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Governor and Legislature Seem to Agree Over Rainy Day Fund Replenishment
03/07/2014   Reported By: A.J. Higgins

The LePage administration today came forth with its plan to replenish the state's so-called "Rainy Day Fund," which lawmakers had tapped to restore funding to Maine's city's and towns. The governor wants the panel to approve the allocation of more than $21 million from an education spending account and from state retiree health insurance programs. Democrats on the Legislature's Appropriations Committee seem receptive to the plan, which would prompt the release of more than $100 million in voter-approved bonds which the governor had threatened to withhold.

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Rainy Day Fund Replenishment Debated Listen
 Duration:
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Maybe retired state employees are adopting healthier lifestyles. Or maybe a number cruncher just goofed. Either way, insurance company analysts charged with recommending how much money state should set aside to cover the estimated costs of its retiree health insurance program seem to have overestimated and that's good news for Sawin Millett, the cief of finance for the LePage administration.

"So here we are having over-collected by $2.4 million in the current year and projected to over-collect by $8.954 million in the coming year," Millett said.

In addition to the $10 million from the retiree insurance program, the administration has also found a little more than $10 million in so-called "unencumbered funds" from state's General Purpose Aid Account that funnels local education money back to Maine school districts.
 

The Rainy Day Fund dispute has been a volatile issue between lawmakers, who wanted to prevent local property tax increases, and LePage, who has called the revenue sharing fund "welfare for cities and towns." After Democrats and Republicans united to draw down the Rainy Day Fund as a fix, LePage retaliated by threatening not to issue more than $100 million in state infrastructure bonds unless the money was restored.

Education Commissioner Jim Rier told the committee that the proposed transfer to the Rainy Day Fund would have no impact on the money school districts will receive for the balance of this fiscal year or next.

"These changes and being able to provide the $10.1 million and is part of the bill doesn't effect anything that flows to local school units, they are receiving and will continue to to the amount that you budgeted last June 27," Rier said.

Democrats on the panel appear receptive the plan.

"I for one welcome this submission by the governor's budget submission and I think it really represents in my mind, the importance of us all coming together in this room and working together," said Representative, Mike Carey (D-Lewiston).

Carey has been a fierce critic of the LePage administration's refusal, until now at least, to engage the Legislature on changes to the current budget. The extended olive branch was clearly appreciated by Republican members of the committee and supported by Democrats who did not have access to the information from state retiree insurance savings projections.

"These are actuarial projections that a non-executive branch would not have knowledge of or be able to do, so I think this really represents nicely the importance of us working together," Carey said.

Democrats were not happy with the fact that the governor had entered the budget discussion so late in the game Rep. Linda Sanborn (D-Gorham) and other Democrats on the panel, are disappointed that LePage had threatened to withhold his support for state bonds unless lawmakers agreed to his plan to replenish the Rainy Day Fund to its former $60 million level.

"There again is no reason why the governor cannot release the bonds right now whether without us deciding how this $21 million dollars is best used," Sanborn said.

Republicans soon tired of Democrats criticism of the governor's threat. Rep. Kathleen Chase (R-Wells) joined other GOP members in urging the majority party to move on.

"Regardless of whatever else the issues that surrounds it in a political world, this is a reasonable solution for a huge concern and for having a good position moving forward dealing with bonds," Chase said.

 

The administration would like to have a vote on its Rainy Day Fund bill as soon as possible, but Democrats on the panel would not commit to that request and may wish to explore other ways to address the fund's replenishment.

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