AUGUSTA — Top officials in Gov. Paul LePage’s administration outlined their plan Monday for offsetting an estimated $65 million shortfall in this year’s state budget.

About $61.7 million of the shortfall is in the Department of Health and Human Services budget, resulting from rising enrollment in MaineCare programs and money owed to the federal government because the state overbilled for certain services, according to administration officials.

The $65 million hole must be filled by the end of the fiscal year June 30. Administration officials presented the plan Monday during a meeting with the Legislature’s Appropriations Committee.

Sawin Millett, commissioner of the Department of Administrative and Financial Services, said that about $14 million will come from savings found in unspent DHHS account balances. Another $9.7 million will come in when the federal government reimburses the state for the administrative costs of running the state Children’s Health Insurance Program, Millett said.

“This has been quite a process within the department to look as comprehensively as possible through all of our accounts to try and self-fund as much of this problem as possible,” said DHHS Commissioner Mary Mayhew.

The MaineCare overbilling, which occurred over a three-year period, accounts for about $30 million of the shortfall.

Mayhew said officials from the U.S. Centers for Medicare and Medicaid Services have agreed to allow the state to repay that money after June 30. Millett said the money will be transferred in early July from the state’s Rainy Day Fund — which currently totals about $36 million.

“We will settle up with the feds with money from the budget stabilization funds,” Millett said.

The rest of the shortfall, about $11 million, will be paid off with funds found within existing programs across state government, officials said.

Delaying the transfer from the Rainy Day Fund will enable state officials to paint a rosier picture of the state’s finances when the administration meets with bond rating agencies in May, Millett said.

“The budget stabilization fund and our overall cash liquidity will be the focus of the ratings agencies when we meet with them,” he said. “So keeping the $36 million intact, I think, is an advantage for us.”

Millett said the administration plans to restore about $25 million to the rainy day fund “should those funds be available when the books finally get closed” June 30. The state recently has been taking in more revenue than forecast, and administration officials hope the trend continues.

Rep. Peggy Rotundo, D-Lewiston, the committee’s top House Democrat, said bumping the $30 million MaineCare payment to next year — as well as a proposal to delay a $5.3 million payment to a company administering DHHS’ new computer billing system — seems “gimmicky.”

“I understand why they want to do that as our administration goes down to talk about our bond rating, but it seems a little disingenuous,” she said.

Sen. Richard Rosen, R-Bucksport, Senate chairman of the committee, said the panel would hold a public session on parts of the proposal — tentatively scheduled for next Monday — and continue from there.

“The governor’s budget puts together a plan of how to be able to utilize (the rainy day fund) and also how to replenish it, so we’ll examine that in the hearing and see whether we are satisfied that they can accomplish that,” he said.

MaineToday Media State House Writer Rebekah Metzler can be contacted at 620-7016 or at: [email protected]