Under The Dome: Inside The Maine State House 9-27-13

by Pierce Atwood LLP
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Augusta, ME

Under the Dome: Inside the Maine State House provides a high-level overview of recent activity at the Maine State House. If you would like more specific information regarding an item in this newsletter or related to government relations, please contact a member of our Government Relations Practice Group: John Delahanty, Andrea C. Maker, or Avery Day.

Maine’s Hospital Debt Paid Off

Last week, Governor LePage delivered on a campaign promise by paying off the State’s debt to Maine hospitals. More than $490 million was paid to 39 Maine hospitals as the result of legislation enacted this legislative session. This proposal to securitize revenues from the State’s wholesale liquor contract to pay off Maine’s hospital debt was one of the bigger initiatives enacted this year. In recent weeks, bonds were sold to make these payments possible.

While the Governor and other members of his Administration used this opportunity to highlight the fulfillment of a campaign pledge, activists used the events surrounding the announcement of these payments as an opportunity to call for an expansion of Maine’s Medicaid system.

LePage Administration Considering Interesting Economic Development Incentive

The Commissioner of the Department of Economic and Community Development, George Gervais, recently discussed an economic development incentive that the Administration is considering pursuing that would involve making the one Maine county with the slowest economic growth exempt from State taxation. Under this concept, counties would be evaluated by unemployment rate, poverty rate, population change and private sector share of personal income and the county with the lowest ranking would then be exempt from personal income, corporate income and sales taxes in order to boost economic growth.

This concept would need legislative authorization before it could become a reality. Democratic legislative leaders, according to reports in the Maine press, have been cool to this proposal. This idea is very likely to be part of the Legislature’s deliberations during the upcoming session.

Governor Vows No Supplemental Spending Bill Next Session

We are only a few months into the State’s current fiscal year and revenue predictions have already fallen below expectations by a few million dollars. It is not unusual for economic forecasts to be off and for the State to make mid-year corrections to its budget in order to keep its fiscal house in order. This fiscal year may be a bit different, however, as Governor LePage, last week, said he will not propose a supplemental budget for the current fiscal year.

The Governor maintains that since the Legislature refused to adopt the biennial budget he proposed, the Legislature is responsible for any shortfalls over the remainder of the biennium. Should the Governor follow through on his promise not to submit a supplemental budget, the Legislature can craft its own proposal, but it is highly unusual for the Executive Branch to not propose the first version of a budget bill.

Study Groups and Committees Working Throughout the Fall Various study groups and committees have begun to meet to start the process of drafting reports and suggested legislation for next session. In the past two weeks alone, a group charged with examining tax expenditures and identifying $40 million in budget savings, a solid waste task force and a study committee examining health insurance exchanges have all met.

Looking ahead, the Appropriations and Financial Affairs Committee will meet on October 2nd to consider a number of ongoing, budget-related matters. Perhaps, the issue with the largest policy implications on the Committee’s agenda is a report from the Governor’s Office of Policy and Management regarding budget savings during the current biennium. This Office was directed to find $33 million in savings over the next two years as well as identify 100 State positions for possible elimination. This Office will make its report on these initiatives to the Committee on October 2nd and these recommendations have the ability to affect almost any aspect of State government.

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