One on One with the Governor: LePage prepares for final push on DHHS budget

This is the first of a series of exclusive interviews that The Maine Wire will be conducting with Governor Paul R. LePage. 

By Peter A. Steele | The Maine Wire

As the winds of political frenzy swirled around Augusta last week, with Republicans reeling after Ron Paul supporters stiff-armed them at the GOP state convention and Democrats launching into time-worn tirades against welfare reform, one man sat in his office, relaxed and at ease.

Governor Paul LePage was long ago acclimated to the political storm, and it doesn’t deter him. He was elected on his promise to reform Maine government, and he pursues that mission with a single-minded determination.

Sitting at the governor’s desk in his spacious office, LePage commands a CEO’s business-like presence, but he looks right at home as he smiles and chats in an easy-going manner.

When asked if the interview could be recorded, both LePage and his press secretary, Adrienne Bennett, laughed out loud. He is not a man who worries how his words will be used.

At the tail end of his second legislative session as governor, LePage is focused on one of his major goals: creating long-term, structural reform in the Dept. of Health and Human Services. The battle is almost won, but he takes nothing for granted.

The Appropriations Committee voted 8-4 along party lines to send a bill to the legislature that would close the $79 million shortfall in DHHS. Unlike the previous two governors, LePage refuses to use one-time surplus revenue to fill the gap. Shunning the political expediency employed so deftly by Angus King and John Baldacci, LePage forges ahead in his pursuit of structural reforms.

“We have a welfare program that has grown one-billion dollars in the last decade,” LePage said on Friday during an exclusive interview with The Maine Wire. “It’s eating up a third of the state budget. Welfare should be only 25 percent of the budget. We simply can’t afford to raise taxes to pay for it, especially since the average income in Maine is only 74 percent of the national average.”

He insists that Maine has to do more with less, and that means cutting certain services that some people have come to rely on—thanks to overly generous programs implemented by the previous two governors.

“We are only trying to cut eligibility for those who are healthy enough to go out and get a job and care for themselves,” LePage said. “That’s the whole concept of what we are trying to accomplish.”

Democrats critical of LePage’s proposals resort to their typical hyperbole, bleating that the cuts would mean throwing the elderly into the streets or that children would starve. “It’s wrong,” the governor said. “It’s deceptive. It’s just plain wrong.”

LePage is proposing to create long-term structural reform in the Department of Health and Human Services, while preserving services for the truly needy, disabled and elderly. The proposed bill includes eliminating Medicaid (MaineCare) for some people by reducing Maine’s expansive eligibility requirements and bringing them in line with the national average.

Proposals in the bill would eliminate MaineCare, the state’s low-income health insurance program, for an estimated 7,000 19- and 20-year-olds; tighten eligibility for seniors who get assistance for prescription drugs; and reduce funding for some public health programs. Head Start funding would decrease by six percent.

Funding for adults with disabilities who live in home- or community-based arrangements other than health care facilities will remain intact, as will funding for general assistance programs.

Other proposals include decreases in the Children’s Health Insurance Program and for smoking-cessation programs, as well as a two-year limit on taxpayer-funded methadone treatments. The bill also calls for a task force to study reforms at DHHS, which would take effect during the next biennium.

“State and federal subsidies for Head Start will remain, including $31 million in federal funding,” said Adrienne Bennett, LePage’s press secretary. “It is imperative people understand that this program will not fall apart at the seams because of this budget.”

Ignoring the need to reform how DHHS does business, Democrats refuse to put forth their own plan and simply repeat their shopworn talking points. They say the proposals will eliminate MaineCare for 21,000 people, but they don’t explain why.

Maine’s major newspapers reported that Rep. Peggy Rotundo (D-Lewiston), the lead House Democrat on the Appropriations Committee—and the biggest proponent of welfare expansion during the Baldacci administration—called the Republican budget bill “extreme and irresponsible.” None of the stories explained why.

“The Republicans are making dangerous cuts that will harm seniors, children, and people with disabilities, while passing more unfunded tax cuts,” Rotundo said in a statement to the press. None of the papers provided specifics about the dangers Rotundo alleged.

“We are trying to make sure that we have a solid safety net for our children, our elderly and our disabled,” LePage said. “We are trying to attack those who are abusing the system: the able-bodied, 18 to 45, who have no disabilities, who are not hampered physically or mentally and are either under-employed or unemployed.”

Democrats claim there is no crisis in the welfare system, but LePage said spending on welfare programs in Maine is 60 percent higher than the national average. Maine provides Medicaid coverage (MaineCare) to 35 percent more of its population than the national average. In 2009, Maine spent almost $1,900 per capita on MaineCare, while the national average is just under $1,200.

“We are by far—by far—one of the most generous states in the union,” LePage said. “We have people who are making 200 percent of the federal poverty level getting all kinds of benefits. We’ve gotten so generous with MaineCare that people leave their commercial insurance and go on it because it is free.”

On average nationally, one in five people receive some kind of welfare assistance. In Maine, it’s one in three. “If we could get it to one in four, I’d claim success,” LePage said.

A significant reason to push for welfare reform in Maine is the specter of Obamacare looming over the nation. If Maine does not reform its addiction to MaineCare, then it could be locked into its exorbitant cost structure forever.

The Affordable Care Act, known as “Obamacare,” requires that all states must maintain the level of Medicare that they now provide. If states provide a level of Medicare that is below the national average, then the federal government under Obamacare would reimburse those states so they could bring their spending up to the national average.

But Maine, which provides a level of Medicare that is much higher than the national average, would be penalized because it would be forced to maintain a level that is beyond what other states pay, LePage said.

Parts of Obamacare are now being challenged in the courts. But if the Affordable Care Act is survives, Maine will be locked into its expensive MaineCare structure. If Obamacare is enacted, Maine would try to get waivers from the federal government to avoid paying the higher-than-average level of Medicare.

“Even with all of my cuts, we would still be one of the most generous welfare states in the union,” LePage said.

He is trying to weed out excess and abuse at DHHS while maintaining vital services for those who truly need it. But Democrats like Rotundo insist that claims of welfare abuse are merely anecdotal, even as many cases of fraud are now being investigated.

In one such case, a store employee witnessed a customer purchase four lobsters with an EBT card, then give the tasty—and expensive—crustaceans to someone waiting in a car outside of the store. The driver passed the customer a white envelope, then drove off.

The employee reported the name of the customer and the license plate of the car to investigators. “We can’t afford to allow that kind of abuse,” LePage said.

In another “anecdote,” he recalls an employee at Marden’s who was 20-years-old and pregnant. She was making $11 an hour, which is not bad for someone with only a high school diploma, he said.

“She told me that if she quits her job, the state will help her,” LePage said. “But if she keeps her job, the state won’t help her.”

When he was flying back from North Carolina recently, a passenger on the plane related another “anecdote.” The passenger said that he had once flown with a man who applied for MaineCare while living as a resident in Texas. Once he was accepted, the man came to Maine for surgery.

“Peggy Rotundo and Margaret Craven would say that’s anecdotal,” LePage said.

Senator Craven, another Lewiston Democrat who supported massive increases in state spending under Governor Baldacci, frequently joins Rotundo in insisting that there is no widespread abuse of the welfare system in Maine. Whenever someone relates a story about welfare fraud or abuse, they claim the stories are merely anecdotal and, therefore, don’t prove anything.

“If those are all anecdotal, then where’s the money going?” LePage said. “Why are we spending so much money?”

LePage said that there are too many people 18 to 45 that take advantage of the State of Maine, and he would rather see them working at good jobs to support themselves. That is especially true for the 19- and 20-year-olds who may lose MaineCare benefits.

LePage said his goal is to get these young people trained in a skill so they can get to work. “There are over 4,000 jobs unfulfilled in the State of Maine,” LePage said. “We’re trying to match up people who are unemployed with the skills that are needed in the marketplace.”

LePage said his administration is using CTEs, Dept. of Labor training programs, a mobile training system and Chambers of Commerce around the state to identify what jobs are available.

“We are doing all we can to provide the right skills to the right person,” he said. “The biggest problem—and I sincerely mean this—is we’ve got to get them off the couch. We want people to better themselves. We want to help them, but we cannot allow abuses, and we can’t put everyone on the system.”

Another pressure on the welfare system is “charity care,” which drives up costs for both hospitals and people with private insurance. Doctors and hospitals increase fees for privately insured patients to make up for “charity care,” the losses they suffer with MaineCare patients. LePage said Maine cannot afford to pay an adequate rate of reimbursement to doctors who accept MaineCare.

“We pay them 44 cents on the dollar,” he said. And Maine hospitals have an eligibility and utilization rate that is 60 percent above the national average. “We need to drop that from 60 percent to 30 percent,” he said.

But if people who are 18 to 45 get kicked off welfare, won’t they just go to emergency rooms for their medical needs? LePage said he is working with hospitals on a plan for such emergency-room visits. Anyone who comes to the emergency room will be assigned a doctor.

The first visit may be free. But the second time the person comes into the ER for treatment, they will have to see their doctor and provide a co-payment.

“We need to get eligibility levels down to where we can pay reasonable reimbursement for doctors and hospitals so they don’t shift those costs onto people with commercial insurance,” LePage said. If Maine tightens up its eligibility for MaineCare, “we will be able to solve this problem,” LePage said.

Critics claim that tightening eligibility would prevent some of the elderly from getting assistance for prescription drugs. But for the Maine Rx Plus program, “our income eligibility is 350 percent above the national poverty level,” LePage said. “In Maine, an elderly person making $57,000 a year qualifies for assistance on prescription drugs. We’re just trying to lower that to $32,000.”

Although some Republicans were getting weak-kneed about supporting LePage’s hardline stance on the DHHS budget, he said they are now coming on board. And what are the Democrats proposing to fix the structure of DHHS and the spending on the welfare budget?

“The Democrats are doing what they did for the past two years,” LePage said. “They are sitting on their hands complaining. They don’t have a plan.”

When it was revealed that revenues were up by about $49 million more than expected, Democrats insisted that it be spent on the welfare budget. LePage won’t hear of it.

The governor notes that state spending on education and welfare already makes up 82 percent of the budget. Just on education and welfare alone, Maine spends “one billion dollars above the national average,” he said.

Add the $326 million that Maine spends above the national average on energy costs, and 40 percent of the entire budget is above the national average, he said.

How did Maine get into a position where it spends so much more the national average? The biggest mistake that Maine ever made was electing an independent governor in 1993, LePage said, referring to Angus King. “He’s a lovable governor, and everybody thinks he’s great. But he had to buy his way through eight years of being governor. He gave the Democrats everything they wanted, and he gave the Republicans everything they wanted.”

When King took office, the state had a surplus in the budget. When he vacated the Blaine House, King left a one-billion-dollar shortfall for incoming governor John Baldacci, LePage said. That shortfall was carried through Baldacci’s term, and LePage is determined to get rid of it.

“We need to take that one billion dollars and put it into Maine’s economy and into education,” LePage said. “This is all money that could be used for conservation, education, DEP, Department of Labor, marine resources and IF&W.”

It is well known that Maine has a top-heavy administrative structure in its schools. Maine has 164 superintendents for 186,000 students, which equates to one superintendent for every 1,134 students. Again, Maine is above the national average. Nationally, school systems have one superintendent for every 1,500 students.

LePage understands that Maine would pay slightly higher than the national average for education. But the education budget is much higher than that: $700 million above the national average.

“We have the smallest class sizes in America, and we have the poorest-paid teachers in America,” he said. “We need to find good teachers, and we need to pay them well. Why don’t we make our teachers more effective, increase class sizes a little bit and reduce the number of superintendents so we can get a good-quality education.”

LePage acknowledges the achievements he has made, but he has laser-like focus on the rest of his agenda, including budget reduction, more comprehensive education reform and unacceptably high energy costs. “He won’t quit,” said his press secretary, Adrienne Bennett. “He never stops.”

But LePage will have to convince more than Democrats to get it done.

“We’ve failed in solving our energy problem because of a Republican,” LePage said. “And we got only a fraction of what we wanted in education because the Republicans got weak-kneed.”

Despite those setbacks, LePage said that much was accomplished during his first two legislative sessions. “Many, many good Republicans—and a few Democrats—really tried to make a difference,” he said. He credited both sides of the aisle for coming together to work on his initiative to eradicate domestic violence.

“If both sides could come to the table like that on education and welfare, we could fix these problems in one term,” LePage said. “At the rate we’re going, I’ll be 140 before it’s done.”

With the DHHS budget coming up for a vote on Thursday, LePage said the legislature has the opportunity right now to make some real changes. But will they have the courage to do it, especially in an election year?

“We’ll see,” he said. “In the second year of a two-year cycle, everybody is concerned about re-election and little gets done. Maybe we ought to consider having longer terms.”

Bennett is hopeful that legislators will support the budget. “Republicans have crafted a meaningful budget that moves Maine toward fiscal sanity,” she said. “It’s difficult to make reductions. However, if Maine is to provide for the truly most vulnerable, improve our education system and begin to save for our future, this budget will be supported by Legislators.”

If the budget is altered before it is passed, would LePage consider a veto? “I am not going to speculate as to what the governor may or may not do,” Bennett said.

As soon as the budget is finalized, LePage said he will campaign hard to encourage citizens to vote for legislative candidates who have the courage to make the right decisions once they reach the State House.

“I will be campaigning until Election Day to encourage citizens to elect people who will fix energy, fix education and fix welfare,” he said. “That’s what Maine people need to focus on. Vote for people to make the tough decisions, and we can get Maine moving again.”

LePage said two constituent groups have been largely ignored: the ratepayers who pay for Maine’s high energy costs; and the taxpayers who pay for Maine’s government. He will continue to lobby for them during the second half of his term, and he will continue to fight the budget deficit.

“I’m intent on eliminating it before I leave,” LePage said. “It doesn’t matter what they say. I’m not here to win a popularity contest. I’m here to fix a problem.”