Republican radio address

For the weekend of February 6-7, 2010

Greetings, this is Ralph Sarty, state representative from Denmark.

Maine is on the verge of historic spending cuts to keep the state budget in balance. The recession continues to erode tax revenues, and the governor has stated that he won’t accept a tax increase as a way out of this mess. The cuts the Legislature must make total about $440 million.

When the governor announced that figure in December, in his supplemental budget, he said we all will have to make sacrifices in this new era of fiscal austerity. Two of the areas targeted for deep cuts will affect all of us one way or another. First, Maine schools face a $92 million reduction in state aid next year, and funding levels are expected to remain flat through 2013. That’s a significant cut, and obviously something has to give, whether it’s higher property taxes, layoffs of teachers, bigger classes or, in some cases, school closings. Educators are nervous about job security; and so are the many support workers in the school system, from custodians to bus drivers.

Second, the budget changes hit our municipalities hard, with major reductions in revenue sharing and other state subsidies, such as the Tree Growth Program. Towns and cities have limited options in dealing with these cuts – all of them bad. They can trim payrolls, reduce services or raise taxes.

When it comes to school and municipal budgets, one of the biggest cost items is health insurance. If there were a way to lower that expense, the pressure on budgets could be reduced, like lowering the air pressure in an overinflated tire. The threat of layoffs would be alleviated and the pressure to jack up property taxes would be less intense.

I think there is a way to do this, and I filed a bill this week to start the process of freeing up school districts and municipalities to seek health coverage at more reasonable rates. In a nutshell, it would give them the flexibility to self-insure as stand-alone units or team up with other school districts and towns and self-insure as a group. That fits with the governor’s consolidation strategy. The proposal also would allow them to buy group policies from insurance companies operating in other states. Nothing in the bill changes health benefits or forces a school district or a municipality to do anything. It simply removes the barriers that have denied them the opportunity to look for more affordable rates. If they want to take advantage of an option to save money, they would be free to do so.

It’s no secret that Maine has some of the highest health insurance prices in the nation. We have been hobbled by damaging mandates that afflict few other states. Those mandates, in turn, have driven all but a few insurance carriers out of the state, virtually destroying a competitive free market. New Hampshire has 11 companies selling health insurance, Connecticut has nine and Massachusetts has 21. People in those states have many more options and are not subjected to the kind of mandates that have driven our costs through the roof.

Unfortunately, the Legislature refuses to lift this albatross off our necks. Last year, a Republican bill would have allowed Mainers to buy health coverage from companies out of state, where rates can be dramatically lower. It would have cleared away the bizarre rules and regulations that keep us shackled to a failed system. It would have saved Maine families thousands of dollars a year in the cost of individual insurance. The bill was hugely popular around the state, but not in the State House. The Legislature killed it, mostly along party lines, but the vote was close.

Since then, our economic situation has deteriorated even further. The impact of budget cuts on school systems and town governments will be severe. My hope is that legislators now understand that this economic emergency requires fresh, creative thinking to prevent more layoffs and economic hardship. This is a time to think inside the box, outside the box, and on top of the box. This bill on health insurance choice eliminates the box and liberates the leaders of our towns and schools to act in the best interest of their employees and the local taxpayers who fund their operations.

The bill has a long way to go. It must first be accepted by the Legislative Council. It would then run the full gauntlet of committee hearings. Various complexities would arise from legislators and lobbyists fighting to preserve the status quo, regardless of the fallout in lost jobs and shattered lives. We have hit a turning point in Maine, and I hope we choose our direction wisely.

This is State Representative Ralph Sarty. Thank you very much for listening.

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