AUGUSTA, Maine — The latest compilation of state agency budget requests to get through the current budget year has reached $149.6 million in general fund requests, and that concerns Gov.-elect Paul LePage.
“One week it was $40 million and then it was $150 million,” he said in an interview. “I am trying to understand why.”
LePage said his budget transition team has been focusing on the larger problem of setting the guidelines and process for drafting the next two-year state budget. He said he is not yet satisfied with the parameters that have been developed for use in that budget writing process.
“But this, the supplemental, will have to be worked on next week as we get the updated figures,” he said.
But, the single largest item in the new budget spreadsheet is the result of meetings between LePage, Gov. John Baldacci and hospital leaders, said Sawin Millett, co-chairman of the LePage budget transition committee.
“The two sat down and looked at ways to speed up the payments to the hospitals,” Millett said. He said a number of options were considered and the $69.5 million figure in the supplemental budget spreadsheet would allow payments to the hospitals of $248.6 million.
“If we can act in the first three months of the year, we get a better matching rate and can pay more of what is owed the hospitals,” Millett said. He said waiting to deal with the issue in the two-year budget would result in the state having to pay more of the bill.
“The matching rate goes back to where it was before the recovery act on July 1st,” he said.
Millett said the best solution would be to appropriate money for the hospitals before Dec. 31 while the matching rate for Medicaid is most favorable for the state. But, he said, with the new Legislature just in office, that idea was discarded as impractical.
“I was somewhat surprised at the increase in utilization of the MaineCare programs and that $18 million request,” Millett said. “We have not had the opportunity to meet with the department on this.”
Most of the spending requests in the draft spreadsheet are for the Department of Health and Human Services. Again, with the reduction in the matching rate for Medicaid set for Jan. 1, and a second matching rate reduction on April 1, the state will need to provide more funds for programs funded under all Medicaid programs. DHHS calls Medicaid programs in the state MaineCare.
For example, it will take $21.8 million in state funds to make up for the decreased federal share in MaineCare services and another $18 million to pay for increased use of the programs.
Another $9.9 million will be needed to pick up the decreased federal share of Medicaid used for mental health programs.
“I don’t think the requests for additional funds for MaineCare will be a surprise to anyone,” said Sen. Richard Rosen, R-Bucksport, the only GOP senator on the Appropriations Committee in the 124th Legislature. The committee for the 125th Legislature has yet to be named.
Rosen said the previous committee knew there would be an increased need for Medicaid-funded programs with “enhanced” Medicaid match rates ending, and the recession causing an increased use of services.
House Minority Leader Emily Cain, D-Orono, agreed. She was the House co-chairwoman of the Appropriations Committee in the 124th Legislature. She said she was surprised at the request for additional funds for hospital payments, although she said Democrats have supported efforts to reduce the payments owed hospitals.
“I am not sure that the supplemental budget will or will not be the place where we will have that conversation,” she said. “I was anticipating that conversation in the biennial budget.”
LePage said he wants his budget transition team to review all of the requests, but he said he would not support appropriating funds to cover “mismanagement.”
He said he is upset at the request by Child Development Services in the Department of Education. DOE is proposing an additional $13 million to pay for the program through July 1.
“You take a line item and you have spent 70 percent over and you are only in December, there’s a serious issue there,” LePage said.
DOE argues they are not over budget, but have a shortage of revenue to pay for the services that are required by federal law. They argue the shortage was the result of changes in Medicaid rules, but at a meeting of the appropriations committee in November it was called overspending by lawmakers.
Other supplemental requests, such as increased food and energy costs, are understandable, LePage said.
There are also some one-time requests, like $920,000 to pay back the federal government as the result of an audit of federal payments to Riverview Psychiatric Hospital. The Maine Emergency Management Agency is requesting $1.1 million to pay the state share of disaster relief from several storms.
State revenues were re-projected up by $111.6 million for this budget year, providing additional resources to meet the supplemental spending needs.
“I don’t think you will see it reach $149 million,” Millett said.
He hopes a supplemental budget request can be completed shortly after LePage takes office in January so there can be hearings that month, and it can be acted on in time to take advantage of the Medicaid matching rates.