Democrats: LePage reveals new $100 million hole in DHHS budget

Senate Majority Leader Troy Jackson, D-Allagash (left), and House Majority Leader Seth Berry, D-Bowdoinham, discuss the state's budget challenges during a news conference on Friday, Jan. 10, 2014, in the State House.
Christopher Cousins
Senate Majority Leader Troy Jackson, D-Allagash (left), and House Majority Leader Seth Berry, D-Bowdoinham, discuss the state's budget challenges during a news conference on Friday, Jan. 10, 2014, in the State House. Buy Photo
Posted Jan. 10, 2014, at 1:09 p.m.
Last modified Jan. 10, 2014, at 8:12 p.m.
Gov. Paul LePage
Kevin Bennett
Gov. Paul LePage

AUGUSTA, Maine — Democratic leaders said Friday that the state’s financial situation is more dire than they had previously thought because of a $100 million shortfall in the Department of Health and Human Services budget.

Adrienne Bennett, press secretary for Republican Gov. Paul LePage, confirmed Friday afternoon that a substantial budget shortfall exists across state government, but she declined to offer specifics. She said the administration is planning to provide details about the state’s fiscal situation to legislative leaders on Monday.

Democratic lawmakers and the LePage administration both used the news to promote their agendas for the legislative session that began Wednesday.

The administration called it another reason to rebuff the Democrats’ push to expand Medicaid in Maine as allowed by the federal Affordable Care Act.

“The majority of the shortfall is attributable to the Medicaid program,” said Bennett. “It underscores why we cannot be looking at Medicaid expansion right now.”

House Majority Leader Seth Berry, D-Bowdoinham, and Senate Majority Leader Troy Jackson, D-Allagash, called a news conference Friday to urge LePage to help the Legislature craft a supplemental budget to address the shortfall.

LePage said late last year that his administration will not write a supplemental budget bill because he laid out his ideas and priorities in his biennial budget proposal last year. Many of LePage’s recommendations were not adopted by the Legislature, which balanced the budget with temporary increases in the sales, meals and lodging taxes. That caused LePage to veto the rewritten budget bill, but his veto was overridden.

“Year after year, since Maine became a state, [supplemental budgets] have been done by the Legislature and the governor working together. The governor proposes a budget and the Legislature passes a budget,” said Berry. “This year the governor is refusing to do his part.”

Bennett said LePage is still not interested in taking the lead on the supplemental budget but told legislative leaders on Thursday, including Senate President Justin Alfond, D-Portland, and House Speaker Mark Eves, D-North Berwick, that the administration will freely share information and make Finance Commissioner Sawin Millett fully available.

“We will continue to work with them,” said Bennett.

House Minority Leader Kenneth Fredette, R-Newport, said in a prepared statement Friday afternoon that he also heard from LePage on Thursday about the $100 million shortfall.

“House Republicans are committed to working with the administration and our Democratic colleagues in good faith to craft a solution to this problem,” said Fredette. “However, we will not support any tax increases to cover yet another welfare-induced budget shortfall. This cost overrun is due largely to past Medicaid expansions and it should serve as a warning to Democrats against moving forward with their $800 million proposal to expand the program even further under Obamacare.”

But Democrats said the administration is to blame for many of the problems in DHHS, including most recently losing $20 million in federal funding for Riverview Psychiatric Center, signing a $28 million contract for MaineCare transportation services that resulted in thousands of missed rides, and awarding a $1 million no-bid contract to a consultant to study Medicaid expansion in Maine. The Democrats also blamed the LePage administration for $4.8 million in overpayments to 70,000 people in the Supplemental Nutrition Assistance Program, as well as millions of dollars they attributed to accounting and computer errors.

“The LePage administration has squandered and lost taxpayer dollars because of mismanagement, no management and incompetence,” said Berry. “They’ve covered their tracks by withholding information from key lawmakers and have even gone so far as to shred documents.”

Jackson said LePage’s refusal to help with the budget is further evidence of flawed leadership.

“Whether the deficit is because of mismanagement, incompetence or a simple unwillingness to offer solutions, we still have a hole to fill at DHHS,” said Jackson. “Gov. LePage’s refusal to solve a budget problem is not leadership of any kind. Gov. LePage fashions himself as a businessman but what CEO would have a $100 million shortfall and just sit on his hands? It is time for him to put together a supplemental budget. It’s what every other governor has done and it’s what he should do.”

Lawmakers are keen to resolve the budget situation as early as possible because the earlier the solutions are enacted, the longer they have to save money. Also of concern is language in the biennial budget that forces the Legislature to find $40 million in savings through changes to the state’s tax code. If they don’t, municipal revenue sharing cuts proposed by LePage last year, which were softened by the Legislature, will be revived. Several lawmakers have said they don’t want to cause uncertainty for municipalities across Maine, many of which will be crafting their yearly budgets over the next several weeks.

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