AUGUSTA, Maine — Gov. Paul LePage on Thursday will present a state spending blueprint for the next two-year budget cycle to the Legislature, and it is expected to reflect the austerity of the times and the governor’s own promises not to raise taxes.
The Republican governor will present his budget for the period starting July 1 to a joint House-Senate session scheduled for 11 a.m. Because Maine’s constitution requires the budget to be balanced, it will have to close what state fiscal officials estimate is an $800 million gap between existing state services and revenues available to pay for them.
“There are some bright spots, but there is going to be some shared sacrifice,” LePage spokeswoman Adrienne Bennett said Tuesday. She said the budget won’t include tax increases.
The current budget ended up at about $5.5 billion after lawmakers trimmed it to reflect revenue shortfalls resulting largely from the recession. It was smaller than the state’s previous two-year budget.
While the focus turns to the budget for fiscal 2012-13, lawmakers on Tuesday completed work on a package of revisions to the current budget that only begins to show the new administration’s fingerprints on state policy.
For example, the supplemental budget includes roughly $70 million to accelerate repayment of the state’s Medicaid debt to hospitals. Paying down the debts now in the current budget triggered more federal matching funds, enabling the state to make good on $248 million in obligations dating from between 2006 and 2009.
Those payments range from several hundred thousand dollars for smaller, rural hospitals — such as $112,000 to Millinocket Regional Hospital — to tens of millions of dollars for large institutions. Eastern Maine Medical Center in Bangor, for example, in slated to recoup more than $40.7 million from the state in the spending plan approved on Tuesday.
“The funding provided in my budget will help preserve vital jobs and ensure critical investments in health care,” LePage said in a statement. The governor signed the bill in private.
LePage had made the hospital debts an issue during his gubernatorial campaign, but lawmakers on both sides of the aisle pointed out Tuesday evening that the Legislature and former Gov. John Baldacci have been working for years to lower the amount, often in tough budgetary times.
“It’s a promise kept for repaying the hospitals,” Senate Majority Leader Jonathan Courtney, R-Springvale, said moments before the chamber passed the bill on a 34-0 vote. The House approved the supplemental budget on a vote of 142-3.
Other highlights contained within the supplemental budget include:
• $1 million in restored funding for municipal revenue sharing.
• $300,000 to keep the doors open at Maine’s Commission on Indigent Legal Services, which provides legal representation to poor Mainers charged with crimes.
• Additional funding for school breakfast programs.
• Changes to Maine’s tax code to allow residents to take advantage of $4.5 million in federal tax breaks.
• Money to keep social services programs operating through the fiscal year.
The package of revisions to the current budget received unanimous support from the budget-writing Appropriations and Financial Affairs Committee.
Several lawmakers had attempted to change the budget bill on the House or Senate floor to redirect additional money toward schools, social services or other programs.
But Sen. Richard Rosen, a Bucksport Republican who is co-chairman of the Appropriations Committee, said the roughly $70 million earmarked for hospital debts was a one-time opportunity to capitalize on higher federal matching rates that will expire with the end of funding through stimulus programs. Delaying payment would mean the state would have to pay more money out of the General Fund in the future to cover those obligations, Rosen said.
House Minority Leader Rep. Emily Cain, D-Orono, said she was pleased the first major bill that the 2011 Legislature dealt with was a bipartisan effort. But Cain, like others, warned that the supplemental was “the easy budget.”
“We expect the governor’s biennial budget to run counter to many of our important Democratic values and to initially split the Legislature along more partisan lines,” Cain, former House chairwoman of the Appropriations Committee, said in a statement. “We trust that the same fair, open and respectful process that led to this bipartisan supplemental budget will be repeated as we consider the budget proposal for the next two years.”
Sen. David Trahan, R-Waldoboro, summed up the upcoming debate on the two-year spending plan this way: “I think the difficulties in the next budget are going to swamp the difficulties in this budget.”
BDN staff writer Kevin Miller and Glenn Adams of The Associated Press contributed to this report.