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Budget deal eludes Democrats, GOP

This story was published on March 21, 2006 on Page B1 in all editions of the Bangor Daily News

AUGUSTA – Democrats and Republicans were reportedly about $4 million apart Monday in their efforts to reach bipartisan agreement on a supplemental budget package valued at about $160 million.

After making some progress over the weekend, legislative leaders, members of the governor’s staff and members of the Legislature’s Appropriations Committee spent most of Monday in closed-door sessions attempting to find some middle ground on the key stumbling block to negotiations: additional money to pay down debt owed by the state to Maine hospitals.

Mary Mayhew, a spokesman for the Maine Hospital Association, said her organization is looking for increased funding beyond the nearly $13 million included in Gov. John Baldacci’s original supplemental budget proposal.

“This money is for bills owed to hospitals for care that has already been provided,” Mayhew said. “And also to try and address the problem going forward by increasing hospital payments to reflect the volume of patients that are currently being cared for.”

Mayhew estimates that the outstanding bills and projected state needs over the next year equal about $360 million in state and federal funds. The state’s share alone, she said, approximates $100 million. Late Monday afternoon, lawmakers from both parties were looking for a total hospital allocation of somewhere between $14 million and $18 million.

“So there’s more that needs to be done,” Mayhew said.

“The Democrats have indicated that they’re willing to put more money [aside for the hospitals] and we’ve identified sources for them which they have declined, so at this moment I’m not convinced that they actually have that commitment,” said House GOP leader David Bowles of Sanford. “We don’t understand why the Democrats are not more forthcoming.”

In other budget developments, it appeared Monday that Baldacci’s proposed $25 million transportation bond was being thrown overboard by both Republicans – who never wanted it in the first place – and Democrats, who viewed their decision as a good-faith gesture to reach consensus with the GOP. Instead, the two sides want to take about $15 million out of the state’s surplus to pay for road and bridge repairs.

Meeting with reporters Monday, House Speaker John Richardson, D-Portland, and Senate President Beth Edmonds, D-Freeport, were optimistic over the budget’s outcome, which they said should easily gain two-thirds support in the House and Senate by April 1.

“All of the outstanding issues are things that everyone really and truly should agree to,” Edmonds said. “This is not fancy stuff. This is paying the bills, fuel increases and continuing access to health care and education.”

Emphasizing that the Appropriations Committee had agreed to place $29 million of the state’s surplus into the Budget Stabilization Fund to bring the account’s balance to $100 million, Richardson said there were no major areas remaining that were not agreed to; only the final amounts that would be allocated remained in dispute.

“Most of the 10 percent of the budget that remains outstanding has already been agreed to,” Richardson said. “It’s really a function for us to allow the committee to run through any amendments and resolve the last remaining issues.”

Early Monday evening the committee still had not returned to public session, with members attempting to decide which budget amendments should be offered and which should be discarded. Any amendment with too large a price tag threatens to scuttle the progress the panel has made thus far.

Budget negotiators were also reportedly close to resolving a dispute involving the governor’s plan to increase teachers’ minimum salaries to $30,000 a year. The $4 million needed to pay for the initiative would be rolled into the state-municipal school funding formula and become part of the $42 million included in the budget to bring state funding of local education up to 50 percent. Republicans would rather assist teachers through student loan forgiveness programs or increased retirement benefits. They objected to the salary increase because of its additional cost to municipalities, which would have to shoulder part of the burden.

While it is conceivable that the proposed increase could be explored within a separate bill by the Legislature, Richardson said the program’s deletion would not help balance the budget. Instead, he said the $4 million for the program would be reallocated for other education-related expenses.

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