AUGUSTA — As the full Legislature remained on spring break, lawmakers on two key committees were working together on closing a state budget gap estimated at more than $800 million.

In a joint meeting of the Appropriations and Financial Affairs and Health and Human Services committees Tuesday, lawmakers reviewed line items in the Maine Department of Health and Human Services’ budget.

The department accounts for about 35 percent ($2.2 billion) of the $6.2 billion budget Gov. Paul LePage is proposing for the next two-year budget cycle.

The Legislature has until June 30 to pass a budget. To avoid a state-government shutdown, the spending plan would have to garner support from at least two-thirds of the Legislature.

Both Democrats and Republicans have said they intend to produce enough bipartisan support to reach that benchmark, but some key philosophical divides remained apparent as lawmakers questioned DHHS officials this week about LePage’s proposals.

“I’m not going to pull any punches; it’s going to be tough,” said Rep. Kathleen Chase, R-Wells, the ranking Republican on the Appropriations Committee.

Chase said the toughest decisions still lie ahead and the outlook isn’t rosy.

“Even the governor says he’s uncomfortable with some of the things he’s had to put forward, so these are not easy decisions, no matter what we do,” Chase said.  

“Everybody is going to have a share of the pain and everybody’s going to have a share of the gain, I guess, but it’s more pain than gain,” she said.

So far, Republicans have been reluctant to raise any taxes and with LePage’s veto pen at their disposal, that option may be difficult to attain.

Even proposals to suspend a state income tax break that goes into effect next year have fallen largely on deaf ears.

And despite some speculation, Republicans might be interested in allowing an increase in motel and hotel lodging taxes. Rep. Ken Fredette, R-Newport, said that was far from a universal position of his caucus.

“I don’t think there is any agreement on the raising of any taxes,” Fredette said.

Fredette, the House minority leader, noted the majority Democrats on the Legislature’s Taxation Committee already have rejected provisions of LePage’s budget that would suspend state revenue-sharing with local municipalities. That change alone costs $250 million, Fredette said Wednesday.

“If Democrats have decided to do that, my question is a very simple one: Where are they going to come up with $250 million?” Fredette said. 

Democrats, who lack a veto-proof majority, are sticking to their position that any proposals that shift costs to local governments or schools are also tax hikes.

“The governor says he doesn’t want to raise taxes, yet his budget raises property taxes on all Maine people,” Jodi Quintero, a spokeswoman for the House Democrats, said Tuesday. “We need alternatives that aren’t going to strap Maine’s middle class and small-business owners.”

Quintero agrees the only option to avoid a government shutdown on June 30 is a bipartisan one.

“Democrats and Republicans are going to work through the same process that we always do every year and in every legislature to come to a bipartisan agreement in the Appropriations Committee,” Quintero said. “Political interference in that process will only hurt our efforts to reach a compromise.”

During a recent radio address, LePage said that while his proposal for the next two-year budget cycle is being criticized, he hadn’t heard any ideas from the Democrats in the majority.

“Folks, it has been three months,” LePage told listeners. “Beyond the sound of their petty criticism, all we hear is crickets.”

The governor then played the sound of crickets chirping.

“If they don’t like my common-sense approach to managing our finances and our future, that’s fine,” LePage said. “But where are their budget proposals? Where are their solutions?”

At the core of the Republican argument is the belief that the benefits Maine provides to some citizens via the Department of Health and Human Services are far too generous and more than the state can afford.

Given that the state already has higher-than-average taxes, Sen. James Hamper, R-Oxford, said Maine needs to be more in line with what other states provide in benefits to citizens. One example he found “stunning” was the amount the state provides to families that adopt children from state custody.  

Maine pays a rate of about $26 per day to adoptive families, an annual income tax credit averaging $14,000 and a tuition waiver for the children if they attend a University of Maine System school.

In 2012, the total cost of adoption services’ subsidies was $19.7 million, according to Therese Cahill-Low, director of DHHS’ Office of Child and Family Services.

Hamper, who adopted two children from state custody with his wife in the 1980s, said they always turned down support from the state. But, he noted Tuesday, of the 3,800 or so families that have adopted children from state custody, only 50 have turned down state aid.

He’s not opposed to helping families that need the help but believes the subsidies — at a minimum — should be based on need.

Chase said Maine’s generosity has long been part of the problem. 

“Once you put it out there, it’s tremendously difficult to pull it back in,” Chase said. 

But after weeks of hearing from people who will be affected by the proposed budget changes, Rep. Peggy Rotundo, D-Lewiston, agrees the choices the committee faces are difficult.

And difficult may be an understatement, said Rotundo, co-chairwoman of the Appropriations Committee.

“The choices we are making are now getting down to being a matter of life or death for some Mainers,” Rotundo said.

She said the public has presented a variety of options for solving the state’s budget shortfall, including increasing the sales tax and suspending a state income tax break that doesn’t go into effect until next year.  

Republicans will argue that tax break benefits 70,000 of Maine’s lowest-income residents who will no longer have to pay state income tax, but Democrats say the tax breaks, which add up to more than $400 million, are about half of the state’s budget problem in a nutshell.

They also note the breaks provide a greater total tax break to the wealthiest Mainers and not to low- and middle-income wage earners.

The LePage administration is looking to align Maine with the federal government’s requirements for programs such as Medicaid. But those who will lose all or part of their health care coverage under those proposals will be faced with critical decisions, Rotundo said.  

In Lewiston, a large number of people participate in the state’s Drugs for the Elderly Program, which would be eliminated under the LePage budget proposal.

The reductions save the state $7 million a year but would affect between 70,000 and 80,000 Mainers. Of those, 4,584 elderly Mainers would lose their prescription drug coverage, according to a DHHS fact sheet on the proposal.

Another 47,000 Mainers would be affected by changes to the state’s Medicare savings and crossover programs, while Maine hospitals would lose an estimated $45 million under the LePage budget proposal.

Rotundo said she has found it disingenuous of LePage to criticize lawmakers for not resolving the state’s debt to its hospitals when his budget proposes more reductions for them as well.

Rotundo said her committee would continue to focus on a process that has worked in the past to develop numerous bipartisan budgets.

“There may be a little frustration on the lack of understanding the governor has on how this works, but we intend to continue on with our work and will come to an agreement we believe will be in the best interests of most Mainers,” Rotundo said.

She said the Appropriations Committee would begin voting on amendments to the governor’s budget proposal next week.

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