LePage: Paying debts a matter of character for Maine

AUBURN — Gov. Paul LePage on Friday reiterated his call for the state to pay off the $186 million it owes hospitals for MaineCare services, and he again detailed his plan for doing so with revenues from the state's wholesale liquor business.

Amber Waterman/Sun Journal

Gov. Paul LePage addresses members of the media and the public about his plan to use the revenue from the state's liquor business to pay back $186 million the state owes to 39 hospitals. LePage spoke at Roopers Beverage and Redemption on Main Street in Auburn on Friday.

Amber Waterman/Sun Journal

Steve Roop, owner of Roopers Beverage and Redemption in Lewiston and Auburn, adds his support for Gov. Paul Lepage during a press conference at his Main Street store in Auburn on Friday. He also said the lower wholesale prices would be passed on to consumers, and higher profits would help him pay and insure employees.

Amber Waterman/Sun Journal

Gov. Paul LePage addresses members of the media and the public Friday about his plan to use the revenue from the state's liquor business to pay back $186 million the state owes to 39 hospitals. He spoke at Roopers Beverage and Redemption on Main Street in Auburn.

Amber Waterman/Sun Journal

Sen. John Cleveland, D-Auburn, responds to Gov. Paul LePage's press conference at Roopers Beverage and Redemption on Main Street in Auburn on Friday morning. "Democrats want to pay the bill, and they are prepared to sit down and do that," Cleveland said. "I and all other elected officials, including the governor, swore a solemn oath to follow the constitution of the state of Maine."

Standing with shelves full of liquor bottles behind him at Roopers Beverage and Redemption on Main Street, LePage said that for him, paying the state's debt was a matter of character.

"At the end of the day, all we have is our character," LePage said. "And a good character is you live by what you say you are going to do and you pay your bills. And I sure believe the state of Maine should not have the reputation of not paying its bills."

A bill offered by LePage before the Legislature would involve the state renegotiating and putting back out to bid a contract that allows a private company to run the state's liquor business. That contract could bring in as much as $45 million per year in new state revenue, according to Gerry Reid, director of the Maine Bureau of Alcoholic Beverages and Lottery Operations.

LePage's plan would use some of that revenue to finance $186 million in revenue bonds that would be used to pay Maine's hospitals and to receive $298 million in federal matching funds, for a total of $484. MaineCare is the state's health insurance program for low-income families and individuals. It is funded with federal and state money.

Maine is one of 17 states that controls the distribution of hard liquor within its borders. The state leased that business to Maine Beverage Co. in 2004 for 10 years in exchange for a $125 million up-front payment and an annual cut of profits. That annual cut was $8.6 million in 2012, Reid has said.

Reid, who joined LePage on Friday as he visited the liquor store and then Central Maine Medical Center in Lewiston, said part of the plan involves making the state's liquor business more competitive with New Hampshire by lowering prices on select brands and volumes of alcohol. 

The plan as designed by Reid also would lower costs to state agency liquor store operators, allowing them to make more profit.

"They deserve a little fairer return," Reid said. "By restructuring the financial contract with the wholesale partner, we will have the value to do all those tasks."

Steve Roop, the store's owner, said he supported LePage's plan. Roop said the lower wholesale prices would be passed on to consumers, and higher profits would help him pay and insure his employees.

"We all know that anytime that you go through New Hampshire — 60 percent of the people that I know, stop at the liquor store there," Roop said. He owns five stores in Lewiston and Auburn and four are authorized to sell hard liquor.

After LePage's tour of Central Maine Medical Center, Laird Covey, the hospital's president, said he supported the governor's bill and his plan. Covey said the $51 million the state owes CMMC would be used for a variety of purposes, including allowing the hospital to pay its employees without borrowing to do so.

"Paying off the debt first lets us get out of the fact that we regularly access a line of credit to meet our payroll, along with most of the other hospitals in Maine in the same situation," Covey said. "It takes care of the fact we have major debts we are not able to keep up with. So it's a big factor."

Covey said the debt repayment, in and of itself, may not be enough to allow the hospital to grow jobs, but it was important to the hospital's long-term financial stability.

However, Democrats, who are in the majority at the State House, have questioned whether LePage's plan to borrow money to pay debt is constitutional. They say a previous opinion from the Maine Attorney General on the issue didn't bode well for the governor's plan. 

But LePage's plan depends on privately backed revenue bonds and not taxpayer-backed general obligation bonds. LePage also disagrees with the assumption that the hospital debt is being defined as an operating cost versus a debt.

On Friday, he sharply rebuked the assertions that his bill, LD 239, has parts that could be ruled unconstitutional. 

"It's all a matter of interpreting the state constitution," LePage said. "If you are an opponent of this bill, then you obviously don't believe it's appropriate — it's not constitutional. If you read the constitution and you understand English, it's very constitutional."

State Sen. John Cleveland, D-Auburn, spoke after LePage on Friday. He said his party was still concerned and believed LePage is mistaken. Cleveland said LePage should be negotiating with lawmakers on reaching a solution and not campaigning on the issue.

"Democrats want to pay the bill, and they are prepared to sit down and do that," Cleveland said. "I and all other elected officials, including the governor, swore a solemn oath to follow the constitution of the state of Maine. I'm prepared to take all legal action to pay the debt, but until we resolve this attorney general's opinion, I'm not sure the governor's proposal works."

Cleveland said Democrats and Republicans, including the governor, were in agreement that paying the debt would be good for the economy.

Democratic lawmakers also have urged LePage to release more than $105 million in state general obligation revenue bonds that would trigger more than $296 million in federal matching funds for bridge and road construction, public education facilities and economic development projects across Maine.

LePage said he would not do that until a deal is struck on paying the hospitals. 

He said Friday that if Democrats would sign off on his liquor bill, he would release the general obligation bonds at the same time he authorized the revenue bonds for hospitals.

"Hey, the pen's right here," LePage said, reaching into his coat pocket. "I'll sign them both together, immediately. In fact, if I could trust them, I would do it on a promise."

LePage's bill, as well as a competing measure authored by Senate Majority Leader Seth Goodall, D-Richmond, are to go before the Legislature's Veterans and Legal Affairs Committee at 10 a.m. Monday, March 11.

sthistle@sunjournal.com

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Character

“At the end of the day, all we have is our character,” LePage said. “And a good character is you live by what you say you are going to do and you pay your bills. And I sure believe the state of Maine should not have the reputation of not paying its bills.”

What is character? It is the interrelated parts of “mental and ethical traits marking and often individualizing a person, group, or nation”.

With respect to “character”, consider the governor’s efforts in the removal of collective bargaining rights for Child Care Providers. The message to the citizens of Maine; “you have no rights to fair compensation and benefits”.

With respect to “character”, consider the governor’s attempt to repeal the Maine ban of BPA, the harmful chemical found in plastic bottles. The message to the citizens of Maine; “Paul LePage and his administration do not care about your health concerns”.

The list is endless.

And now it is in the governor’s “character” to manipulate Mainers; to embarrass the citizens into thinking payment of an economic debt is a matter of morality. Economic debt is the obligation to pay a certain sum of money; a simple, cold, and impersonal transaction and transferable. Human effects are not calculated, only principle and interest.

Morality refers to a code of conduct that applies to all who can understand it and can govern their behavior by it; morality should never be overridden, that is, no one should ever violate a moral prohibition or requirement for non-moral considerations.

How is our sense of morality and justice reduced to the language of a business deal; a moral obligation becomes an economic debt? Money. It is money’s capacity to turn morality into a matter of impersonal arithmetic, justifying what would otherwise seem outrageous or obscene.

With respect to “character”, consider in 2010 voters approved the Oxford Casino under the promise that 46 percent of the profits would help fund public education in Maine. However, unless something has changed, the governor intends to use those funds ($14 million) to address a gap in the state’s budget.

In doing so the governor broke a promise between the state and its citizens on where the $14 million was to be spent. A debt obligation took precedence over a moral obligation in the education of children. What if an audit discovered $14 million (3% of $484 million) in erroneous hospital billing? And yes, what would be the cost of that audit? A debt obligation and moral obligation may be addressed.

A debt obligation owed the hospitals has become a moral obligation. A moral obligation towards education and the children of Maine is now a debt obligation; a simple, cold, and impersonal transaction. That is the “character” of Maine’s governor.
Yes the hospitals should be paid. However, has there been a third-party audit of the outstanding hospital debt? The DHHS’ inconsistent financial reporting over the last two years raises the following question, “If the state struggles with understanding the area of their own financial house related to healthcare, why should I believe the state is correct in stating what is owed to the hospitals? “

When the bill comes at a restaurant, or to our home, it is normal to validate its accuracy before we pay it. We’ve all experienced inaccurate bills and had them corrected.

Pay a majority portion to the hospitals now, and the balance following validation of its accuracy.

Catherine Pressey's picture

Sick of

hearing that it is the Democrats fault we have not paid the bills! Sick of the Republicans complaining about how much they have to pay in taxes. The middle Americans pay way more than their fair share in taxes. And they have no huge boats or can be at work only a few weeks and take a vacation to Florida. Yes, LePage the god of the state of Maine. Gosh just watching the video of him, gets me a wee bit po'd. The mannerisms of a very nasty angry man, with power to abuse. I know he thinks he is trying to do the right thing. But continuing to fight with the so called enemy the Dems. Hey! LePage get this they are on the same team as you, you all work for the betterment of our state. Liquor stores or money from them if it can pay down the bills, there never should have been a middle man. LePage talks about walking the walk and his word. One issue he supports is Abuse against Women or any abuse. Lots of Abuse is because of liquor hard liquor and heck yes even beer can change people. Now think about it, the hospital have people in certain wings dealing with abuse of hard liquor and beer and other drugs. Now we are going to pay them the debt by raising the money from the very thing that in large numbers can cause families to not stay together and feed the kids. Guess it is like this if we the state of Maine can make money on it like years past. Like NH does, only Maine does not want to own the liquor store. God do not take this away from our local stores. Let those stores pay the W/C and employee cost. Yes, people we need a Governor that can stand up and be respected. Recall him get him out of there. Or use some of what he wants to do as a last resort. My opinion.

CRYSTAL WARD's picture

Is he kidding?

Again Gov. Lepage states that paying the states bill is SOOOOOOO important and now a show of character-- BUT only paying bills owed to hospital corporations !!!!!!!!!!

NOT paying the bills to the Maine employees retirement system,bills owed for 35 years !!!! Defaulting on the bill owed to retired Maine public employee is just GREAT to Gov. Lepage -- no matter of character here -- just default and smile!!
Gov. LePages "it is a matter of character for the state to pay its bills " is hypocritcal to the10th degree. The hospitals need to get in line with the rest of the BILLS the state owes and take their turns

RAYMOND FRECHETTE's picture

The governor is on the right

The governor is on the right track; he cannot be expected to remedy the mistakes of the past 35+ years in the short time he has been in office, esp since the last election when he can do no right by the opposing party which is responsible for leading the State since Ed Muskie was elected over 50 years ago.

DOROTHY PETERS's picture

LePage

This governor has so many temper tantrums and blusters in anger so often that it is difficult to sort out the good ideas from the ridiculous. Government is all about compromise; not Obama style compromise or LePage style compromise, but real compromise. That means adults get in a room and work out the details of what is right for Maine. Calling the legislature a day care center accomplishes nothing. Telling people to kiss his butt accomplished nothing. This governor has some good ideas. It is unfortunate that they are masked in the no-it-all trappings of a school yard bully. It is an embarrassment to Maine to have this image displayed nationally in the media. Please governor, most of us agree that we should take the majority of the liquor profits back. We also agree that we need to pay our hospital debt. After two plus years of your administration, however, don't you think it is time to set a proper tone for governing? Maine people deserve not only decent ideas but quality leadership to implement these ideas. One man does not have all the answers, and listening to others might be good for Maine. Please governor.

PAUL ST JEAN's picture

LePage suffers from Bush

LePage suffers from Bush Haters syndrome. Neither man could do no right regardless of how right it might be. It really makes it difficult for us clear thinking conservatives to take the liberals seriously on ANY issue.

RONALD RIML's picture

Tell the Mob Fat Man

Free People don't Bend to Threats.....

 's picture

What a Hateful Comment

How does the picture of an obese man add to this discussion? Does Mr. Riml think that is funny?

RONALD RIML's picture

I theenk eet funee yo blieve Gubernator mite look lak dees.....

PAUL ST JEAN's picture

Whenna u gonna pay us de 20

Whenna u gonna pay us de 20 grand yuse owe us?

FRANK EARLEY's picture

What's his point?????

Every time LePage speaks, i enjoy the challenge of decoding his messages. He has gotten to the point, as Governor of Maine, of not being able to carry on a mature civilized conversation with anyone. The Democrats want LePage to sit down and discuss a responsible solution to the debt problem. That will not, and can not occur. Paul LePage has been so wrong, not only in his directives, but the methodology in his delivery. When a person reaches the point of having to threaten hardship or withhold obligations, just to get an idea heard, there is a major problem. To make his problem even worse are the enablers. These are his supporters, his "Yes" men. that fringe group who support his methods, they do so blindly without considering the consequences of his actions. They do this because, the majority of the damage will affect other people. People they could care less about. These people go through life with rose colored glasses, adorned with a huge dollar symbol in the middle. That's because money is the center of their tiny little universe. As far as the Governor having character? To have character, he needs first to stand up and be a man. In all my professional experience I've yet to meet a bully, with any character. You don't need character to pay the bills, it takes responsibility, maturity, and discipline. with those three traits, your on your way to having character......

 's picture

Talk About Character

Our wonderful governor is trying to pay bills that are, in some cases, aged 5 years. People who fail to meet obligations to pay bills are lacking character. People who pay bills on time and as agreed meet their obligations. People with character meet their obligations. You can spin this any way you want and call him names all day, but it doesn't change the fact that that at least some Democrat legislators are trying to continue to ignore their obligations.

ANTHONY NAZAR's picture

The problem is not

the bill. I, and most Mainers, agree that the bill must be paid.

The problem is that the bully is at it again. Government is the art of compromise which requires comity between the people, the legislature and the governor. LePage set the tone early by refering to the electorate who had the temerity to disagree with him as "idiots." He joked about the hormonal effects of BPA on children implying that profit trumps health. The list is too long but should include his rudeness toward Democratic legislative leaders and now his "my way or the highway" approach.

Sycophants say that his plain spokenness is refreshing. I would suggest they defend LePage simply because he is a conservative Republican who angers everyone else. They think that's "funny." It may be to them, but the quality of Mainer's lives is already suffering because of his antics.

Maine needs a process for recall. Return LePage to Mardens as defective merchandise. He isn't working for us.

 's picture

How is trying to pay bills five years old "Bullying?"

The easy way out is the ignore bills due and payable, as some Democrat legislators have done for five years. Dealing with people who chose not to meet their obligations after five years requires some clear, forceful talk. Our great Governor cannot sugar coat when talking to common deadbeats. Plain talk required.

PAUL ST JEAN's picture

"Goverment is the art of

"Goverment is the art of compromise which requires comity between the people"......
Are you referring to the same art of compromise and comity being displayed by the Buffoon In Chief and his democrat thugs towards the republicans in Congress? Just wonderin'.

Robert McQueeney's picture

Pay the bill

We have here, the ready ability to pay our bill. Why is it that one group of our state government does not wish to pay the bill? Get Maine out of the red and back into the black.

 's picture

Intentions + lack of action = squat

So, the Dems want to pay their bills, run up by MaineCare overspending, but they haven't paid them. For years.

Bizzare.

RONALD RIML's picture

So I ask you Bob - Why do Republicans never wish to restore

taxes to their old rates to pay down our debts??

It goes both ways, Lad......

 's picture

Mr. Riml...

...some of this outstanding debt is aged 5 years. The tax rates changed this past January 1st. The Democrats didn't pay the bills even when the tax rates were at their old inflated highs. Your argument doesn't make any sense.

I am all in favor of the new tax rates. I wish the rates were lower. If you are in favor of raising the tax rates back to, or even higher, than they were prior to 57 days ago, you are obviously in favor of reinstating Maine state income taxes on about 70,000 working Mainers. That is quite mean-spirited as these folks are probably trying to provide an honest living for their families.

I don't believe that the Democrats are serious about paying this past due debt. They wouldn't be playing these games. This is an issue that the Governor has tremendous support on.

Let's all get behind our great Governor and get this debt cleared.

Steve  Dosh's picture

Mainers Aloha from Florida

Mainers Aloha from Florida 14:45 EST
" A bill offered by LePage before the Legislature would involve the state renegotiating and putting back out for bid a contract that allows a private company to run the state's liquor business. "
i guess i'd ask myself how much it is going to cost to reneg on the contract first ?
Is there a quit clause ? Quit clause for either party ? We used to have them in the US Federal Govt.
Either party could back out with no penalty for what ever reason
We could not purchase liquor , either
/s , Steve in sunny St. Pete . .visiting •

ERNEST LABBE's picture

Steve

I sometimes am half impressed by your comments. Evidently I shouldn't be. The old contract runs out in 2014. Perhaps you should research a bit before commenting.

PAUL ST JEAN's picture

"We used to have them in the

"We used to have them in the US Federal Govt. Either party could back out with no penalty for what ever reason."
That is so laughable and typical of the feds. If a contract isn't going to be binding; why have a contract in the first place?

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