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A House Republican press conference held in May at the State House to urge passage of the welfare debt payoff plan.
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For Immediate Release

Date: 09/04/13

House Republicans Praise Sale of Liquor Revenue Bond

Welfare debt payoff positive for Maine's economy, reputation

AUGUSTA - Maine House Republicans today praised the sale, announced by the office of Governor Paul LePage, of the liquor revenue bond that will be used to pay off Maine's $484 million in outstanding welfare bills owed to hospitals throughout the state.

"This money will now go out into Maine's private sector economy, where it is needed the most," said House Republican Leader Ken Fredette of Newport. "I'm very pleased that we are one step closer to getting checks in the hands of Maine employers that are owed millions in unpaid welfare bills by the state."

Pursuant to legislation introduced by Gov. LePage and passed by the legislature this summer, the Maine Municipal Bond Bank sold a $220 million revenue bond collateralized by the state's liquor business, which was up for a renegotiated contract with private distributors this year. Hospitals owed payments by Maine's Medicaid system, or MaineCare, will receive $183.5 million from the state after the bond sale, triggering a $305 million federal match to pay off the outstanding debt in full.

"The beauty of this plan was that it took the state's liquor revenue out of the hands of future legislatures and dedicated it to paying off Maine's debts," said Assistant House Republican Leader Alex Willette of Mapleton. "Democratic legislative majorities over the years have made lots of bad decisions with the state's finances, so I'm glad to see us take this major step toward fiscal responsibility."

The welfare debt payoff plan was the result of months of political wrangling. Democrats first opposed it, and then introduced a plan of their own. They claimed the Governor's plan was unconstitutional, but their own attorney general disagreed. They claimed their liquor contract bill was more profitable, but the legislature's nonpartisan budget office disagreed. Democrats then tried to attach the Governor's plan to their own bill to expand the very welfare program that created the debt before finally agreeing to pass the original proposal unencumbered.

"Those who don't study history are doomed to repeat its mistakes, and paying off our old Medicaid bills should serve as a reminder of how fiscally disastrous our medical welfare program can be when expanded," added Fredette. "Government overspending has very real consequences for future generations and for everyone who pays taxes."

The Republican leaders added that falling health insurance premiums in the wake of the state's 2011 health insurance reform law, in addition to federal subsidies for individuals buying private health insurance beginning in 2014, offer real alternatives to expanding Maine's broken medical welfare program.

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Contact:
David Sorensen
Maine House Republicans
Tel: (207) 205-7793