AUGUSTA – Governor Paul R. LePage has proposed a balanced state budget that reflects necessary fiscal discipline which reduces the impact to education, pays bills, right-sizes government, and provides a safety net for the most vulnerable. (The full budget document is available by clicking here.)
“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,” Governor LePage said. “Maine’s economic security and future is at stake and we must make hard choices so we do not leave our children with unmanageable debt.”
This biennial budget builds on the work of the last two years to eliminate the ongoing deficit and directs Maine on a long-term path to fiscal security.
The Governor addresses upcoming funding challenges within Maine’s welfare programs which are a direct result of reduced federal funding. The federal government established many of the welfare programs that Maine people are enrolled in currently.
Nationally, state spending on Medicaid exceeds funding for K-12 education and in the last decade, Medicaid spending has outpaced education at a rate of two to one.
“States were enticed to participate by high federal match rates that subsidize the cost,” said Governor LePage. “But now the federal government is significantly reducing matching funds for programs like Medicaid, placing an added weight on the backs of Maine taxpayers.”
From 2009 to 2011, Federal American Recovery and Reinvestment Act (ARRA) funding brought nearly $600 million to Maine, which reduced the impact on the State’s budget. The Federal Medicaid Match rate has been reduced significantly from 74.73 percent in 2010 to 62.57 percent in 2013. The cost shift over the next two years totals $40 million.
Governor LePage expressed that difficult choices were made to balance this budget.
“Some worthwhile programs are not funded – some have seen major reductions – and we’ve prioritized your tax dollars on maintaining a safety net for the most vulnerable.”
In a continued effort to right-size state government, this proposal eliminates about 200 state jobs and seeks to achieve an additional $30 million in savings by eliminating the lowest-value programs.
Circuit Breaker and the Homestead tax exemption were modified to focus on the elderly and on veterans who serve our country.
“There is no doubt about it – while there are a few bright spots in this budget, these were not easy decisions to make. But in the long-run, these choices are necessary to protect the future of our children and grandchildren, and create a plan for spending your tax dollars that is fiscally responsible and will set us on the path to recovery,” Governor LePage concluded.