EDITORIALS

By LePage’s logic, his own tax cuts cannibalize Maine’s budget

Gov. Paul LePage speaks with reporters from his office in the State House on Thursday, Dec. 19.
Gov. Paul LePage speaks with reporters from his office in the State House on Thursday, Dec. 19. Buy Photo
Posted Feb. 16, 2014, at 9:04 a.m.

Fill in the blank: ________ is cannibalizing Maine’s state budget.

Gov. Paul LePage’s office on Thursday issued a long list of state budget items that have gone underfunded in recent years. His contention? The underfunding is a direct result of a ballooning budget for Medicaid.

It’s a line of attack that’s gaining traction with the LePage administration and Republican allies in the continuing debate over whether Maine should expand Medicaid. As the logic goes, Medicaid is already cannibalizing Maine’s state budget, so why would the state intentionally expand it to 70,000 more people?

The administration’s seven-page list explains, in 2,700 words, what budget items have been deprived of proper funding because of a growing Medicaid program. For some agencies, the catalog of items reads like a wish list detailing what they would do with additional state funds.

“Medicaid is consuming the general fund,” the document states.

But by the administration’s logic, education is also consuming the general fund and preventing state government from spending money on other priorities. After all, it’s a major expenditure for state government, and it’s grown over time. The state spent more on public schools in 2013 than it did in 2006 — by about 7 percent. Over the same seven-year span, state general fund spending on Medicaid dropped 4 percent.

However, the most accurate moniker for the administration’s seven-page list of neglected priorities would be: Tax cuts consume the general fund.

The income tax cuts passed by LePage and a Republican-led Legislature in 2011 are expected to deprive state coffers of about $200 million in revenue annually, according to the LePage administration’s own projections.

In the absence of any significant structural reforms, LePage relied on a combination of cuts — primarily to municipal revenue sharing and other property tax relief programs — in order to make his lower-revenue budget math work. With $200 million more in revenue annually, which items could LePage check off from his seven-page list?

There are numerous state programs and initiatives on the list that could benefit from more funding and help more of the state’s residents with additional resources. But the list also contains some logical leaps. The administration, for example, says the state has made transportation infrastructure a lower priority as spending on human services, notably Medicaid, has grown. The Maine Department of Transportation, however, receives none of its funding from the state general fund.

The list also points out that, with $2 million more in state money for National Guard facility maintenance, the state could draw down a 50-75 percent federal match. If the idea is to maximize federal resources for the state, expanding Medicaid is by far the better deal: The federal government will cover newly eligible recipients at 100 percent until 2017 and ratchet down to 90 percent funding in 2020.

For LePage, the Medicaid expansion debate is a black-and-white one about priorities that can’t even address the real prospect that providing 70,000 people with health coverage would benefit the state in the long term (not only those covered by Medicaid, but those — including state workers — whose private insurance premiums wouldn’t have to absorb the cost of uncompensated care) and even save the general fund money.

By LePage’s logic, Maine can either expand Medicaid or provide services for the elderly and disabled — but not both. Maine can either expand Medicaid or fund the range of state services outlined on the seven-page list.

If it’s a question of priorities, LePage has made his clear. He would prefer to keep income tax cuts of questionable benefit in place rather than fund the state services he says are underfunded. As he explained in his State of the State address, he would prefer to cut state spending and taxes by another $100 million. And he would prefer to spend $1 million in taxpayer money to hire a consultant whose only effective function is to shape the anti-Medicaid expansion narrative LePage is now employing in full.

LePage has paraded out a list of underfunded state budget priorities. We would be surprised if that list survived beyond the Medicaid expansion debate and actually had the effect of shaping any of LePage’s policy priorities.

 

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