AUGUSTA – The LePage administration unveiled $250 million in proposed budget adjustments Friday that would cut health insurance to 28,000 adults, eliminate vacant jobs and borrow money from the state’s rainy day fund.
The package, described by lawmakers as a mini-budget, makes significant policy changes and reworks the tax cut plan originally proposed by Gov. Paul LePage in his two-year, $6.1 billion budget.
The Legislature’s Appropriations Committee will hold a public hearing at 1 p.m. Wednesday to get feedback on the proposal.
“I feel like we have a new budget in front of us,” said Sen. Dawn Hill, D-York. “It’s kind of a game changer.”
The proposal seeks to close a $164 million hole in the budget caused by lower than expected state revenues, a recalculation of retirement system debt, a court settlement in the Department of Health and Human Services and continued growing demand for Medicaid services.
“This is our best effort at getting you back into balance,” said Sawin Millett, commissioner of the Department of Administrative and Financial Services.
He said the administration offered savings beyond the anticipated deficit with the understanding that not all proposals will be adopted.
To close the gap, the administration is proposing to eliminate health care coverage for an estimated 28,000 Medicaid-eligible adults as of Jan. 1. That would save more than $37 million.
The cut to health insurance coverage “came as a huge surprise” to Rep. Peggy Rotundo, D-Lewiston.
“There’s a lot in (the budget) that’s deeply troubling to me,” she said. “We’re looking at almost 30,000 people losing health insurance.”
In addition, Rotundo said she’s worried about a proposal to repeal collective bargaining rights for child care workers and the proposed elimination of Maine Clean Election Act funds for gubernatorial candidates.
The budget takes $29.7 million from the state’s rainy day fund, reduces a transfer of $20 million to $10 million for transportation needs, and counts on $16.8 million in federal aid tied to an improved computer billing system.
In addition, it eliminates 259 vacant state positions to save $7.7 million.
It also makes a significant change to an earlier proposal affecting state retiree and teacher health care, which had drawn heated criticism from unions.
That proposal would have required any retired state worker or teacher to pay the full cost of their health care until age 65.
Millett said the administration now wants to require retired state workers and teachers to pay the full cost of their health care until they reach their normal retirement age – typically 60 or 62.
“We’re pleased the governor reduced the age from 65 to normal retirement age,” said Chris Quint, executive director of the Maine State Employees Association.
Lawmakers too wanted that change, said Rep. Kathleen Chase, R-Wells.
“Most of us did feel it was an unfair thing to put it out there at the end of their career,” she said.
But, Quint added, the union is unhappy that the budget continues to fund $200 million in tax cuts at a time when state workers are expected to pay more into the retirement system, accept a pay freeze, and lose payments that reward long service.
The revised package also changes the mix of tax cuts, replacing a mechanism designed to help businesses save money on equipment with a suite of cuts to the income tax, estate tax, taxes on commercial fishing and taxes on parts and supplies for windjammers.
Millett said the governor’s proposal is similar to one advanced by Republicans on the Legislature’s Taxation Committee.
The package also creates the Governor’s Office of Communications, which would eventually consolidate public information officers at several departments into one, Millett said.
In addition, it seeks to reorganize the State Planning Office into an Office of Policy and Management and proposes to pay the director of that office between $70,616 and $102,689.
One of the Medicaid changes would eliminate health insurance coverage for parents. Rotundo said Democrats put that in place years ago because studies showed that if parents had health care their children would be more likely to be covered as well.
The administration is also proposing to eliminate health insurance coverage for childless adults. Maine is one of only 15 states to provide coverage to that Medicaid-eligible population, said Mary Mayhew, commissioner of the state Department of Health and Human Services.
The administration did recommend other changes to welfare. While the original package would have eliminated medical assistance for all legal noncitizens who have lived in Maine fewer than five years, the new proposal would continue to provide coverage for children and pregnant women.
Chase said with many moving parts, the committee will have to work together as they face a legislative adjournment date of June 15.
“It’s still going to be a negotiation for all of us,” she said.
MaineToday Media State House Writer Susan Cover can be contacted at 620-7015 or at:
scover@mainetoday.com
Send questions/comments to the editors.
