Lawmakers take up budget challenge
Lawmakers are taking on this year's toughest task: making up a nearly $100 million budget gap over the next year and a half. The state already decided not to put $40 million of its budget shortfall on the backs of towns and cities through a cut to municipal revenue sharing, a measure Gov. Paul LePage allowed to pass into law without his signature. That law's certainty, however, has raised other questions related to the state's checkbook.
Rainy day
LePage said he won't sign off on new borrowing until the state's rainy day fund, from which lawmakers agreed to take $21 million to curb revenue sharing cuts, reaches $60 million. State Treasurer Neria Douglass said the state has already spent nearly $52 million for bond-approved projects, an amount she expected would be replenished from the sale of state bonds later this year, according to an email exchange obtained by Mainebiz. Without the governor's signature, nearly $100 million in bond projects could not move ahead. LePage told reporters he was working on a plan to restore $21 million to the state's rainy day fund.
How to appropriate?
The Legislature's appropriations committee is crafting a supplemental budget after LePage declined to participate because lawmakers rejected his proposed two-year budget plan last session. The Sun Journal reported the committee needs to close a budget gap of about $49.3 million in the current fiscal year and $50.3 million for 2015. Suggestions before the committee included removing sales-tax exemptions for hospitals and private nonprofit colleges, raising the state's cigarette tax and extending a half-cent sales tax increase to certain service-sector businesses.
Meanwhile…
While budgetary matters take center stage, the issue of Medicaid expansion looms. A group of Republican lawmakers has drafted a compromise bill to expand Medicaid, hoping they can amass enough support on their side of the aisle, without losing Democratic support, to withstand a veto from the governor, who has vetoed two previous expansion efforts. The primary component of the bill put forward by Sen. Roger Katz of Augusta and Sen. Thomas Saviello of Wilton, both Republicans, would have the state implement managed care and contract with organizations to set up provider networks and compete for Medicaid recipients statewide.
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