Both the Maine House and Senate voted Friday, June 14 in favor of approving a new biennial budget that Governor Janet Mills signed into law Monday afternoon, weeks in advance of the deadline to avoid a government shutdown. The new $7.98 billion dollar budget is a $780 million, or 10.8 percent, increase over the previous budget. Both parties (and the governor) are already heralding the bipartisanship needed for passage while simultaneously claiming victories on their priorities that made it into the final agreement.
Maine is expected to receive $7.87 billion dollars in General Fund revenue during the upcoming biennium, approximately $85 million dollars less than what the budget spends. However, the difference between the budget spending approved Monday and the state’s estimated revenue over the two-year period is being filled by $139 million in excess revenue left over from the LePage administration. It almost goes without saying that this amount of spending is unsustainable.
The General Fund revenue projections used in the state budget are produced by the Maine Revenue Forecasting Committee, which states its estimates are predicated on the assumption that the national economy will continue to expand in the coming years. However, the committee’s most recent report also notes that we are approaching the longest post-war economic expansion in history. In addition, the committee cautions that any slowdown or contraction in the national economy will have a corresponding negative impact on General Fund revenues.
Every two years, both the Consensus Economic Forecasting Committee and the Revenue Forecasting Committee perform an “Economic Stress Test” to evaluate the effect an economic downturn would have on the Maine economy. The most recent stress test, performed in 2018, assessed the impact of a moderate or severe recession and concluded that, in the event of a moderate recession, Maine would see a reduction in General Fund revenue of $60 million in both 2020 and 2021.
In the event of a severe recession, the stress test found that Maine would see a decrease in General Fund revenue of $138 million in 2020 and $226 million in 2021. Thus, in the event of a moderate or severe recession, Maine’s General Fund revenue would be significantly less than the approved spending over the biennium, with no surplus left to plug the funding gap.
Ultimately, the 2018 economic stress test concluded that the state should have the equivalent of at least 10 percent of General Fund revenues in the Budget Stabilization Fund (BSF)—commonly referred to as the “Rainy Day Fund”—to mitigate the effects of a moderate recession. Additionally, in order to thwart the effects of a severe recession, the state would need the equivalent of 15 percent of General Fund revenues in the BSF.
Nevertheless, the bloated spending package was approved by two-thirds in both chambers and signed by the governor. A majority of the new spending goes toward projects on which the governor campaigned; increases in K-12 education spending by $111 million, $17 million for public colleges and universities and $125 million to expand Medicaid. Additionally, the budget provides initial funding to offset the burden municipalities face from the passage of the $40,000 minimum salary for teachers, another one of the governor’s campaign promises.
While the budget provides funding for many projects, it leaves only $6 million available to fund the many bills sitting on the Special Appropriations Table. These funds should be reserved for the bills that will have the biggest impact at the lowest cost.
An example of one such bill is LD 84, “Resolve, Directing the Department of Health and Human Services To Allow Spouses To Provide Home and Community-based Services to Eligible MaineCare Members,” sponsored by Rep. Patrick Corey of Windham. Under the current fiscal note, LD 84 would cost merely $36,354 in FY 2019-20 and $63,453 in FY 2020-21.
The bill allows spouses to provide home and community-based services to eligible MaineCare members as a personal support specialist. Mainers who utilize the state’s home and community benefits for the elderly and adults with disabilities may hire a family member as their personal support specialist, however federal and subsequently state rules prevent the spouses of Medicaid recipients from delivering or receiving payment for these services. For individuals who rely on home and community-based support, their spouse is often considered the natural caregiver and would be the natural choice to provide these services.
Despite their inability to be officially hired as a caregiver under the current rules, spouses still spend a significant amount of time and resources caring for their loved ones. Some are forced to quit their jobs to care for their husband or wife around the clock, or whenever the current caregiver is absent from the home. They do this without receiving payment, and in addition, their workload around the home doubles when their husband or wife becomes physically unable to contribute. To make matters worse, the current system actually creates incentive for couples to get divorced in order to overcome the existing payment rules.
Under LD 84, spouses providing services as caregivers would be privately trained as personal support specialists and employed by agencies to fill an identified shortage within Maine’s direct care workforce. With this training, spouses will be able to fill lapses in patient care and be compensated for it. By keeping more Mainers in their own homes and out of nursing homes, this bill will pay for itself in short time.
Other bills that should be funded from the Special Appropriations Table include LD 534 “An Act To Make Ballot Questions Easier To Read and Understand for Maine Voters,” sponsored by Rep. John Andrews of Paris, and LD 255 “Resolution, Proposing an Amendment to the Constitution of Maine To Require That Signatures on a Direct Initiative of Legislation Come from Each Congressional District,” sponsored by Sen. Brad Farrin of Somerset.
LD 534 would require that ballot initiatives be written in a clear and understandable manner. Additionally, it would require the Attorney General prepare a statement that explains the impact of a “yes” or “no” vote for the Secretary of State to print directly on the ballot.
LD 534 has an attached fiscal note of $172,000, however this money would only be spent if the state is required to print a second ballot (the Secretary of State’s budget includes funding for the printing of a single ballot of average length and additional ballot text could necessitate the printing of a second ballot). Frankly, a clear understanding of what a “yes” or “no” vote entails on every ballot initiatives is worth every penny, and is sorely needed.
LD 255 is a constitutional amendment that requires petition circulators to collect signatures for ballot initiatives in both the 1st and 2nd Congressional Districts. Because the bill is a constitutional amendment that would be sent to voters as a ballot initiative if passed by the legislature, its fiscal note is also $172,000 for the potential costs of printing a second ballot. Ensuring that both congressional districts are equally represented in the citizens initiative process is well worth a $172,000 investment that may not even be necessary based on the number of initiatives approved for the next election.
Considering the budget approved Monday spends away the bulk of the state’s incoming revenue and leaves just $6 million to fund the many items left on the Special Appropriations Table, lawmakers should be looking to get the best bang for their buck with the remaining funds. Anything less would be a greater folly than the approval of an $8 billion budget.
