Democrats Statement on the Governor's Budget Proposal
Democrats expressed strong concerns that Governor Paul LePage's two-year budget, released Friday, unfairly burdens the middle class, small businesses, communities, elderly and the poor.
The governor's budget proposal will eliminate state funds for programs that help the elderly pay for medicine, gut property tax relief, and cut state funding to cities and towns, hurting thousands of Maine families and stifling the state's weak economy.
"We need a balanced and responsible budget that won't undercut our state's economy or harm our effort to grow the middle class," said Senate President Justin Alfond, D-Portland. "This budget will raise taxes on the middle class, small businesses, and the poor. Maine needs a budget that strengthens our towns and will get our economy moving."
In 2011, Maine was the only state in New England where the economy shrank. It is one of three states in the nation to have revenues fall below projections this year.
The governor's budget proposal cuts more than $400 million in funding for cities and towns, property tax reductions, and educational expenses for local districts.
"This budget will only put more pressure on our communities," said Speaker Mark Eves, D-North Berwick.
Alfond added, "This budget will result in property tax hikes for Maine families."
LePage's budget also eliminates funding for the Drugs for the Elderly program, cutting nearly $40 million over three years.
"The governor is prioritizing tax cuts for the wealthy over medicine for our elderly," Eves said.
Tax cuts that largely benefit the wealthy contributed to significant portion of the shortfall, accounting for over $400 million, or nearly 45 percent, of the structural budget gap.
Democrats hope to work with Republican lawmakers to craft a more balanced and responsible budget.
The Appropriations and Financial Affairs Committee will begin reviewing the Governor's budget later this month.
"This budget is a reflection of the governor's priorities," said Senate Chair Dawn Hill, D-York. "While we may not share the same priorities for the budget, we are all committed to crafting a balanced, responsible budget in a fair and transparent manner."
House Chair Peggy Rotundo, D-Lewiston, said Maine people can expect a careful and thorough review of the budget, with ample opportunity to weigh in.
We will be reviewing all proposals and weighing our options," Rotundo said. "There will be many opportunities for all members of the committee, and the public, to ask questions about the impact of the governor's budget."
Budget Myths and Facts
MYTH: MaineCare is welfare and enrollment is out of control.
FACT: MaineCare is a health care program. It provides health insurance and prescription drug coverage for the elderly, disabled, mentally ill and the poor. Seventy percent of enrollees are either children, seniors or individuals with disabilities. MaineCare payments go to hospitals and health care providers to provide services not directly to eligible individuals.
According to the Department of Health and Human Services, the total funding for the MaineCare program has been largely flat since 2006. Last year, enrollment in the program was cut in the budget.
MaineCare caseloads have increased since 2002.. Growth in enrollment was largely been linked to the recession and from enrolling nearly 20,000 seniors and people with disabilities getting prescription drug help paid for with all state funds to the Medicaid program in 2007, where the state gets the benefit of federal matching funds.
MYTH: Maine has been failing in its duty to pay off its debt to hospitals.
FACT: The state has been steadily and increasingly paying down hospital debt, with the largest payment made in 2009. In 2009, we changed the way we pay hospitals to a pay as you go system to better manage our debt. The change was began to be implemented in 2010. Over the last two years, we paid the hospitals $276 million in settlements for prior debt plus ongoing expenses.
Hospital Payments: Settlements and on-going expenses
MYTH: Tax cuts pushed by Republicans are helping everyday Mainers.
FACT: The tax breaks in the biennial budget passed in 2011 only provide the average middle-income Maine family with $119. The top 1 percent, however, could get back almost $3,000. The top 1 percent in Maine have an adjusted gross income of $356,608 and up and get an average tax cut of $2,810. The tax cuts, which largely benefit the wealthy, contributed to significant portion of the shortfall, accounting for over $400 million, or nearly 45 percent, of the structural budget gap.The changes cut the top income tax bracket rate from 8.5 percent to 7.95 percent.