The Appropriations Committee caucused all day and throughout the entire night of June 6 into the morning of June 7 when the Committee began to vote on various budget lines beginning around 5:00 A.M. The Appropriations Committee worked until midnight, Friday night, when it unanimously approved the General Fund Budget.
The Democratic Budget proposal provided for the restoration of $300 million for programs cut by the Governor. The Republican proposal initially proposed no program restoration unless the funds came from currently funded programs, and argued against any tax increases. The final budget provides for restorations of roughly $260 million. The increased revenues are derived from a number of taxes and savings including but not limited to:
- A half-penny increase in the Sales Tax from 5% to 5 ½% to yield $133,807,800, which sunsets June 30, 2015,
- An tax rate increase from7% to 8% on meals and lodging to yield $44,643,352, which sunsets June 30, 2015
- Tax Expenditure Study Commission to yield $40 million in savings
- Bonding renovations to state building in lieu of funding from the General Fund to yield $7,136,780 in savings.
A Comparison of General Fund Budget Proposals
|Item||Governor’s Proposal for the Biennium||Initial/subsequent Republican Proposal for the Biennium||Democratic Proposal for the Biennium||Unanimous Appropriations Proposal for the Biennium|
|General Purpose Aid –(GPA) Formula||($25,200,000)||$12,000,000||$41,400,000||$32,000,000|
|GPA, Casino $ through EPS formula||$0||$0||$26,000,000||$26,000,000|
|GPA – Miscellaneous||$5,000,000||$5,000,000|
|Teacher Retirement shifted to school districts||($29,404,285)||($29,404,285)||($29,404,285)||($29,404,285)|
|Municipal Revenue Sharing||$0||$125,000,000||$152,521,887||$125,000,000|
|Circuit Breaker replaced by Tax Fairness||($73,000,000)||$ 29,199,804||$29,199,804||$29,199,804|
|Homestead||( $8,768,000)||( $ 8,768,000)||$8,768,000||$ 9,100,000|
|Merit Pay for State Employees||$0||$ 3,750,000||$ 11,396,618||$ 7,567,304|
|Longevity Pay for State Employee||$0||$ 2,502,389||$ 2,502,389||$ 2,502,389|
|State Employee Health Insurance||No increase||No Increase||$ 10,000,000||$ 7,717,000|
|Elderly- Low-Cost Drugs Pre-June||$0||$0||$14,016,852||$14,016,852|
|Medicare Savings Program||$0||$0||$27,000,000||Fully Restored|
|Portland Dental Clinic – Early May||$0||$0||Restore||Restored|
|General Assistance||$0||$0||$ 6,700,000||Restored|
|Hospital – 10% outpatient cut||($12,111,000)||($12,111,000)||($12,111,000)||($12,111,000)|
|Critical Access Hospitals||($ 7,880,765)||($ 7,880,765)||$7,888,894||$7,888,894|
|Hospital Tax and Match||Tax, no match||Tax, no match||Tax with match||Tax with match|
|Services for the Blind/Visually impair||($ 296,848)||$296,848||$ 296,848||$ 296,848|
|PNMI Spend-down||$0||$0||$ 772,000||$ 772,000|
|Ineligible Spouse Disregard||$0||$0||$ 627,496||$ 627,496|
|Women, Work, & Community||$0||$0||$ 170,000||$ 170,000|
|Center for Deaf &the Hearing Impaired||$0||$340,000||$ 340,000||$ 340,000|
|Legal Non-Citizens Denied Assistance||$0||$0||$1,293,315||$1,293,315|
|Contribution to the Budget Stabilization Fund||$0||$0||$0||$4,000,000|
|Maine Workforce Committee- LD 90||$0||$0||$5,000,000||$3,000,000|
|College for ME- Androscoggin||$0||$0||$200,000||$200,000|
|Jobs for Maine’s Graduates||$1,000,000||$1,000,000||$300,000||$300,000|
|Equalization of reimbursement to inpatient substance abuse treatment||$0||$0||$2,000,000||$1,900,000|
|AMHI Consent Decree||$2,000,000||$2,000,000||$2,700,000||$2,700,000|
|Reduce the wait list for individuals With developmental disabilities for Sec. 21 & 29 services||Create 85 out of 1,790 slots||Create 85 out of 1,790 slots||Create 85 out of 1,790 slots||Create 85 out of 1,790 slots|
|Support for indigent legal services||$5 raise||$5 raise||$5 raise and additional $5 raise next year||$5 raise|
|Transfer of $600,000 in funding from the AG to the Governor||$600,000||$600,000||$0||$0|
|Funds for Charter School legal defense fund from GPA||$1,000,000||$1,000,000||$0||$0|
|Sales tax on periodicals||($5,918,500)||($5,918,500)||($5,918,500)||($5,918,500)|
|1.4% department wide cut to DHHS||$0||$19,700,000||$10,000,000||$0|
The committee acknowledged revenue provided by approved legislation.
Recognized revenue: recognized revenue
Education. With respect to General Purpose Aid to Education, the Biennial budget:
- Restores $16 million each year of the Biennium to GPA,
- Provides $300,000 for the Jobs for Maine Graduates Program
- Provides $2 million each year for proficiency-based diploma and $500,000 each year for the College Transition Program,
- Provides that Casino revenues of roughly $13 million each year that are currently earmarked for miscellaneous expenditures will flow to schools through the EPS formula,
- Shifts teacher retirement costs to school districts,
- Provides for a 1% growth each year in the state share of the cost of education until the state share reaches 55 percent, beginning in FY 2016,
- Provides that the Commissioner of Education may expend and disburse up to $500,000 in FY 2014 for the Comprehensive Early College Program [Bridge Year Program] and up to $200,000 in FY 2015 for the College for ME-Androscoggin program,
- Rejected the request in the Education budget for $1million for legal defense in regard to charter schools and other issues.
- Includes language to support the creation of scholarships for the descendants of former residents of Malaga Island
- Amended Part C initiatives.
Adult Education – Saved $160,000 in the GED examination by finding an alternative for the next 6 months when the contract comes to an end. The current contractor proposed to add expensive security features.
Additional EDU Amendments:
Health and Human Services
The budget also:
- Preserves the Portland Dental Clinic,
- Removes the prohibition of social services to legal immigrants who have not resided in the U.S for 5 years or more,
- Removes the provisions regarding Spousal Disregard that denies benefits to an otherwise eligible spouse in order to provide services to an eligible spouse in need of care,
- Provides $1.3 million each year for Head Start to maximize Maine’s use of Federal Block grant dollars under the Federal Child Care Development Fund
- Increases the MaineCare rates for inpatient substance abuse services based on a case-mix index multiplied by the psychiatric discharge rate,
- Provides for the Director of Blind and Visually Impaired to convene a working group to review the Business Enterprise Program, particularly with respect to the charging of utility costs incurred during the operation of the cafeteria.
- Restored funding for the Ineligible Spouse Disregard in which an otherwise Medicaid eligible spouse is denied Medicaid-funded health care because of the other spouse’s income.
- Accepts the recommendation of the Health and Human Services Committee to provide for 7 hospital bed-hold days per hospital visit and 20 Therapeutic bed-hold days per year for residents in long-term care facilities – consistent with the Health and Human Services Committee report on LD 1364,
- General Assistance. By incorporating additional elements of the General Assistance Workgroup Report, the Appropriations Committee identified savings to preserve General Assistance.
- Provides for additional savings of $1,079,135 each year from “third-party Liability”,
- Including new and less expensive drugs in the Medicare Part D plans,
- Phasing in payments in the Medicare Part D “donut hole,”
- Eliminating the Medicare Part D wraparound,
- Increasing funding in the Fund For A Healthy Maine Medical Care Program and decreasing funding in the Medical Dare-Payments to Providers program,
- Reducing the inappropriate use of antipsychotic medication by long-term care residents,
- Reduces funding for Crossover payments in the Medicare Savings Program
Eliminates the Governor’s reduction in state GA reimbursement to municipalities at 50%, and maintains the 90% reimbursement rate for municipalities in which General Assistance reaches the statutory established percentage of local revenues,
- Makes an individual who is a fugitive from justice ineligible for General Assistance,
- Provides for a hardship extension for sufficient benefits for the necessities of life,
- Provides $2.7 million to meet the State’s obligation under the AMHI Consent Decree
- Provide funding to reduce the number of people on the waiting list for the Section 21 and Section 29 waivers for Developmentally Disabled persons.
- Rebases from 2008 to 2012 the year on which the Hospital tax is imposed. Rejected the annual , updating of the base year, and provides the match to hospitals,
- Accepted the Governor’s 10% cut to hospital out-patient rates,
- Restored funding for Critical Access hospitals.
Restored merit increases for FY 2014
Restored Longevity for the Biennium for state employees eligible for these payments as of June 30, 2013
Provided additional funding of $7.7 million for the State Employee Health Insurance Program,
Extends the Voluntary Employee Incentive Program for the 2014-2015 Biennium.
- Prepared a letter to the Chairs of Criminal Justice and Public Safety in regard to the current operation of the state’s corrections system and the lack of collaboration and cooperation among the jails and the Prison system. Proposed penalties for jail administrators and officials who refuse to cooperate with the board of Corrections.
- Provides up to $250,000 for the Department of Corrections to do a feasibility study on the need for a new prison by a third party.
Joint Select Committee on Workforce Development and Maine’s Economic Future [Legislative Budget]
The Committee approved and incorporated LD 90, the product of the Joint Select Committee, into the Budget, and funded it with $3 million from the General Fund and $1 million from the Legislative Account.
- Provides for the delivery of programs and courses to adults needing assistance in meeting requirements for post-secondary education and admission to training programs,
- Provides for the seamless transfer of post-secondary credits among the University System campuses and the Community College System,
- Creates the Maine Industry Partnership Assistance Program in the Office of the Governor to ensure that employees are directed toward and trained in high-skill, high demand, livable wage jobs.
- Provides for the alignment of existing training programs with industry partnerships,
- Creates the 13 member Task force on Adult Learners to develop a plan by which more than 200,000 adults who have obtained some post-secondary education to complete their degree requirements or obtain professional certificates.
- Creates the Maine Energy Industry Partnership on training in the heating, ventilation, and air conditioning trades
- Creates the Working Group on Adult Workforce Readiness
- Establishes the Maine Incumbent Worker Training Program
Transferred the Women, Work, and Community Program to the University of Maine System and funds it at $340,000 for the Biennium.
- Provides language and position transfers and reallocations for the merger of the Department of Agriculture and the department of Conservation,
- Provides for the distribution of $3 million in FY 2013 to dairy farmers in need of assistance for the purchase of seed and other products based on hundred-weight,
Judicial-Attorney General. The Committee
- Deappropriated $1.2 million from the Judicial Debt Service program and an additional $786,000 from the same program to be used for collective bargaining costs for the Judiciary.
- Rejected the Governor’s proposal to provide $600,000, of which $300,000 would have come from the Attorney General’s budget, to the Governor’s legal defense account when the Attorney General opined that the Governor’s pursuit of an issue did not meet the need for legal action.
- Provides funding for an additional death investigator
- Provides additional funding for 2-part-time medical examiners,
- Appropriates $200,000 to Pine Tree Legal,
- Appropriates a $5 per hour raise for indigent legal defense attorneys.
- Provides for Judicial pay increases
- Tax Conformity. Conforms with several provisions in the Federal tax code such as “Married Filing Jointly.” Caps itemized deductions at $27,000. Also does not conform with a one year change to the tuition exemption, to which Maine has never conformed previously.
- Provides Maine residents with a Maine Adjusted income of up to $40,000 per year, a refundable property tax fairness credit against State income taxes. This program replaces the Circuit Breaker Program and does not require a separate application. It is expected to provide 90,000 homeowners and renters with property tax relief.
- Extends the tax credit for aircraft sales of repair and replacement parts for overhauling or rebuilding of aircraft until 2021
- Accepts the governor’s proposals regarding:
- Taxation of publications
- Taxation of digital on-line products
- Suspension of Tax Indexing and future use of the chained CPI – raises the personal income tax,
- Rejects and replaces the Governor’s tax proposals as follows:
- Restoration of the Homestead Exemption – Applies to persons under 65 years of age,
- Replaces the Circuit Breaker with the Tax Fairness credit, for which application can be made on the income tax form. For persons under 70 who are eligible for the credit, the credit is capped at $300, and $400 for persons 70 and over – with an average gross income of $40,000 or less.
- Restores the BETR program,
Rejects conformity with the federal Internal Revenue Code for qualified tuition and related expenses in order to produce savings for the Budget
- Includes technical language to address the LD 1 cap for municipalities
Rejected the Governor’s proposal of $0 for Revenue Sharing and restored $125 million for a two-thirds restoration compared to Revenue Sharing for the 2012-2013 Biennium
Restores $2.8 million for Clean Elections for legislative races only. Funding for Gubernatorial races has been removed. The Republican proposal was $2.4 million, and the Democratic proposal was $4.7 million.
Task Forces and Studies.
Creates a Non-profit Tax Review Task Force consisting of 9 members including 2 Senators and 2 Representatives – one from each party, members representing the Association of Non-Profits, the Maine Municipal Association, and the Commissioner of the Department of Administrative and financial Services,
Creates a 13 member Tax Expenditure Review Task Force to examine tax expenditures – Tax exemptions and credits – in regard to their effectiveness and need. The Task Force includes 2 Senators and 2 Representatives. And is expected to identify $40 million in savings in FY 2015
Creates an independent feasibility study of the need for a new prison at Windham
Creates a study of municipal mandates.
State and Local Government
Office of Policy and Management. Increases from $10 million to $11,250,000 the amount of Savings the Office of Policy and Management [OPM] must find in administrative and efficiency savings in FY 2014. The budget increases from $20 million to $22,500,000 the amount of savings the Office of Policy and Management must find administratively or by elimination of programs in FY 2015. If OPM fails to find the savings required, the Governor is authorized to use his curtailment authority to achieve the savings.
Replaced $10 million of appropriations for renovations and repairs to state buildings by appropriately bonding for capital expenditures through the Maine government Facilities Authority.
Provides for the transfer of savings for conversion to natural gas in state buildings.
Rejected the Governor’s split of funding for the State Police and approved 65% of funding from the General Fund and 35% from the highway Fund.
- Provides funding in FY 2014 for the clean- up of the Callahan Mine,
Veterans and Legal Affairs
Provides for an Office Associate II in the Portland Office which will increase outreach to veterans in Cumberland County.
We expect that the budget will be printed by Wednesday. It is our home to swiftly complete floor action and meet our obligations, by the end of the week.
Please let me know if you have and questions or concerns.