Gov. Janet Mills has released her first budget, after repeatedly promising it would provide “sustainable” funding for the massive expansion of Medicaid without new taxes. Republicans acknowledge that this proposed budget delivers on this funding promise — along with a collection of other campaign promises — but find it lacking in long-term fiscal vision. The proposed spending package as unsustainable, in both the short and long term. We are committed to working in good faith by offering constructive and responsible alternatives, if given the opportunity.
The $8.04 billion budget that the governor has submitted represents an 11.3 percent increase over the current $7.215 billion budget. It spends the budget surplus accumulated under the LePage administration, including transfers from one-time funding sources and relies on overly optimistic future revenue assumptions. This, after the governor herself has warned of a possible future recession.
Mills is making good on her campaign promise to expand Medicaid. She promised to identify a sustainable source for funding, but her budget does not do this. It relies on one-time monies and significantly understates the true cost of expansion down the road — as evidenced by her proposed one-time transfer of $29 million from the MaineCare Stabilization Fund as a Reserve against cost overruns.
Because of this, Mills’ proposal sets up Maine for budget shortfalls and future tax increases if projected revenues fall short and Medicaid enrollment and costs exceed current estimates. Nearly all available funds, both one-time transfers and current revenue projections are relied upon to fund this proposed budget.
The second year of the biennium spends $62.6 million more than is available for that year and the projected balance at the end of the biennium is less than $400,000. These one-time funding sources will not be available in future years, leaving no margin for error if projections turn out to be wrong.
The proposed budget should also worry local towns and property taxpayers. Projected Revenue Sharing to municipalities is greatly reduced to make her budget look balanced on paper. Instead of increasing to the 5 percent in current law, it is only increased an anemic half-percent more than last year’s level of 2 percent. Even if revenue sharing is fully funded, there is no guarantee that new money to towns will actually reduce property taxes.
We all support higher teacher salaries, but the proposed $40,000 minimum teacher salary could be an underfunded mandate that comes back to bite towns and cities in the form of higher taxes. The proposal to include $10 million — to be run through the EPS formula — in fiscal year 21 will likely fall far short of the true cost of adjusting local salary schedules to reflect a higher starting salary — particularly in rural Maine and in “low receiver” school systems. Our initial conversations with local school officials support this conclusion, and include real concerns that this local impact will continue long after the $10 million formula pass-through is gone.
The Mills budget is the first step in what will be a long process leading to a final budget. Republicans find it worrisome that budgets submitted by governors typically increase as they move through the legislative process. New spending requests and bond bills proposed by legislators are also not included in this proposed spending plan.
Republicans are unsure what level of budget involvement we will be given. To meet the governor’s promise of “One Maine,” Republicans need to be part of the solution. It is not clear if Republicans are expected to be the responsible adults in the spending debate. We need to be involved in setting spending priorities for, as we all know, “if everything is a priority, nothing is the priority.”
There are areas in this budget where Republicans believe we can find common ground. Addressing the opioid epidemic, better outreach services for veterans, addressing long wait lists for providing services to disabled adults, providing real property tax relief and responsibly funding Medicaid expansion, are such examples.
Republicans want to ensure our economy continues to grow, benefiting even more individuals, families and businesses. We will oppose a return to the irresponsible spending and borrowing practices that left our bills unpaid, our accounts empty, state employees working without pay, taxpayers financially strapped and an economy in ruins.
Rep. H. Sawin Millett, R-Waterford, a farmer and former educator, represents District 71. His previous service includes three years as Commissioner of the Department of Administrative and Financial Services under Gov. Paul R. LePage.