The Appropriations Committee pulled an all-nighter at the State House and unanimously passed a budget early Tuesday morning that increases school aid to high-value towns on the water, boosts Medicaid payments to hospitals, and adds $15 million to the highway fund.
The budget also funds tax breaks to encourage more movies be made in Maine and gives the same exemption to people with health savings accounts now afforded at the federal level.
A proposal to raise minimum teacher salaries to $30,000 – at an initial cost of $4 million – was pulled out of the budget. In its place, committee members supported a $3,000 annual stipend to those teachers who get national certification and also added to a fund that forgives student loans to teachers who remain in the state to work.
The budget will go next to the full Legislature for a vote, but is expected to pass since the deal was brokered by leadership from both sides of the House and Senate.
The bulk of the $160 million in the supplemental budget covers shortages in the $5.7 billion biennial budget passed last year. Those shortages include about $70 million for heath and human services, including the costs associated with switching low-income seniors over the Medicare Part D drug coverage and shortfalls in the Medicaid account.
Education spending represents another $42 million to comply with the state’s promise to increase aid to education to 55 percent over four years.
The education funding formula, however, was penalizing high value towns, particularly along the coast and inland lakes, and that was a sticking point among Democrats and Republicans alike.
“LD1 promised property tax relief to everyone,” said Rep. Stephen Bowen, R-Rockport, who is on the Appropriation Committee and offered the amendment that helps schools hurting under the formula. He was referring to Gov. John Baldacci’s tax reform bill that increased aid to education to lower local taxes.
Democratic representatives, including James Schatz of Blue Hill and Ed Mazurek of Rockland, said they would have found it hard to support the supplemental budget unless school aid cuts to their towns were addressed.
“It was very questionable I could support it,” unless the formula was adjusted, said Rep. Mazurek.
Under the supplemental budget adjustments, Sedgwick, which had been scheduled to lose $64,000 in school aid this year will now only lose $26,000. State school aid to SAD 5 in Rockland will essentially remain flat versus being cut $238,000.
Other districts benefiting from the formula adjustment include: Bath, remaining flat with this past year versus losing $40,000; Ellsworth, which will get $35,000 instead of losing $37,000; SAD 8 in Vinalhaven which will get $9,000 instead of losing $25,000; SAD 61 in Bridgton, which will lose $250,000 versus $712,000; Five Town CSD in Camden which will lose $99,000 instead of $304,000; and, Deer Isle-Stonington, which will essentially remain flat versus losing $151,000.
Some Democrats on the Appropriations Committee voted reluctantly for the budget because they wanted to bond for transportation projects versus taking the money out of the general fund.
Gov. Baldacci earlier this month had called on legislators to support a $25 million bond, but Republicans continue to oppose any more borrowing, after supporting a bond package last year.
Additional transportation funding was requested after the state was forced to put on hold $130 million worth of road work scattered over 95 cities because of the rising cost of construction and to fund projects protected by Maine’s congressional delegation.
In the interest of getting at least two-thirds support for the budget, House Speaker John Richardson and other Democrats in leadership agreed to forego the bond request and take $15 million out of the general fund for roads and bridges.
There was bipartisan support to increase by up to $5 million the amount being paid to the state’s hospitals for old Medicaid bills.
Hospitals are owed more than $320 million in federal and state payments for Medicaid patients seen starting in 2003 and running through the state’s current budget cycle, which ends in July of 2007.
The supplemental budget already included $12.7 million in additional funding for the state’s share of the debt and an amendment passed early Tuesday morning would add up to $5 million more. Each dollar the state pays leverages two more from the federal government.
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