He talks out of both sides of his mouth. Now, in 2005 he is purposing tax hikes!
Baldacci reaffirms no tax hike stance
Governor
clarifies Tuesday remarks
A. J. HIGGINS, OF
THE NEWS STAFF
Last updated: Thursday, March 18, 2004
AUGUSTA - After indicating additional taxes could be considered to offset a $128 million Medicaid shortfall, Gov. John E. Baldacci clarified his position Wednesday and vowed to veto any supplemental budget containing new tax increases.In the aftermath of Monday's angry public hearing that drew more than 1,000 people opposed to Medicaid cuts in the current $160 million supplemental budget proposal, Baldacci told reporters Tuesday he would be "willing to listen" to arguments for tax increases. But the governor prefaced his remarks by stating he would engage in tax talks only if more money were needed to balance the budget after the state had reduced its administrative costs for delivering Medicaid services.
When three Maine newspapers carried front-page headlines Wednesday declaring the governor would not rule out tax increases to balance the budget, Baldacci called in the State House press corps to clarify his position.
"I need to be very clear here that in terms of resolving this supplemental budget that it does not require and will not require tax increases to balance it," Baldacci said. "I was not as clear in my discussions with [reporters] yesterday as I should have been."
Later in the day during a call-in radio show, the governor threatened to veto any supplemental budget that contained a tax increase even as some lawmakers proposed to offset his Medicaid cuts by raising the sales tax or taxes on other items such as cigarettes or liquor sales.
Republicans in the Senate and House were astonished that the governor would threaten to veto a supplemental budget which they maintain already contains nearly $12 million in new fees, surcharges or taxes. The increased revenues are derived in part from a doubling of the hospital tax, an expansion of that tax to private nonmedical institutions, and increasing telephone fees by raising Enhanced-911 charges.
"It's ridiculous that [Baldacci] is even saying that he's not raising taxes, and the fact that the media is repeating it is also wrong," said House GOP leader Rep. Joe Bruno of Raymond. "He's already raised them. We need leadership on this budget and we can't negotiate when we don't know what the message is. It's just crazy."
The governor deferred questions about general definitions of taxes, fees and surcharges to his finance director, Rebecca Wyke. She said the administration has never considered health-related taxes that draw down matching federal funds to be in the same category as sales or income tax increases. Both are opposed by the administration.
Baldacci said Wednesday the additional E-911 money would be dedicated to criminal background checks and other public safety expenses, but he acknowledged the money would be distributed to the General Fund, where it can be spent as the Legislature sees fit, rather than dedicated to specific accounts.
The governor's "clarification" on his tax remarks was important because Baldacci made his opposition to imposing new taxes a key plank of his election campaign in 2002 and also took great effort to close a $1.2 billion budget shortfall last year without including additional taxes.
The most recent supplemental budget proposal is designed to address a shortfall in the $2.6 billion state budget cycle that begins July 1. As presented, it would eliminate Medicaid funding for adults enrolled in brain-injury rehabilitation programs, dental care and 13 other services the state now covers to save a little more than $9 million.
Baldacci said he met with staff Wednesday morning and concluded that his targeted Medicaid cuts could be mitigated by finding cost-saving reductions at the provider level and by working with the Legislature to identify additional funding sources. But he also stated he would "draw a line in the sand" at the $9 million mark and insisted health care providers would have to re-examine the costs they expected the state to cover."We have to change the way these programs are administered," Baldacci said. "We do not have control of these programs, and in some areas, they're controlled by the providers. ... We need to be more cost-conscious, getting our spending under control while still providing the services," the governor said.
Emphasizing it would have little or no impact on the supplemental budget request, Baldacci said he would be willing to defer implementation of the Medicaid portion of the Dirigo Health Plan that would expand program eligibility to 31,000 additional Mainers effective July 1. Both the governor and Trish Riley, his chief health policy adviser, said the administration would entertain GOP requests to delay the program expansion - but not the Dirigo program - as long as they were held within the context of overall budget negotiations.
"All we asked in the last supplemental budget that was passed by majority vote was if we could at least talk about the Dirigo expansion," Bruno said, "and we were told it was completely off the table. And that God should punish us for even bringing it up. [The governor] has got to figure out what he's willing to do and what he's willing to talk about."