Recently, the Democrats did something I thought I would never see — they opposed a bond. Make no mistake, I am not a fan of bonds and rarely vote for them myself, but my friends on the other side of the aisle rarely see a bond they don’t like.
First, some background. Gov. Paul LePage announced a plan to create jobs and repay the state’s overdue MaineCare debt to Maine hospitals. The medical sector is one of the largest, fastest-growing, and most lucrative career fields in the state, and the state owes it almost $500 million.
As a result, Maine hospitals have been implementing layoffs, hiring freezes and construction freezes. For example, St. Mary’s Regional Medical Center in Lewiston announced last month that it would have to lay off 25 people and eliminate unfilled positions, directly citing the $23 million debt owed to it by the state. In addition, the state owes about $52 million to Central Maine Medical Center, $70 million to Maine Medical Center, and $72 million to Eastern Maine Medical Center. These are just a few of the hospitals that we owe.
Repaying these debts as soon as possible doesn’t just make fiscal sense, it is a moral and economic imperative. Paying the state's bills is simply the right thing to do.
The governor proposed a bold plan to essentially refinance the state’s debt to the hospitals by issuing a bond backed by the state’s lucrative liquor distribution business. Under the plan, the state will use bond money to pay the hospitals in full and repay the bond with revenues from liquor sales.
This has a dual benefit. First, it takes the debt burden off the local hospitals and puts it in the hands of willing bond holders across the country. Second, it allows the state to leverage valuable federal Medicaid matching contributions to pay down the debt. The more time goes by, the higher the share of the debt the state must pay.
This is a common-sense, fiscally responsible plan to rebuild trust with the state's creditors and pay the bills after piling them up over years of Baldacci-era financial mismanagement and out-of-control Medicaid expansions.
It is time to make this right.
The governor has been debating Democrats about issuing another voter-approved bond for infrastructure. He has maintained that it is irresponsible to assume this new debt while the hospital issue is left unresolved. The Democrats wanted to borrow regardless. However, Moody’s specifically cited Maine’s debt to its hospitals as a negative on its credit outlook.
The hospitals did not ask for this debt. They are holding the state's unpaid bills, waiting for it to meet its obligations. Each day that goes by is a day that hurts employment and patient care in Maine. At the same time, resolving this issue before taking on any new debt for infrastructure is the fiscally responsible thing to do.
The governor has therefore stated that if the state can repay the hospitals, he will issue the infrastructure bond. This sounds like a reasonable solution that both parties can get behind, and I, for one, expected a warm response to it from Democrats.
Democratic Senate President Justin Alfond came out against the hospital repayment proposal — tepidly at first — with vague objections. The day after the governor announced his plan, however, Alfond found a reason to oppose it. He said he may want to use the liquor distribution business for something else, and was considering selling it outright, just as Gov. Baldacci did in 2004. This move proved to be one of the state’s costliest mistakes in years, with the state missing out on at least $300 million in revenue just so it could find the cash to fill a one-time budget gap.
Sen. Alfond may want to repeat that history, but Maine can’t afford it.
Maine people need solutions, not excuses. Maine people need Democrats to stop playing the opposition party, come together with Republicans, and start getting to work on the titanic fiscal and economic matters facing this state.
Maine people need their representatives to pass the governor’s hospital repayment plan.
Rep. Ellie Espling, R-New Gloucester, is serving her second term in the Maine House representing Durham, New Gloucester and part of Lisbon. She serves on the Inland Fisheries and Wildlife Committee.