May 8, 2013- Change Package

 Change Package

 Commissioner Sawin Millett of the Department of Administrative and Financial Services (DAFS) appeared before AFA to present the Governor’s change package to his FY 2014-2015 biennial budget as well as changes to the current fiscal year (Part A & B) (Language Parts) (Fiscal Note).

 A one page summary may be found here: One page Summary- Change Package

 The change package (CP) addresses the work of the Revenue Forecasting Commission (RFC) at the end of April.

 

Changes to Revenue April 2013

 

FY 2013

FY 2014

FY 2015

43,559,835

(38,085,515)

(30,263,944)

  Other changes include:

 Remove the initiative to spend $3.5M for an updated HR system.  DAFS will instead self-finance the purchase

  • $708,000 savings from natural gas
  • $7M in additional debt service and savings from over capitalized reserves
  • $1.7M net from enhanced collections of revenue due to Maine Revenue Services**
  • $4.3M in additional Merit Pay savings
  • $35.3M for DHHS cycle payments in FY13 and also to reverse a $1.9M “push” of payments to hospitals agreed to in the supplemental budget
  • $20M of increased savings in DHHS in the next biennium
  • DMR will self-fund the requested communications position
  • $200,000 of additional funding for Pine Tree Legal to support domestic abuse cases
  • $800,000 transfer to the State Board of Corrections to support the operations of County Jails
  • $1M for Indigent Legal Services
  • $3M for the Milk Pool in FY13 with the understanding that further General Fund assistance will not be needed in the entire next biennium
  • $400,000 savings from the elimination of public notices through traditional means
  • Remove the proposal to transfer tobacco enforcement from the AG to the Bureau of Health
  • $5M of increased savings in FY15 from an anticipated increase in the federal share of costs for Medicaid (FMAP)
  • Provides funding to contract for IV sedation at the Portland Dental Clinic, positions are still proposed to be eliminated
  • $4M of funding for slots in Maine’s Section 29 waiver program serving individuals with intellectual disabilities

 Language changes and additions in the change package include:

 Part AA removes legislative review of ACF-CON merger

  • Part OO alters the Governor’s proposals regarding GA
  • Part PPP reduces the amount provided to schools under the Insured Value Factor- a proposal rejected in the Supplemental budget
  • Part RRR reverses decisions enacted by the Legislature in the Supplemental budget
  • Parts VVV, WWW, LLLL, MMMM and NNNN all remove legislative oversight from spending decisions by various departments
  • Part VVVV removes the sunset of tax exemptions for aircraft and watercraft purchased in Maine by out-of-state residents
  • Part XXXX removes the premium tax from malt liquor and  low alcohol spirits but increases the excise tax on those beverages
  • Part YYYY contains the language regarding public notices
  • Part AAAAA changes the second opinion provision related to the prescribing of opioids under MaineCare
  • Part DDDDD reassigns code enforcement training from DECD to various other departments. DECD just received this responsibility from the dissolution of the State Planning Office
  • Part GGGGG proposes to conform Maine’s income tax laws with certain provisions of the Federal code
    • For 2013 the Governor proposes not conforming with the newly higher standard deduction for married filing jointly filers
    • The state will continue to not directly conform to bonus depreciation, retaining the Capital Investment Tax Credit
    • Total deductions capped at $27,500

 175,000 families would see a savings on average of $138/family. Over 12,000 families will see an increase.  Families according to Michael Allen of Maine Revenue Services that are on the higher end of the income scale. Mr.  Allen also provided a summary sheet and decile distribution table: Tax Conformity Documents

 The change package reduces the expected biennial ending balance. From $16.5M to $2.4M.

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