Finding the money: Maine Medicaid expansion could cost schools, public safety, corrections dearly

In the wake of the 2017 referendum to expand Medicaid, a major debate around funding the Medicaid expansion has erupted.

At issue is the estimated $54 million per year projected cost to Maine taxpayers, which is roughly 10% of the overall cost of the expansion, barring any cost increases other states have seen.

Governor LePage and many Republicans have said that the funding needs to be appropriated by the Maine Legislature before the program can be implemented, a standard practice for state spending initiatives. However, some Democrats have decried the Republican insistence that the expansion be paid for.

Money tree

Maine Examiner decided to take a look at some scenarios where Democrats could find $54 million in the state budget while complying with Governor LePage’s insistence that the funding not be taken from funding for programs for the elderly or disabled, not raise taxes on Maine people, and not raid Maine’s rainy day fund.

School Funding:

One of the largest pots of money in the state budget where Democrats insistent on funding Medicaid expansion could find the funds is in state funding to local education.

According to the Maine Department of Education, Maine taxpayers will provide support of about $6,600 per elementary school student and about $7,100 per secondary school student through Maine’s EPS (Essential Programs and Services) formula.

Maine’s Medicaid expansion funding of $54 million could be provided by eliminating funding for about 8,200 elementary school students, or 7,600 secondary school students.

Viewed another way, Maine lawmakers could simply cut the overall state funding rate by $54 million per year, a $108 million cut in the two-year state budget. This amounts to an approximately 5% cut to state education funding.

Options to fund Medicaid expansion:

Cut funding for 8,200 elementary school students, or
Cut funding for 7,600 secondary school students, or
Cut state funding to local schools by 5% across the board.

Public Safety:

Maine’s entire public safety spending, according to Maine’s 2016 annual financial report, is about $109 million.

In order to find $54 million per year in Maine’s public safety budget to fund Medicaid expansion, state lawmakers would have to essentially cut Maine’s public safety budget in half across the board, including massive cuts to the spending levels described below:

State Police ($69M spending FY16)

Fire Marshall ($5.1M spending FY16)

Maine Drug Enforcement Agency ($5M spending FY16)

Highway Safety ($4.4M spending FY16)

Gambling Control ($7.9M spending FY16)

Capitol Police ($1.4M spending FY16)

Consolidated Emergency Communications ($6.2M spending FY16)

The largest portion of Maine’s public safety budget is the Maine State Police, at $69 million of the $109 million total in fiscal year 2016. It is unlikely lawmakers would be willing to fund Medicaid expansion with extreme cuts to Maine’s premiere law enforcement agency.

This leaves the unsavory prospect of virtually eliminating all other Maine public safety funding to free up funds for Medicaid expansion. If the funding for all the departments listed above except Maine State Police were redirected to Medicaid expansion, eliminating the departments completely, lawmakers would free up about $30 million.

End result: Maine State Police would need to be cut by 35% and Maine people see all other state public safety agencies eliminated.

Corrections:

Is Maine’s Department of Corrections a potential source of available funds for Medicaid expansion?

If massive cuts to state correctional facilities is a possibility, the answer is yes.

By eliminating:

Bolduc Correctional Facility, Warren – 220 minimum security prisoners ($5.4M FY16)

Charleston Correctional Facility, Charleston – 210 higher security male prisoners ($5.2M FY16)

County Jail Support Funding – Support to Maine’s County Jails ($15.8M FY16)

Maine Correctional Center, South Windham – Multi-purpose and prime reception center for DOC ($23.9M FY16)

Downeast Correctional Facility, Machiasport – 150 medium security prisoners ($4.8M FY16)

Maine lawmakers could free up enough funding to expand Medicaid.

While it is unlikely lawmakers will dare to propose any of the above scenarios, it certainly provides a perspective on the priorities state lawmakers must set when it comes to spending state tax dollars when a huge new spending initiative crashes into the State House at the start of the second half of the Legislative session.

 

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