Archive for March 4th, 2014

Weekly Address of Governor Paul LePage: Raiding the State’s Rainy Day Fund has Serious Consequences

Posted on March 4, 2014. Filed under: Uncategorized | Tags: , , |

Note: Earlier today, Governor LePage held a press conference in his cabinet room “to explain his opposition to Democrats raiding $21 million from the State’s Budget Stabilization Fund, commonly referred to as the Rainy Day Fund.”. Here is the full video.

Portland Press Herald is reporting that the Governor inexplicably seemed surprised to learn how overwhelmingly the full legislature rejected his position on revenue sharing, as they passed LD 1762, “An Act Related to the Report of the Tax Expenditure Review Task Force” handily:

    Asked Tuesday why he didn’t veto the municipal aid bill, LePage offered conflicting responses, first saying that he expected Republicans would sustain his veto, then stating later that he didn’t know that Republicans joined Democrats to overwhelmingly support the bill in multiple roll call votes.

    “Frankly, I thought they were playing politics,” he said. “I really thought that they were just playing politics. If I vetoed the bill … it would have been sustained by the Republicans and they would have turned and said our governor doesn’t care about the communities, he doesn’t care about property taxes. I didn’t realize that they’d go to the point of legitimately robbing the (rainy day fund). I thought that they’d find some other way.”

    The bill, L.D. 1762, passed the House 120-17 and the Senate 33-2. The margin of support belied Republican opposition to the bill, with several lawmakers saying that they feared a vote against the bill would be used to portray them as not supporting aid to municipalities and used against them in the upcoming election.

    When LePage was told that a majority of Republicans supported the bill, he said, “I didn’t realize they did, actually. Republicans voted for this, too? Then, frankly, I hold the entire Legislature responsible. If they did (vote for it), they did an irresponsible move.”

Perhaps the governor wasn’t kidding when he quipped in January that, “I have no power when it comes to this legislature.”

*RELATED: Maine Legislature Overwhelmingly Pass LD 1762, Restoring $40M In Municipal Revenue Sharing

Here now is Governor Paul LePage’s weekly address, sent out without embargo.

Audio link here: Raiding the state’s rainy day fund has serious consequences

Raiding the State’s Rainy Day Fund has Serious Consequences

During my career as a businessman, I would never empty a company’s savings account to pay one month’s bills. As Governor, I find the Legislature’s proposal to raid the budget stabilization fund to fill a one-time budget hole both fiscally irresponsible and just plain incompetent. The repercussions will cost Mainers tens of millions of dollars in added interest costs.

lepage sots angry selfHello, this is Governor Paul LePage.

I never imagined Democrats would be so short-sighted and fiscally irresponsible that they would raid the budget stabilization fund and endanger the state’s fiscal status.

This fund is commonly called the rainy day fund. It is a financial reserve that is set aside for emergencies, such unexpected revenue shortfalls or interruptions in normal state operations.

It is not a slush fund for politicians to use when they don’t want to make tough decisions on the budget.

Credit agencies want our state to have a rainy day fund at a minimum of 3 percent of our budget. That would be roughly $180 million. These agencies recommend we have 15 days of cash flow in reserve.

Over the past three years, we have struggled to build it to $60 million. That’s only enough cash to run state operations for 5 days.

Now Democrats have cut our financial reserves by 40 percent and take $21 million from the fund. That would leave 3 days of cash flow to run the state in an emergency.

I have repeatedly warned Democrats that taking $21 million from the rainy day fund would harm our state’s credit rating and increase the costs of borrowing. A downgrade in our credit rating would result in higher interest rates, which could cost tens of millions of dollars. Maine’s taxpayers would have to foot the bill.

For Democrats to put this burden on hard-working Mainers is unconscionable.

That’s why we cannot go the bond market until Democrats replenish the budget stabilization fund to its previous level of $60 million. The decision to sell bonds rests squarely on the actions of Democrats in the Legislature.

We have worked for three-and-a-half years to build up our cash reserves, and we just paid off $490 million in hospital debt. This has greatly improved our state’s financial position. Depleting our already limited financial reserves by robbing the rainy day fund is a big step backwards.

Just as a credit score is of vital importance to the average Mainer, the ratings from credit agencies have very real and very serious consequences for our state.

Democrats do not seem to care about fiscal accountability. They just want to spend every dollar in sight so they can focus on buying votes for the election. Then they can dump their responsibility for balancing the budget on the next Legislature.

Playing politics is one thing. But I cannot stand by and watch as Democrats destroy our state’s credit rating and cash reserves. They may not care if being fiscally irresponsible will have a disastrous effect on our state. I do.

That’s why I will submit a proposal to replenish the state’s budget stabilization fund before we talk about going to the bond market. It’s the right thing to do.

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LePage’s “Fine Young Cannibals”- and Some Food For Thought

Posted on March 4, 2014. Filed under: Uncategorized | Tags: , , , , , , , , , |

Last week on February 24, Maine Governor Paul LePage put forth a press release with an unusual claim- that Maine state agencies were being “cannibalized by welfare spending”, due to Maine’s expansions years ago.

lepage sots angry self

    “Because Maine already expanded welfare a decade ago, Medicaid is now cannibalizing funding from all other state agencies,” said Governor LePage. “That means the state cannot fully pay its 55 percent share of local education costs. It cannot hire more Maine State Troopers or repair National Guard facilities. The state cannot adequately promote fishing and hunting programs or conduct research on our fisheries. It cannot expand job-training opportunities or properly fund programs for environmental emergencies. Everything the State of Maine does is adversely impacted by Medicaid spending. Now liberals want to expand welfare again.”

    “We simply cannot keep throwing money at an inadequate welfare program. The state is not meeting the health care needs of vulnerable Mainers, and adding more people to the welfare rolls will only exacerbate the problem,” Governor LePage said. “Expanding welfare a decade did not increase access or improve the quality of care, nor did it help uninsured Mainers. Now it is threatening all of the other programs and services Mainers expect from their state government.”

    “Our state is facing a fiscal crisis, and we need to examine our spending practices, evaluate the delivery of services and gain control of our welfare system,” said Governor LePage. “Maine’s economic security and future is at stake, and we must make hard choices. My challenge as Governor and our challenge as a state is to find ways to help Maine families prosper, improve the business climate, foster better educational opportunities while still protecting those most in need with limited resources. We cannot do that while Medicaid is consuming an inordinate amount of our finite financial resources.”

The messages were repeat statements of LePage’s February 19 weekly radio address and an earlier address from January 15 with much of the governor’s proof of his claims coming from the faulty Alexander Report, now repackaged as “The Feasibility of Medicaid Expansion under the Affordable Care Act” (PDF warning).

Senator Roger Katz (R-Kennebec)

Senator Roger Katz (R-Kennebec)

What had started the Governor’s discussion on refusing to expand Medicaid (despite numerous reports of how beneficial such expansion would be for Maine and support from the Maine Hospital Association) were plans by Democratic leaders to introduce of a pair of Medicaid expansion bills:

  • LD 1578, “An Act To Increase Health Security by Expanding Federally Funded Health Care for Maine People” sponsored by Speaker of the House Mark Eves (D-N Berwick)
  • LD 1640, “An Act To Enhance the Stability and Predictability of Health Care Costs for Returning Veterans and Others by Addressing the Issues Associated with Hospital Charity Care and Bad Debt” Senate Majority Leader Troy Jackson (D-Aroostook)’s bill

To date, neither bill has yet been voted out of HHS committee.

But the final straw? Learning that despite all of his best efforts, TWO MEMBERS OF HIS OWN REPUBLICAN CAUCUS (Senators Roger Katz and Tom Saviello) WERE GOING TO OFFER UP A THIRD MEDICAID EXPANSION BILL!!

So, not satisfied that his words were getting through to the public or legislators, the LePage administration decided to go further- and employ a desperate sort of “throw everything against the wall until something sticks” technique, by emailing various state agencies and demanding the communications directors supply public statements in regard to how expansion would adversely affect their budgets.

The results see below were sent out as part of a February 24 press release.

But apparently that STILL did not have the desired effect and impact- so on February 26, DHHS Commissioner Mary Mayhew hosted a large media event in Governor LePage’s cabinet room with a variety of department heads dutifully taking their turns and standing to speak to the gathered Maine press about how their budgets were being “cannibalized” by the monies going into DHHS, as well as a new LePage assertion that “Medicaid Expansion is Bad for the Environment”.

    Media Advisory: Medicaid Expansion is Bad for the Environment

    DSC_0027Medicaid expansion threatens programs, positions and services in all state departments. During the past three years, state government has eliminated and reduced funding in every state agency to pay for welfare costs.

    As Medicaid spending continues to consume the General Fund, there is less and less revenue for education, law enforcement, economic development and programs to protect our natural resources.

    On Wednesday, Feb. 26, the LePage Administration will hold a news conference with commissioners of natural resources agencies to focus on programs and services that will be impacted further should Medicaid expansion pass.

    media“Because Maine already expanded welfare a decade ago, Medicaid is now cannibalizing funding from all other state agencies,” said Governor LePage. “That means the state cannot adequately promote fishing and hunting programs or conduct research on our fisheries. It cannot expand job-training opportunities or properly fund programs for environmental emergencies. Everything the State of Maine does is adversely impacted by Medicaid spending. Now liberals want to expand welfare again.”

    In the 13 years since Maine expanded welfare, Medicaid enrollment has more than doubled, and its cost has grown by $1.3 billion. Medicaid now takes 25 percent of all General Fund revenue.

    More than $2 billion will be spent on Maine’s Medicaid program over the next two years. Even without expansion, Medicaid is projected to total more than 35 percent of the General Fund.

While the room was packed with currently serving GOP legislators, Republican legislative candidates, volunteers with signs held up opposing Medicaid expansion, bunches of Maine media and those speaking, Governor Paul LePage was nowhere to be seen and did not attend the press conference. Nor was his absence explained by staff.

Here are clips from that event.

A reminder: Mary Mayhew has time and time again, over the course of the three years since she took over the reins after the March 2011 abrupt firing of for Maine CDC Director then MaineCare head Dr. Dora Mills, never been able to get solid numbers on her department’s fiscal needs, outbound spending costs, over/ under payments, let alone satisfactory explanations of countless “IT issues”/ documented complaints to media or the Appropriations and Financial Affairs Committee in the Legislature.

So that the crux of the LePage administration’s argument being that “Medicaid expansion will cause DHHS’ budgetary needs to grow to the point that other state agencies to suffer” seems to be either utterly oblivious of Mayhew’s horrendous mismanagement at best or completely disingenuous in ignoring the demonstrated and documented missteps (arguably the true cause of the “cannibalism”) at worst.

Skipping past the third option that the “unfunded $400 million tax cuts to the wealthy” chickens have come home to roost…

The media circus didn’t stop Senator Roger Katz (R-Kennebec), who went before the HHS Committee a few hours later and presented the bill that he and fellow Sen. Tom Saviello (R-Franklin) sponsored, LD 1487, “An Act To Implement Managed Care in the MaineCare Program”.

Videos here of the public hearing on LD 1487:

The two Republican senators, in preparation of the bill’s introduction, had spoken previously with Portland Press Herald at length and in detail about LD 1487:

    Katz and Saviello stopped by the newsroom this week and laid out a clear, compelling and perfectly rational argument behind their proposal:

      Senator Tom Saviello (R-Franklin)

      Senator Tom Saviello (R-Franklin)

      It would expand MaineCare, at long last, to those at or below 133 percent of the federal poverty line. What’s more, it would do so through a new, managed-care model run not by the state, but by private-sector providers that would compete for the opportunity to deliver health care, at a set fee per patient, to Maine’s neediest population.

    • It would “sunset” automatically in three years, when the 100 percent federal funding begins dropping incrementally to 90 percent. And if the feds reneged on their 100-percent promise before then, the plug would get pulled immediately.
    • It would require a nonpartisan analysis to help future lawmakers determine whether the expansion achieved its goals (including a 5 percent reduction in health delivery costs) over those three years and, more importantly, whether the program is worth preserving beyond the three-year cutoff.
    • It would eliminate those abhorrent waiting lists for developmentally disabled adults who need non-health services (they already receive MaineCare) to live fulfilling lives.

Now, here’s where things get a little odd.

Look at that earlier Governor’s Cabinet press conference Q&A clip again, paying particular attention to the 1:42 mark.

Mayhew is interrupted mid-explanation to WCSH’s Don Carrigan by an unseen woman speaking (to Mary’s right) and prompting the commissioner with a talking point. And Mayhew took it in stride, as if it was not a rather egregious breech to interrupt an administration official while on camera during a press conference.

Cumberland County GOP members instructed how to be props for LePage admin anti-Medicaid expansion press conference

Cumberland County GOP members instructed how to be props for LePage admin anti-Medicaid expansion press conference

Who was that woman? Well, let’s back up here, by about 2 hours- because between 9-11am that same morning down in the State House Welcome Center, a rather large group of supposed volunteers were assembled for a “legislative lobbying training session”.

In reality, the group were a bunch of well organized members of the Cumberland County Republicans, including chair/ state committee member Eric Lusk, vice chair Bill Gardner, former state senate candidates Michael Coleman, Eric Brakey (who also heads Maine’s Defender of Liberty PAC), Kristen Martin (who was the woman who later jumped in while Commissioner Mayhew was speaking at the press conference), former House GOP press officer Vic Bernadelli and others.

A few interesting moments on the clip:

    1. At 8:50 after summing up what had already been discussed including lobbying instructions, Lusk asked those who can stay to be up at the Governor’s office at 12:15, “there may be something of a gathering”, “please grab some signs”.

    2. At the 9:40 mark, Gardner discusses the placards as needing (paraphrase) “to get back the signs, they belong to Susan Dench of Informed Women’s Network; she takes them all over the place” (to events).

    3. Martin from 9:56 discusses reimbursements, as well as opines that the poor can get free care at the hospitals, with no bills to be paid.

    4. At the 10:45 mark Lusk is asked by an audience member why the younger citizens are targeted by the expansion and admits that the most cynical answer is that Democrats are trying to buy votes.

pacman thumbHang on a minute- because the “cannibalism” LePage meme first started out as a 1980s video game reference… PAC-MAN!

In late January, another anti-expansion group met in a similar gathering in the Welcome Center. Former Maine Legislator now head of Americans For Prosperity Maine Carol Weston held a press conference, speaking in opposition to Medicaid expansion and giving examples of how expansion would create financial challenges for local municipalities:

    Opponents of Maine’s controversial Medicaid expansion proposal say expanding the low income health insurance program will take away critical funds from schools and other state programs. The group called Americans a For Prosperity Maine said passage of the law will lead to what it called a “Medicaid Pac-Man” that will gobble up money needed for other essential services.

Carol Weston, Maine State Director of Americans for Prosperity, introduces Gov. Paul R. LePage at Hall of Flags rally in June 2013 (photo courtesy of The Maine Wire)

Carol Weston, Maine State Director of Americans for Prosperity, introduces Gov. Paul R. LePage at Hall of Flags rally in June 2013 (photo courtesy of The Maine Wire)

Notice how none of the speakers in the above clip mention how their local communities were at risk or would suffer adverse affects due to Governor LePage’s zero revenue sharing budget from last year.

It should be noted that the Legislature overwhelmingly passed LD 1762, restoring $40M in revenue sharing to Maine’s towns and the bill silently went into law unsigned last week.

Yet the same imagery of “cannibalism”, albeit via a Medicaid-fueled scribbled 1980’s PAC-Man hand drawing by Weston herself, was employed.

Coincidence that a similar AFP movement occurred in Virginia, despite that state’s hospitals pushing for expansion?


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