Panel nears finish line on bill to cut $140M in spending

Posted Feb. 05, 2012, at 4:18 p.m.
Richard Rosen
Richard Rosen

AUGUSTA, Maine — Lawmakers are close to completing work on a bill that will cut more than $140 million in spending and pay the Medicaid bills for the current budget year after a day of partisan caucuses and lengthy negotiations.

“We are very close to being able to have a proposal that fully funds the shortfall for this fiscal year and send a bill upstairs [to the full Legislature] that will make sure the bills will be paid,” said Sen. Richard Rosen, R-Bucksport, the co-chairman of the Appropriations Committee. He said Saturday evening that the bill will prevent the “drastic measures” that have been mentioned by Gov. Paul LePage, such as closing schools or nursing homes.

“We have more work to do on Monday but it is my hope we can swiftly move the bill upstairs and get it to the governor for his approval,” he said.

Rosen said several of the pending proposals need to have the legal language to implement them be completed and reviewed before the panel can take a vote on including them in the budget. He said some items are complicated and have gone through several drafts.

Rep. Peggy Rotundo, D-Lewiston, the Democratic lead on the committee, agreed. She said the budget votes by the panel, some which she opposed, are all part of a compromise that eases some of the cuts in medical services while addressing the Medicaid shortfall.

“I think we have done a good job of finding other sources of revenue to take out some of the really awful cuts,” she said Saturday evening.

While LePage proposed solving the Medicaid budget shortfall entirely within the Department of Health and Human Services, lawmakers on the budget writing panel rejected that approach and developed a hybrid bill that combines dozens of separate line items in the budget proposed by the governor as well as $25 million in savings for the second year of the budget identified by the streamlining task force.

The scores of cuts in that package also provide $3.2 million in savings for the current budget year.

The task force measure has cuts ranging from under $100 in small agencies to $3.1 million in cuts to hospital reimbursements. Hospitals took a second hit in the Medicaid section of the measure tentatively approved by the panel Saturday for $10.1 million in reductions over the next two years.

“I am not going to be able to support these cuts,” Rotundo told the committee. “These cuts are just really devastating for those hospitals in the state that take a particularly large number of MaineCare members.”

MaineCare is the state’s name for the Medicaid program that provides health care for poor Mainers and is paid for by both the state and federal government. The feds pay roughly two thirds of Medicaid, so a $10 million state cut translates into a $30 million loss of funds to the hospitals.

Rotundo vowed to keep working to find alternative funding but acknowledged that will be difficult as the panel has already voted to take funds for other areas of the state budget to fund the hybrid measure.

“We are trying to find more efficient and effective ways to deliver programs and that is difficult to do,” she said.

The panel voted to apply a one percent across-the-board cut in what is called “all other” spending by state agencies. That includes meals and travel and miscellaneous office supplies, among other items. But that cut does not apply to many agencies, such as the judicial branch, the legislative branch and independent agencies like the University of Maine System.

In an emergency meeting Friday, legislative leaders voted to provide $1.4 million from the Legislature’s budget for this year to help with the Medicaid budget shortfall.

The committee also “swept” $4 million from the accounts that fund various licensing boards and regulatory agencies in the Department of Professional and Financial Regulation. Those government functions are funded through fees and assessments on banks, insurance companies and various professions, not the state general fund.

“In general, I think the theory behind the work we just did is that we were attempting to reduce government spending in those areas where we have excess balances and apply those to areas with genuine need, “said Rep. Patrick Flood, R-Winthrop, the House co-chairman of the committee.

This is not the first time an appropriations committee has taken funds dedicated for regulating a specific profession or business and used it for other purposes. It has upset those that pay those fees and assessments in the past and they are not expected to be pleased with this diverting of funds.

The panel is leaving many complicated issues such as payments to private nonmedical institutions for the second budget year bill they start work on as soon as the measure to pay the bills for this year is completed.

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