hospitals should be paid back, but said the governor's plan is thin on details and the math doesn't add up in paying for revenue bonds using liquor revenues. The governor should also release the voter-approved bonds whether or not revenue bonds are issued to pay hospitals, he said.

Still, Alfond said he's glad to see the governor put forth a proposal.

"We will look at it, we will evaluate it, if we need to make changes we will," he said.

After LePage's presentation at the press conference, hospital and construction company representatives told reporters that LePage's plan is vital for them.

When the state pays its outstanding debt, hospitals will be able to stem the tide of job losses that have occurred the past several years, said Maine Hospital Association President Steve Michaud.

"It will also allow us to stop borrowing against lines of credit (that) many of our hospitals have been doing just to make payroll, make vital investments into hospital facilities and pay local business for the services they provide to our members," he said.

Associated Press writer Glenn Adams in Augusta contributed to this report.

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Comments

Steve  Dosh's picture

09:00 hst ? hump day btw -

09:00 hst ? hump day
btw - Hon , Gov. , Obamacare tkes full effect in 2 0 1 4 :)
Jumping the gun are we ?
http://www.whitehouse.gov/healthreform
† y v m taxpayers

CLAIRE GAMACHE's picture

A few questions

While paying off the debt to the hospitals sounds good I have a few questions I hope our legislators are looking into. First of all do we really owe all this money to the hospitals? There was some question before about the hospitals billing the state for services that MainCare did not actually cover. Has this been looked at? As far as I can tell the DHHS budget is one big fog factory that no one can figure out. We shouldn't be paying money we don't owe. The Governor wants to use the liquor money to pay for it. What is the liquor money being used for now? Where will the funding to pay for the current activities supported by the liquor money come from? Why is the governor so keen on tearing down a prison that is barely 20 years old? Is he still looking forward to privatizing the prisons and is this the reason we need more prison space? Otherwise why is it so important to keep our inmates comfortable when it doesn't matter if the kids in our schools are cold and hungry?
Privatizing the prisons is only another way of funneling tax money to a for-profit corporation and we should not be borrowing money for that.

PAUL ST JEAN's picture

When did the kids in our

When did the kids in our schools become cold and hungry?

Willis Ingram's picture

The State of the State

I am not always a fan of Governor LePage however putting some serious proposals on the table to at least start the dialogue of resolving some of the very difficult problems facing the State of Maine is good news. The hospitals have been much of the life blood of many communites and to not pay them seems to be counter productive. As for the building of a State Prison, hopefully an analysis of the real cost benefit of this project for the long run will show that it is a worth while investment.
I do hope that the next two years of the legislative sessions produce creative/out of the box thinking of how to meet the demands of serving those in the greatest need; those who are part of the working poor; and a way to provide the best possible educational opportunities for the citizens of the State. The people of Maine deserve the best from their elected officials...what they do not need is a mirror of the toxic atmosphere now seen in Washington DC.

Robert McQueeney's picture

The governor sees a responsibility to pay the bills

I applaud anyone who has what it takes to pay their bills, and in this case, it comes with a huge bonus of matching federal funds. Let's pay this bill at a time when we can have federal funds added to it. Let's not wait for those funds to expire.

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