Good News for State Budget

Bangor Daily News Feb. 19, 2008 By Mal Leary, Capitol News Service AUGUSTA, Maine — After getting a lot of bad news recently from the federal government, the state has received some good news — to the tune of $12 million — that will help ease the difficult task of balancing the state budget, according to the Baldacci administration. Health and Human Services Commissioner Brenda Harvey said the Centers for Medicaid Services are allowing the state to file a plan to comply with recently announced Medicaid rule changes instead of requiring that they take effect immediately. The delay until July 1 in the rule implementation involving case management will reduce the cost to the state’s General Fund by about $12 million this fiscal year, Harvey said. "It provides a little more time for the providers to work with us and adjust their systems," she said. "But some rule changes will take effect immediately. For example, there are some things that simply are unallowable — like billing for child welfare or billing for adult protective services, probation and parole — that have an impact on the General Fund, and we are putting those in effect starting March 1." In an interview Friday, Gov. John Baldacci stressed that balancing the budget will be hard — even as he welcomed the rule implementation delay from CMS. "We will get it done, but it won’t be easy," he said. "There are a lot of moving parts to the budget, and this good news from CMS will help." Harvey noted that until CMS acts on Maine’s compliance plan, the state will not know for sure if it will have until July 1 to implement the new rules, which require billing in 15-minute increments by providers. She said both the state and the providers need to change computer programming to change the billing procedure. In an e-mail to all targeted case management providers on Friday, Harvey said: "What this means for you is that you can continue to deliver services until we give you reasonable notice exactly how to transition or end what you do. I know a number of you were about to provide notices to clients and staff." In commenting a few weeks ago on the pending federal changes in Medicaid rules, Baldacci administration officials said the changes could cost the state $45 million through the next 16 months. They also said community losses, including for nonprofit health care providers and schools, could total $141 million over the same period. Baldacci said Friday that while the rule implementation delay will help, the state still faces a huge budgetary impact from the Medicaid changes and he is working with other governors and the state’s congressional delegation to get a delay in all of the rule changes now set for July 1 — or their outright repeal. "This is an issue affecting many states and there is an effort under way to [get] the Congress to act again on this," the governor said. Congress had approved a year’s delay in the rules last December as part of the State Children’s Health Insurance Program legislation. But the SCHIP bill was vetoed by President Bush, and his veto was sustained. Baldacci said the Medicaid rule changes and the softening economy are two causes of the state’s budgetary problems. He said his proposed supplemental budget addresses the currently identified $95 million revenue shortfall, but now the scope of the need is about $99 million more. "This is all still evolving," he said in the interview. "We don’t know what the revenue picture is yet." The state’s revenue forecasting group meets next week to discuss adjustments to revenue estimates, which some lawmakers now believe will be reduced by about $50 million. Baldacci said there are two parallel efforts to identify possible budget cuts that are confusing to the public — and to lawmakers. The Appropriations Committee sent a memorandum to legislative committees seeking ideas for budget cuts that would add up to $99 million, and Finance Commissioner Rebecca Wyke sent a memo asking agencies to scrutinize all of their programs and prioritize them. "Just because they are looking at something does not mean we are going to propose it," Baldacci said. "Yes, the commissioner of corrections looked at closing Longview [a youth correctional facility in South Portland], but that is not going to happen. There are a lot of things being looked at that won’t be part of the solution, once we know what the target is." Some legislative committees expressed concern — and even anger — when several commissioners said last week that they were not in a position to discuss what ideas they had given to the governor. But Baldacci himself expressed frustration about some of the reports the legislative committees are issuing. "All we are getting now is additional requests — more money, more positions, more projects," he said. "Wait a minute. We got to take care of the red ink first." Work on developing the state budget package to address the revenue shortfall slowed last week and will proceed slowly this week, as some committees are not meeting at all. The Appropriations Committee is meeting, and Sen. Peggy Rotundo, D-Lewiston, the panel’s co-chairman, said members would be pleased to hear some good news from the federal government. "We’ll take any good news we can get," she said. "We haven’t had much of that this year." Rep. Sawin Millett, R-Waterford, one of the lead GOP members of the committee, agreed. But he said the task facing the committee is still huge and still a moving target. "We’re still going to have a challenge," he said.