January 12, 2013

LePage budget proposal: Blueprint or massive tax shift?

Gov. LePage’s $6.2 billion two-year budget proposal draws heavy fire from Democrats; the House GOP leader says it calls for ‘right-sized government.’

By Steve Mistler smistler@pressherald.com
State House Bureau

(Continued from page 1)

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Education Commissioner Steve Bowen, left, Sawin Millett, commissioner of administrative and financial services, listen as Department of Health and Human Services Commissioner Mary Mayhew speaks during a news conference on Friday in the Cabinet Room of the State House in Augusta.

Staff photo by Joe Phelan

Justin Alfond
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State Sen. Justin Alfond, D-Portland, questions spending cuts outlined by the Appropriations Committee, Friday, Jan. 11, 2013, at the State House in Augusta, Maine. The LePage administration on Friday presented a proposed $6.3 billion budget that eliminates more than 200 state positions, seeks to share the state's teacher retirement costs with local school districts and makes changes in the state welfare system to address an expected $40 million reduction in federal matches.


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Related Documents

Governor LePage's 2014-2015 biennial budget briefing
An executive summary of the Governor's budget proposal.


Gov. LePage's budget message (pre-recorded)

Budget press conference audio

On the web:

State of Maine: Governor LePage's Proposed Biennial Budget for 2014-2015


Highlights of Gov. Paul LePage's $6.2 billion, two-year budget proposal:

  • A two-year suspension of municipal revenue sharing to towns and cities, saving about $200 million.
  • Elimination of more than 200 positions in state government.
  • Reduction of the circuit breaker property-tax relief program, saving $73.4 million.
  • Reduction of state expenditures on teachers' retirement by making school districts contribute to the cost, saving $14 million.
  • Flat funding of aid to public school districts.
  • Reduction in spending on welfare and social programs, including the elimination of the state's drug care program for the elderly, saving nearly $52 million.

Despite deep cuts in welfare programs, the budget would increase funding for mental health services by $2 million.

Health and Human Services Commissioner Mary Mayhew said the administration understands the impact of the human services cuts but they are necessary to sustain the programs.

Democrats weren't buying it.

"These are the governor's priorities," said Senate President Justin Alfond, D-Portland. "These are his values. This is one of the biggest tax increases the state has seen in a very long time and it's shifted to our municipalities, on our businesses, on poor people and the middle class. We don't think that's the way to build the economy."

LePage said the budget reflects a crisis caused by out-of-control welfare growth and previous state spending.

"These are challenging and difficult times," LePage said in a statement. "Our state is facing an economic crisis, and we need to examine our spending practices, evaluate our delivery of services and gain control of our welfare system."

LePage said in his statement that the suspension of revenue sharing "is a reflection of growth in welfare in Maine."

Democrats and advocacy groups for low-income residents noted that funding for MaineCare has been mostly flat since 2006. MaineCare is the state's version of Medicaid, a federal and state program that provides health care coverage to low-income and older residents.

MaineCare caseloads have increased since 2002, but advocates say the growth is linked to the recession and to enrolling nearly 20,000 seniors and people with disabilities who receive help with prescription drugs -- programs that receive federal matching funds.

Sara Gagne Holmes, executive director of Maine Equal Justice Partners, an advocacy group for low-income Mainers, said the cuts would affect more than the poor and elderly.

"The governor and the administration have made choices, and those choices have led to the budget deficit," she said. "And now he's using that deficit to justify significant cuts to a majority of Maine people that will result in significant harm."

The budget would effectively flat-fund education. The governor increased education funding by $63 million in his previous two-year budget, which ends June 30.

Education Commissioner Steve Bowen said General Purpose Aid to schools would stay around $900 million through fiscal years 2013-14 and 2014-15.

The administration would add $16 million in incentives for educational efficiency, to establish accountability and boost the Jobs for Maine's Graduates Program.

Bowen said he feels lucky to be spared some of the difficult cuts that target other state programs.

Democrats countered that the so-called tax shift to communities would affect education in public school districts.

House Majority Leader Rep. Seth Berry, D-Bowdoinham, said the tax shift is "unacceptable" and nearly equals the cost of the tax cuts enacted in 2011.

The tax cuts received two-thirds support from the Legislature -- a point frequently raised by Republicans when Democrats say that the package blew a hole in the next two-year budget.

Democrats say they agreed to the tax cuts at the time to save social services programs.

Democrats campaigned against the tax cuts last fall, saying they primarily benefit wealthy Mainers.

Now in the majority, Democratic lawmakers are under pressure to repeal or delay the cuts for top earners.

The Maine People's Alliance, a progressive group that helped Democrats win back the Legislature, called the budget "unconscionable" and threatened electoral consequences for Democratic lawmakers who vote for it without repealing the tax cut for wealthy Mainers.

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Additional Photos

click image to enlarge

Education Commissioner Steve Bowen answers questions during a news conference on Friday January 11, 2013 in the Cabinet Room of the State House in Augusta.

Staff photo by Joe Phelan

click image to enlarge

Sawin Millett, the commissioner of administrative and financial services, speaks during a news conference on Friday January 11, 2013 in the Cabinet Room of the State House in Augusta.

Staff photo by Joe Phelan

click image to enlarge

Gov. Paul LePage's budget officer Sawin Millett, center, briefs members of the news media on the governor's $6.2 billion budget proposal. DHHS commissioner Mary Mayhew and education chief Steve Bowen are on the right.

Photo by Steve Mistler / Staff Writer

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