Maine: state of deception

By LANCE TAPLEY  |  August 27, 2008

“If legislators knew they had such a large surplus, I think it’s unbelievable that the Legislature — in particular, members of the Appropriations Committee — would at the same time express anguish over the cuts,” says Michael Tarpinian, director of Youth Alternatives Ingraham, a Portland-area agency that, with state money, serves the mentally ill, the homeless, and needy children.

In a similar vein, the Maine Council of Churches’s Eric Smith, who says he had no idea that such a surplus was in the cards, says he is “disappointed” that legislative leaders “walked away from defending people they are charged to protect.”

Carol Carothers, state director of the National Alliance for the Mentally Ill, says she, too, knew nothing about a big surplus. “There should be transparency in budgeting,” she comments.

Carothers says she’s “scared” about the cuts to community mental-health services and expects “significant layoffs and program closings.” Responding to similar concerns, Superior Court Justice Nancy Mills recently appointed a “monitor” or investigator to examine whether the state is meeting its obligations to the mentally ill. The state is under a 1990 court order to provide adequate assistance to this population, but the $10 million cut from mental-health services this year is on top of $33 million sliced away last year, and millions were cut previously.

This spring the Phoenix calculated that the most significant cuts to services for the mentally ill, child welfare, disabled people, the elderly, and poor people’s medical needs totaled $36 million (see “Taking from the Poor,” by Lance Tapley, May 7). Even after the Legislature put aside the $10 million (and it had earlier decided $2 million would go into other reserves), the rest of the surplus could have eliminated all of these cuts and more.

Political deal
So what happened to the surplus? When the biennial budget was approved last year, legislators tucked in a provision directing most of any surplus to increase the weekly amount the Department of Health and Human Services sends to the hospitals. These are advance payments of Medicaid (Maine Care) bills for health-care services for the poor. Baldacci announced this July that the hospitals will receive $44 million of the surplus.

This decision has a political history. During the 2006 gubernatorial campaign, Republicans had attacked Democrat Baldacci, who was seeking re-election, for not addressing two hospital complaints: that Medicaid payments weren’t sufficient to cover the cost of their services, and that the state had fallen behind in payments. To defuse the issue, Baldacci pledged in a letter to the hospitals that he would work to get the Legislature (with both chambers controlled by his party) to shell out $204 million over four years.

The “agreement timeline,” as Mary Mayhew, the Maine Hospital Association chief lobbyist, described it in testimony to the Appropriations Committee last year, foresaw $43 million in July of this year going to the hospitals to increase the Medicaid weekly payments. She even listed “anticipated surplus” as a source of funds. As it turned out, Baldacci delivered $1 million extra.

Most state officials, including legislators, believe Maine’s 39 hospitals are legitimately due more money from the state. In defense of giving the surplus to hospitals rather than using it to undo cuts to community social-service agencies, both government and hospital officials say Medicaid serves the same needy population.

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