Democrats approve LePage’s rainy day proposal but caveats anger Republicans

Posted March 14, 2014, at 6:30 p.m.
Gov. Paul LePage
Kevin Bennett
Gov. Paul LePage Buy Photo

AUGUSTA, Maine — Gov. Paul LePage’s call for quick action on his bill to restore $21 million to the state’s rainy day fund was granted Friday afternoon by the Legislature’s budget committee, but only after Democrats added an amendment that calls for more than $17 million in additional spending.

The result of the amendment was an 8-5 party-line vote with all of the Republicans on the committee in opposition. House Minority Leader Ken Fredette, R-Newport, said another result is that LePage will likely veto the bill.

The Democrats’ amendment is the latest chapter in a game of one-upmanship that has gone on for weeks between LePage and the Legislature around the issue of the rainy day fund. After lawmakers enacted a revenue-sharing bill last month that would use $21 million from the rainy day fund, LePage said he would withhold the authorization of voter-approved bonds until the balance in the rainy day fund is restored to $60 million. That’s about where the balance stood before enactment of the revenue-sharing bill. LePage let that bill, which restored $40 million in municipal revenue sharing that was cut in the current biennial budget, go into law without his signature. But he immediately criticized it, and Democratic leaders for supporting it.

Earlier this week, arguing that depleting the rainy day fund would hurt the state’s credit rating and cost the state millions of dollars in additional finance charges when it borrows money, LePage presented LD 1807, which proposed to restore the $21 million with excess funds from unanticipated savings in a state employee retiree health insurance account and money left over from the Department of Education’s fiscal year 2012-13 budget.

Democrats on the Appropriations Committee responded Friday by adding the $17 million amendment to LePage’s bill. The amendment includes some 14 spending initiatives including $9.6 million for local education; $200,000 for a transportation program at the Maine Educational Center for the Deaf and Hard of Hearing; $4.5 million in merit and longevity pay increases for state employees; and the restoration of several cuts proposed in the administration’s so-called Rosen report, which identified approximately $34 million in money-saving initiatives.

To pay for the initiatives, the Democratic amendment proposes, among other things, taking $5.7 million in surplus funds from the Dirigo Health program; repealing the $2.65 million Super R&D tax credit; and cutting benefits for new businesses in the state’s Pine Tree Development Zone program by half.

Republicans on the Appropriations Committee said they wouldn’t support the amendment.

“This belongs in our work on the [supplemental] budget and not attached to a bill. … I can’t support it,” said Rep. Kathleen Chase, R-Wells, the committee’s ranking Republican.

Sen. Patrick Flood, R-Winthrop, agreed and said he might be more willing to support the bill if it didn’t deal so heavily with the Rosen report.

“I can’t support this exactly as it’s proposed but I certainly understand why you brought it forward,” he said.

Democrats said they viewed their amendment as an attempt to give the governor what he wants through compromise.

“We have given the governor everything he wanted in his bill,” said Rep. Peggy Rotundo, D-Lewiston. “We are interested in a compromise and this is our attempt to do that.”

Sen. Dawn Hill, D-Cape Neddick, said that Democrats are as interested as LePage is in building up the rainy day fund, also known as the budget stabilization fund, which is why they put a mechanism to do that in the revenue-sharing bill.

“I appreciate that the governor brought this forward in good faith because of the budget stabilization fund,” said Hill. “I do agree that it’s great that we continue to build that fund up.”

Fredette, who sponsored LD 1807 for the governor, said the Democrats’ amendment has likely doomed the bill’s success.

“We’ve met with the governor’s staff and we are quite certain the governor will veto this bill,” said Fredette. “I believe that we could sustain the veto on the House floor.”

“I think the governor came forward with a good-faith effort to solve this problem and release the bonds,” he added.

The LePage administration did not respond to a request for comment Friday afternoon.

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