LePage administration submits second emergency 2011 budget

Posted March 28, 2011, at 6:11 p.m.
Last modified March 28, 2011, at 6:45 p.m.

AUGUSTA, Maine — Driven by budget problems in the Department of Health and Human Services, Gov. Paul LePage has submitted a $64.9 million supplemental budget to pay state bills through the end of the current budget year that ends June 30.

“It’s largely the increase in the utilization of services under MaineCare and the settlement of the lawsuit concerning targeted case management,” said Finance Commissioner Sawin Millett. He said $61.7 million of the total supplemental budget request is for items in DHHS.

“We also address a shortage of funding in Children’s Development Services and in funds needed for court-appointed counsel,” he said.

Millett told lawmakers the use of excess amounts in various DHHS accounts and additional federal revenues for the agency will pay for $23.8 million of the budget.

Another $29.7 million will come from state reserves, often called the rainy day fund. Once the money is taken from the fund, it will have only between $6 million and $7 million in reserve.

That move raised concern among several members of the budget-writing appropriations committee.

Sen. Dawn Hill, D-York, said she was very concerned about the significant reduction in state reserves and how that may affect the state’s credit rating. The credit rating agencies will be reviewing state finances in anticipation of a bond sale in June.

“I got to tell you I have a hard time with that, bringing that down to about 6 million dollars for the entire state,” she said.

Millett said language in the measure would direct that the first $25 million of any surplus at the end of the budget year be placed in the reserves fund. He hopes that will be recognized by the bond rating agencies as the state seeking to address its low reserves.

“I assume they will be watching how we handle this,” said Rep. Ken Fredette, R-Newport.

Millett agreed and said it is one of many issues he expects the agencies will look at as they review state finances and decide on a credit rating they will assign the bonds scheduled for sale. That rating pegs what it will cost the state to borrow.

Lawmakers also expressed concern at some of the funding sources identified to plug the budget hole. For example, the fund that covers accident, sickness and health insurance for some firefighters and law enforcement would be reduced by $777,738.

Another concern was raised about the $715,890 proposed to be taken from a program that has provided governors with the ability to provide training services for new companies that locate to the state or existing companies that expand.

“This pretty much wipes out this program,” said Rep. Peggy Rotundo, D-Lewiston. “When you were here as a member of this committee you were one of the great defenders of this program, commissioner. What will replace this?”

Millett agreed that as a state representative, he strongly defended the program. He said it “pained” him to advocate for the cuts as commissioner, but he said there has not been the demand to warrant keeping the fund at current funding levels.

“Going forward there is language in the law that allows the governor to use his contingency account for this purpose,” he said. “Hopefully, there will be increased demand.”

The budget proposes shifting nearly $1.3 million from the Learning Through Technology Initiative, the program that funds the laptop computers in the schools program, to partially fill a hole in the Child Development Services program. CDS provides early education services to preschool-age children and their families.

The budget also provides an additional $550,000 to pay indigent legal services. The program is now administered by the Indigent Legal Services Commission and the agency inherited some bills from the judicial branch when it took over paying attorneys to represent poor Mainers that cannot afford a lawyer when they have been charged with a crime.

The budget has not been printed so it will be sometime in April before a public hearing is scheduled on the proposal.

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