Budget writers OK hospital pay

AUGUSTA – Legislative budget writers Thursday cemented a deal struck earlier in the week on a $170 million supplemental budget package of spending adjustments, transferring about $4 million in surplus to boost state payments to hospitals for past services.

The increase, drawing on unspent funds within a homestead property tax exemption reimbursement program, brought new state money earmarked for hospital settlements to about $17 million, which could be tripled by federal matches.

Key elements of the package include close to $42 million in local school aid and $29 million in special reserve funds. More than $19 million was earmarked for prescription drug program support.

Democratic and Republican negotiators on the Appropriations Committee expressed satisfaction with the outcome, and Gov. John Baldacci said that, pending enactment by the full Legislature next week and a final review, he could sign the measure.

“It felt like a group effort. … The budget reflects both parties,” said Rep. Joseph Brannigan, D-Portland, the House committee chairman.

Still facing separate treatment was a Baldacci proposal for increases in starting salaries for teachers.

“It flies on its own if it flies at all, and it would have to have a funding source,” said Rep. Sawin Millett, R-Waterford.

Baldacci budget chief Rebecca Wyke said some money could be available in existing set-asides for local schools.

“I believe that we can do a phased-in version,” she said.

The package would bring total General Fund reserves up to about $100 million. Additional money for local schools is meant to boost the state share of education costs to about 50 percent.

Earlier this month, Baldacci proposed $25 million in new borrowing to bolster funding for highway projects in Maine after a gubernatorial task force pegged the need for funding at $90 million.

Republican resistance, however, prompted Democrats to reluctantly scrap the bonding plan and replace it with $15 million in cash for road and bridge work.

As legislative analysts continued a decimal point review of individual budget panel actions, Millett said it appeared that committee voting had produced a small balance – “a few coins” – of less than $1 million.

Baldacci administration officials on Jan. 19 outlined a combined package of spending and savings worth $178 million that was designed to adjust planned expenditures over the last half of the two-year budget cycle.

At the time, lawmakers were counting on $164 million in new revenue. More recently, that potential surplus was reduced by about $14 million.

“It feels good to go back to making these bipartisan budgets,” said Sen. Peggy Rotundo, D-Lewiston, the Appropriations Committee Senate chairwoman.

Republican Sen. Richard Nass of Acton said GOP panelists had sought to make education-related funding a high priority but came at it from a different angle than the Democrats.

The budget package includes nearly $1 million to start up a new business court and $1.2 million for the Clean Election fund. More than $2.6 million was voted in to cover services required by an Augusta Mental Health Institute consent decree.