LePage: Pay off hospitals and sell bonds to create $600 million in investment


Audio of the Governor’s Weekly Message can be found here.

Maine people work hard to pay their bills, and government should too.

Hello. This is Governor Paul LePage.

This week, I submitted emergency legislation that when enacted, will lower Maine’s debt by nearly half of a billion dollars. Maine owes its hospitals $484 million in unpaid medical bills which go back as far as four years ago.

Many Mainers know what it is like to juggle their bills until pay day arrives. Imagine waiting for up to four years to be paid for your work.

The State has used its hospitals to bankroll its expansion of welfare.

Paying our bills is critical for Maine’s economy, ensuring hospitals are paid the money owed to them, protecting good paying jobs, and adding more opportunities for new jobs.

It’s time we pay it back and erase this debt so Maine can move forward.

For Maine to receive the best return on investment, we must act now.

The federal governments matching rate for Medicaid provides Maine with one dollar and seventy cents for every State dollar. The matching rate drops every year. To settle this bill, Maine will spend $186 million while the federal government pays nearly $300 million.

All 39 hospitals in Maine will finally be paid for services rendered under my plan.

Here are the facts. My plan pays our hospitals with revenues from liquor sales. It restructures the management of the liquor business, estimating in upwards of 40 million annually will be generated from the liquor sales. It also provides consumers and retailers a better deal than today.

As part of this plan, the State will retain operational control over liquor sales starting in the summer of 2014 when the current 10-year private contract expires. That contract has cost Maine hundreds of millions, and my plan will return these revenues to the State.

We will contract out many services, among those logistics and warehousing.

I believe under State management, we can actually grow this business by lowering prices on spirits so Maine can better compete with New Hampshire. It will also give a better value to the customer.

The fact is, with this plan, the State will see a much greater return on investment.

These actions make right two very costly mistakes of my predecessor: the bargain basement, shortsighted 10-year sell-off in 2004 of one of the State’s most reliable revenue streams – our liquor business – and the decision to stop settling-up our hospital bills in an attempt to pay for welfare.

And, because we are settling up on the old debt, it will be financially prudent to issue the more than $100 million in outstanding, authorized bonds to boost Maine’s economy.

Between paying off the hospitals and selling the bonds, nearly $600 million of investment will kick-start the Maine economy this spring and summer.

This is the right thing to do and it will have a dramatic effect in creating jobs and investment and improving Maine’s job opportunities across the State.

It is my intention to ask the House and Senate to enact this legislation quickly.

With the full support of the Legislature – which I hope will put politics aside and Maine people first – hospitals could receive their payments in a matter of months.

Thank you for listening.


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