Hospital provision, cuts in aid cause split in state budget battle

AUGUSTA – Majority Democrats in the House of Representatives turned back a Republican budget-balancing measure Thursday and advanced their own with a hospital tax-and-match provision that was not welcomed by the Baldacci administration.

The Senate partially followed suit in preliminary voting as legislative debate began in earnest on competing ways to close a $190 million gap, but then took a new tack that left the chambers seriously at odds.

Speaker Glenn Cummings, D-Portland, predicted a hostile reaction in the House to the alternative budget measure winning Senate backing that would curb aid to certain childless adults as part of an effort to jettison a $9 million boost in unclaimed property revenue related to stock market holdings that Democrats favored and Republicans opposed.

“This is a very, very big detour from what the Appropriations Committee and the House have supported,” Cummings said.

For his part, House Minority Leader Josh Tardy, R-Newport, said he saw pluses and minuses.

A second day of debate and voting was set for today.

The initial focus Thursday was on the House but given the large Democratic edge there, many eyes were already on the Senate, split in Democratic favor by only 18-17.

“I’m a realist,” Republican Rep. Sawin Millett of Waterford, a ranking Appropriations Committee member, said in acknowledging the Democrats’ numerical superiority even while arguing the GOP case for spending restraint.

The Republican budget package was defeated in the House by a vote of 89-56, virtually mirroring party lines. Subsequently, the Democratic proposal won all-but-final approval by 81-60 after nearly five hours of debate.

The Democratic House majority, under attack from Republicans and divided internally, scrapped much of the realignment for the state Office of Program Evaluation and Government Accountability that critics charged would essentially gut the watchdog agency.

“OPEGA performs an important function, but in the current economic climate all Maine departments are being asked to do more with less,” House Majority Leader Hannah Pingree, D-North Haven, said in a statement.

“We’re forced to cut $65 million from health and human services, and make other difficult cuts to education and virtually every state agency,” Pingree said.

Baldacci said Thursday his guiding principles remained resisting taxes and avoiding use of so-called rainy day reserves to cover the shortfall. He also indicated he would be willing to use some parliamentary maneuvering to help win enactment of the Democratic plan but would still like to see Democrats and Republicans come together.

Democratic House Whip Sean Faircloth of Bangor expressed optimism over the outcome in his chamber, where some majority party members had voiced reservations over the Democratic package and a total of 30 amendments had been filed.

“Here? Yes, I think so,” he said when asked if Democrats were holding firm. As for the Senate, he said, “You tell me.”

In the end, the House considered 16 amendments from the floor and rejected all but two, both offered by Appropriations Committee members.

Short of winning two-thirds majorities in both chambers, which would allow program reductions to take effect right away, lawmakers have to act by March 31 to ensure a revised state spending plan is in place by June 30 – the last day of the fiscal year.

Facing dwindling General Fund revenue, Baldacci issued a $38 million curtailment order on Dec. 18, 2007, and has ordered a new curtailment order to slow the rate of state spending to be drawn up.

Highlighting partisan differences, Democrats focused on what they said was Republican unwillingness to maintain health care coverage for some 22,000 Mainers, some who are the parents of children in the federally supported State Children’s Health Insurance Program and others who are childless adults within certain income guidelines.

Republicans opposed a Democratic plan to raise about $9 million through the expedited sale of unclaimed property. Both parties appeared willing to accept a $34.1 million reduction in state aid to local schools advanced by the governor.

Officials said about 20 amendments had been filed in the Senate, where the Republican budget-balancing package was rejected 20-15 as members worked into the night.

A flash point between the parties remained a Democratic-backed adjustment in the base year of a tax on net hospital revenue worth $11 million that could offset a proposed reduction in reimbursements for hospital-based physicians.

Earlier this month, Baldacci proposed cutting $27.5 million from the human services budget. The governor already had put forth $65.4 million in human services cuts in January before a budget shortfall initially pegged at $95 million doubled to $190 million.