AUGUSTA – Gov. Angus King has joined with other governors from around the country in asking Congress to consider increasing the federal share of Medicaid payments to states as part of the economic stimulus package.

“This proposal would be a significant stimulus to the economy since it would offset a portion of the $15 billion to $30 billion shortfall caused by the combination of declining revenues and state balanced budget requirements,” the governors wrote in a letter to key lawmakers. “This also would assist states in covering the estimated additional 4 million individuals who could be added to the Medicaid rolls due to the slowdown in the economy.”

Nearly all states are seeing a decline in revenues. Maine is expecting a revenue shortfall of about $100 million in the fiscal year that ends to next June 30.

“Every percentage point change means $15 million to the state,” said Human Services Commissioner Kevin Concannon on Wednesday. “What is being proposed would have a very significant impact here in Maine.”

The National Governor’s Association is proposing that Congress increase federal funding to each state for Medicaid on a temporary basis by 11/2 to 2 percentage points. Maine now gets nearly 67 percent of Medicaid costs paid by the federal government. The NGA also is proposing an additional increase of up to 2 percent for states with above-average unemployment rates. Maine’s unemployment rate is now below the nationwide average.

“This is a very good way to get money to the states through a program that is already in place,” Concannon said. “And this has huge implications in Maine, a huge economic impact.”

King and the other governors warned that states likely will have to balance their budgets with decreased revenues. Some states will have to consider cuts in programs while others will have to entertain tax increases to offset the anticipated revenue losses.

Another concern of the governors is that some economic stimulus provisions under consideration at the federal level are tax cuts that actually would reduce state revenues because many states, including Maine, piggyback their tax collections on the federal system.

If states are forced to cut programs or raise taxes, University of Maine economics professor Ralph Townsend warns that it could lessen the economic stimulus impact, the reason for the federal legislation in the first place.

“We don’t want the state reducing spending when the federal government is trying to get us to spend more,” he said. “That would be counterproductive and lessen the stimulus effect.”

Other analysts, including State Economist Laurie LaChance, agreed. LaChance said if Congress does not provide assistance to the states, some could end up taking steps that would hurt the federal efforts to stimulate the economy.

“It’s like putting one foot on the gas and one on the brakes,” she said.

Meanwhile, the future of the stimulus package is best described as murky. The House has passed a GOP-crafted measure that even Republicans in the Senate say is unacceptable. The Senate is debating a Democratic plan, but it is unlikely to receive the 60 votes needed under Senate rules to be adopted. The Senate is now made up of 50 Democrats, 49 Republicans and one independent.

Both of Maine’s Republican senators are pushing a compromise plan announced Wednesday evening by a coalition of centrist senators. Sen. Olympia Snowe said it is time for all members of Congress to put aside partisan differences and put the national interest first.

“While it may not reflect everyone’s first choice, it is clear that neither side can get everything it wants in a stimulus package and both sides will have to compromise to get a bill signed into law this year,” she said. “Achieving bipartisan consensus on an economic stimulus package is not only possible but essential. While we may disagree on which proposals constitute stimulus, we should all agree that time is of the essence and we need to put our partisan differences aside.”

The centrist compromise provides several tax breaks aimed at stimulating the economy, but not at the same levels adopted by the House. It also provides some direct cash payments to lower-income Americans. Also among the provisions is a grant plan providing the states with $5 billion to help pay for homeland security costs.

Sen. Susan Collins said the plan includes her proposal to provide extended benefits to unemployed workers who have exhausted their 26 weeks of regular benefits.

“This bipartisan proposal uniquely combines two critical elements – fairness, in that all states would qualify, and efficiency, in that emergency unemployment compensation would be distributed according to requirements and rules already in place,” Collins said.

Collins’ proposal differs from that of the Bush administration by having additional benefits begin immediately in all states. It is estimated that the Collins bill would provide more than $90 million in additional unemployment compensation to dislocated workers in Maine.

U.S. Rep. John Baldacci, D-Maine, doesn’t believe that any compromise will be considered by the House this week before lawmakers break for the Thanksgiving recess.

“I have been told we will be back on the 27th,” he said, “and I don’t see any action on the stimulus until then. I wish there would be action now, but the only action I see this week is on the airport security legislation.”

Baldacci said he does support the governors’ Medicaid proposal and hopes it will be considered at the end of the month or in December in the conference committee that will be needed to resolve differences between the House and Senate.