LePage signs budget but says it only does half the job

Posted June 20, 2011, at 3:40 p.m.
Last modified June 20, 2011, at 6:45 p.m.

AUGUSTA, Maine — Gov. Paul LePage signed the $6.1 billion two-year state budget into law on Monday, but immediately blasted lawmakers for only doing “half the job” and said that he will seek changes in the January session.

“They did cut taxes and they fixed the pension,” LePage said in a brief interview. “But they did not do their job in welfare. They really fell short; they significantly fell short.”

He said he signed the budget because of the tax cuts but that they are not enough in the long run and that further spending cuts will be needed to make sure the state can recover from the recession.

“I didn’t like the fact that they cut taxes and they kept spending the same,” LePage said. “If you’re going to cut taxes, you got to cut spending or you are going to have a gap.”

He said the failure of the budget to curb welfare spending will have a serious impact on the state’s ability to make an economic recovery and must be addressed. When asked if he would propose changes in the state’s welfare programs in January, he replied “yes, sir, you can bet on it.”

The spending package calls for welfare rollbacks, such as eliminating benefits for legal noncitizens not receiving them now. Welfare recipients convicted of drug crimes will have to undergo drug testing, and those who violate welfare rules will face stricter sanctions, LePage said. 

Lawmakers rejected a LePage proposal that would have eliminated MaineCare benefits for parents who earn between 133 percent and 200 percent of the federal poverty level and for childless adults.

LePage said during the summer and fall his administration will work on proposals for the January session to consider. He said he is not sure what changes he will propose until his staff and the Department of Health and Human Services work on the options available to cut costs.

“We will look at what we can do to fix it next time,” he said.

Sen. Richard Rosen, R-Bucksport, co-chairman of the Appropriations Committee that crafted the two-year budget, said the panel and the Legislature did do their job. He said the budget is a package of compromises and that no one at the negotiating table got everything they wanted. He rejected the governor’s claim that there will be a budget gap in future years.

“When we look at the revenue growth that is expected even with the tax cuts, we examined that revenue growth and we still see enough growth to maintain the core services of government,” he said.

Rosen said he welcomes the governor’s efforts to find ways to reduce welfare costs, particularly his efforts to get more flexibility from federal officials for the Medicaid program.

“I am hoping the federal government will grant his waiver request for Medicaid funding,” he said. “That will greatly help us in the future.”

Rosen said the budget has significant cost reductions in many areas, including a large reduction in the unfunded actuarial liability in the state pension system. He said the tax cuts should help spur economic growth and help put more Mainers back to work.

“This was a good compromise,” he said. “No one got all that they wanted.”

Rep. Emily Cain, D-Orono, House minority leader, said no one is ever completely happy with a compromise budget, but she said the governor got tax cuts, pension reform and welfare reform and should be pleased with the accomplishment.

“The Legislature came to a point of compromise and agreement,” she said. “More than two-thirds of us thought it was the right thing for the state of Maine, so I would say we did the whole job.”

Cain said the welfare changes in the budget are “significant improvements” and should be applauded. She said the concern that there will be a budget gap may not be warranted with state revenues continuing to exceed estimates.

“I think this is a pretty good budget,” she said.

The bill’s signing drew quick praise from other legislative leaders unaware of the governor’s criticism of the budget.

“I think that it is a budget that moves Maine forward in a very important way,” said Senate President Kevin Raye, R-Perry. “The largest tax cuts in the history of the state, meaningful welfare reform, essential pension reforms that will strengthen the pension system for years to come.”

He said the bipartisan process used to craft the budget worked and that the budget should be applauded.

House Speaker Robert Nutting, R-Oakland, also praised the budget, saying it is a compromise that will benefit Mainers for years.

“The $150 million tax cut for Maine citizens that takes 70,000 people and removes them from the tax rolls, and reduces the tax rates and helps small businesses, I think that is the keystone of this,” he said.

The budget is an emergency measure and some parts of the measure took effect on signing while others take effect July 1, the start of the new budget year.

The Associated Press contributed to this report.

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