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Paul Davis

Governor Baldacci's Budget Fiasco
By Senator Paul Davis and Representative Joe Bruno
Nov 24, 2003 - 5:01:00 PM

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Governor Baldacci's most recent $113 million proposed budget fix is another example of this administration's fiscally unsound and shortsighted thinking. Here's why:

Governor Baldacci's budget solution is fiscally unsound as it deals with only one year of a two-year (plus) Medicaid spending problem. It relies on over $105 million in one-time money. This includes almost $67 million in federal relief money from this year's Bush tax cut. In other words, over half of his proposed solution is using money not available next fiscal year, beginning just seven months from now. Clearly, Governor Baldacci is hoping for another Bush tax cut next year to bail him out again.

Governor Baldacci's Medicaid reductions include over $7 million in cuts to Maine healthcare providers. Earlier this year, this Legislature stopped Governor Baldacci's attempt to shut down Maine's rural hospitals as part of his Dirigo Health proposal. His latest tact seems to be to slowly bankrupt providers by cutting Medicaid reimbursement at the same time he is ballooning their Medicaid patient caseloads.

Even in admitting to the $113 million debacle for this year, Governor Baldacci ignores the reality that Medicaid enrollment is continuing to grow at 2% a month. His latest proposal assumes Medicaid spending remains constant for the remainder of the year. Such wistful assumptions ignore reality.

State law, passed by Republicans and Democrats, requires the Department of Human Services to manage Medicaid enrollment of the parent and childless adult expansions to within budgeted resources. To date, DHS has not done this. Medicaid enrollment has ballooned 33% in the last 24 months. Today, one in five Mainers is on Medicaid. He should defer the 78,000 person Medicaid expansion scheduled to begin July 2004, which will result in 25% of all Mainers being on Medicaid.  We need to take control of Medicaid before it Pac-Mans the rest of Maine's budget, including education and transportation.

Here in Maine we write state budgets on a two-year cycle. Yet, Governor Baldacci's proposal only deals with the current fiscal year rather than fixing the entire two-year $200+ million problem. Since Governor Baldacci wrote this original two-year budget, he should deal with the whole problem, be forthright with Maine people and present this Legislature with a two-year solution. Republicans warned the Governor that his budget would not stand up because he didn't make the tough choices. Now it is time to face up to reality.

In conclusion, this latest budget proposal shows the real impact of poor fiscal management. If DHS had better managed its billion-dollar Medicaid program and did not have this $200+ million shortfall, this Legislature could have the money necessary to meet its 55% commitment to fund local education.

It's all about priorities.

Paul Davis (R-Sangerville) is the Senate Republican Leader. Joe Bruno (R-Raymond) is the House Republican Leader.

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