May 11, 2012

Republicans renew push for MaineCare cuts

They want to save millions by setting benefits at the level used in many other states, dropping 21,500 people.

By Susan M. Cover
State House Bureau

AUGUSTA - Republicans are proposing state budget cuts that would eliminate MaineCare for more than 21,000 people, end prescription drug benefits for about 1,500 elderly Mainers and reduce state funding for Head Start and other programs.

click image to enlarge

GOP leaders Senate President Kevin Raye, left, and Speaker of the House Robert Nutting announce a plan to close an $83 million gap at the Department of Health and Human Services through June 2013.

Joe Phelan/Kennebec Journal


Among other things, the budget endorsed Thursday by the eight Republican members of the Appropriations Committee would:

Reduce the number of low-income parents who receive MaineCare. The cut would affect an estimated 14,500 people.

Eliminate MaineCare coverage for all 19- and 20-year-olds -- about 7,000 people. The state needs federal permission to make the cut. Republicans note that Maine is one of only 15 states that provide such coverage.

Reduce funding to two programs that help senior citizens pay for medications. About 1,500 Mainers would lose coverage, with people whose annual income exceeds $19,000 becoming ineligible. That change also would require federal permission.

Cut $2 million in state funding to Head Start, which would continue to receive more than $45 million in other state and federal funds. Democrats asked how many children will be cut from the program because of the cut. Republicans said they hope that administrative costs, not services to children, would be reduced. Head Start officials said about 200 children would lose services.

-- From staff reports

Republican and Democratic legislators parted ways Thursday on a budget that highlights the stark philosophical differences between the parties and is raising tension in an election year.

Democrats say Republicans are underestimating the extent of the proposed cuts, based on estimates they have from advocates. Republicans say agencies that receive state funds can cut administrative costs, rather than hurting children and elderly Mainers who benefit from the programs.

Republican leaders set the stage for the party-line vote by the Appropriations Committee by saying at a news conference Thursday morning that cuts to MaineCare are needed to bring Maine more in line with what other states spend.

"We are here because previous legislatures and governors have presided over an explosive, irresponsible and unaffordable expansion of MaineCare to tens of thousands of people who would not qualify for Medicaid coverage in other states," said Senate President Kevin Raye, R-Perry.

The cuts are part of an attempt to close an $83 million funding shortfall in the Department of Health and Human Services through June 30, 2013. Lawmakers learned last week that state revenues are up about $50 million over previous projections, leading Democrats to ask why Republicans are still pushing for significant cuts.

"Where's the crisis?" asked Sen. Dawn Hill, D-York. "Why aren't we looking at helping these people who need help?"

In response, Sen. Roger Katz, R-Augusta, said the state cannot continue to fund a MaineCare program that has been expanded throughout the years beyond what the state can afford.

"We can't be all things to all people," he said. "Increasingly, the MaineCare budget is taking up more and more of our General Fund revenue. It is preventing us from making investments that we need to make."

Thursday's 8-4 vote marked the first time that the Appropriations Committee, which has been meeting for 17 months, has broken along party lines on a budget.

Republicans in the House and Senate are expected to pass the budget with little or no Democratic support when the Legislature reconvenes Tuesday.

Gov. Paul LePage is happy with most of the budget, including a promise to repay more money that the state owes to hospitals, said his spokeswoman, Adrienne Bennett.

"We're in a positive place right now," she said. "We're encouraged by what we're seeing. The Republicans have stepped up and made the types of structural changes the governor wants to see."

The budget proposal also includes tax cuts that legislators set aside earlier this year. It proposes to:

Increase the amount of pension income that would be tax-exempt, from $6,000 to $10,000 a year.

Give an income tax exemption to active-duty military personnel for work outside the state.

Provide a sales tax exemption for commercial wood harvesting, and commercial greenhouse and nursery products.

All of the tax cuts would start in fiscal year 2013-14.

Democrats asked what costs will be passed on to future legislators if the tax cuts are approved. Republicans said they are counting on a projected revenue increase in future years to more than cover the cost of the tax cuts.

For example, revenues are projected to increase by nearly $27 million in fiscal year 2014-15, and the cost of the pension tax cut that year would be about $21 million, said Rep. Kathleen Chase, R-Wells.

(Continued on page 2)

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