LePage Unveils Massive Jobs Plan; Says It’s Time For Maine To Pay Its Bills

Rob Poindexter

Updated 1 year ago

Tuesday at the University of New England in Portland, Governor LePage unveiled his mammoth new jobs plan. It includes repayment of a big hospital debt, release of voter-approved bonds for highways and other public improvements, and construction of a new prison in Windham. For the past several years, according to the governor, the state’s debt to Maine hospitals for unpaid MaineCare bills has skyrocketed, now topping out at around a half billion dollars. “In the state, we’ve got in a bad habit of having a very expansive and expensive healthcare system, but we use the hospitals to pay for it,” LePage told a crowd gathered in Portland. “It doesn’t work. There’s a day of reckoning.”LePage says that day is now. Tuesday afternoon he unveiled his plan to pay back the debt owed to Maine’s hospitals by using the the state’s future liquor revenues to facilitate a $186 million bond. That will trigger a $298 million federal match. LePage says the time to act is now, since the amount the federal government will match is steadily going down. LePage says this will pay our hospital debt once and for all. Back in 2004, the state signed a 10-year deal with the Maine Beverage Commission that netted the state $125-million up front, money they used to balance the budget at the time. Some critics of the deal say it may have cost the state as much as $100 million in lost revenue over the life of the deal.According to the current agreement, all liquor sold in Maine must pass through Maine Beverage Company’s Augusta warehouse. The five member Liquor and Lottery Commission decides how much to charge for liquor sold in Maine. That price is determined using a certain set of criteria. The state’s liquor contract is scheduled to be re-negotiated next year, with the state getting a larger piece of the lucrative liquor pie this time around. Some estimates say those revenues could be around $300-%500 million over the next decade.Included in the LePage proposal is more than $90.12 million in reimbursement to Bangor hospitals, $71 million to Eastern Maine Medical Center, $9.43 million to Acadia Hospital, and $8.79 to St. Joseph Hospital. In Augusta, Maine General Medical Center would receive $44.70 million in reimbursement from the state.Belfast Waldo County General Hospital is slated to get $6 million, while Maine Coast Memorial Hospital in Ellsworth gets $13.80 under the governor’s plan. LePage was flanked by leaders of Maine’s hospitals, who said this action taken by the governor will stop the bleeding. “When the state pays the outstanding hospital debt, hospitals will then be able to stem the tide of job losses that have been occurring over the past several years,” said Steve Michaud, President of the Maine Hospitals Association. “It will also allow us to stop borrowing against lines of credit many of our hospitals have been doing just to meet payroll.”LePage says he met with lawmakers earlier in the day and they were not entirely on board with his plan. “This morning I met with recently elected legislators and their recommendation was to pay just a percentage, pennies on the dollar, and call it a day. But if we do, that the net result is this. We all pay.”Once the hospital debt is paid, LePage says he’ll release more than $200 million in voter approved bonds he’s been holding back on. “The reason I have not gone to the bond market was simply because we did not have the ability and had not figured out a way to pay our hospitals.”Included in those bonds: more than $50 million in transportation and infrastructure improvements and $53 million for conservation, construction and post secondary schools.LePage says this all adds up to a $700 million shot in the arm to the Maine economy. But the governor needs legislative approval to move ahead. Democratic leaders say they have questions about the proposal to borrow money to repay hospital debt with a revenue bond for the state’s liquor contract. “Any new revenue from the liquor contract must be considered in the context of the budget the Governor released last week,” said Democratic House Speaker Mark Eves. “The hospitals debt is one of the many competing obligations we have. Our top priority must be to strengthen the economy and rebuild our middle class — not shift costs to Maine people and small businesses.”In a release sent out late Tuesday, Democrats argue Maine has been steadily and increasingly paying down hospital debt for the past decade. From fiscal year 2005-2010, the combined state and federal settlement payments to hospitals totaled $742 million, according to the nonpartisan Office of Fiscal and Program Review. “We have to continue paying our hospitals but the numbers put forth by the Governor do not add up. There are serious concerns about borrowing money to pay off our hospital debt,” said Maine Senate President Justin Alfond. “Asking Wall Street to pay our hospitals only leaves us in debt to Wall Street.” LePage says the ball is now in the legislature’s court, which is controlled by the Democrats. “I have spoken to the Republican leadership, they are 100% behind it,” LePage said. “If the people in the legislature care about the state of Maine, they’ll pay this bill.”If the LePage plan moves ahead, there are still more questions that lie ahead. The governor is attempting to cut the state’s Medicaid program, but has run in to resistance from the federal government. Recently the United State Department of Health and Human Services rejected the governor’s request to eliminate coverage for 24,000 low-income parents, nearly 7,000 19 and 20-year-olds, and 1,800 Medicare recipients who receive additional benefits under MaineCare.That waiver request was filed by former Attorney General William Schneider. After the Democrats seized control of the legislature last November, Schneider was ousted and replaced with Janet Mills. LePage says he’s confident Mills will appeal the U.S. Department of Health and Human Services decision. “First of all, I’ve spoken to the Attorney General. I’m confident she would,” LePage said Tuesday. “If she doesn’t, we’re just going to continue on in the same play. We’ll just hire our own lawyers. But I’m sure she will.”


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