Governor Forced to Sign Executive Order to Pay for Legislature’s Unfunded Bills

June 27, 2016

For Immediate Release: Monday, June 27, 2016
Contact: Adrienne Bennett, Press Secretary, 207-287-2531

AUGUSTA – Governor Paul R. LePage today signed an Executive Order authorizing the Executive Branch to distribute funding for several bills, which the Legislature failed to pay for prior to its adjournment.

“Unfortunately, the Legislature’s lack of fiscal management is going to place unnecessary strain on various programs and salary negotiating processes within the Executive Branch,” the Governor said. “We are going to do our best to mitigate the impacts of this unfunded legislation with available resources. Maine law demands that the budget be balanced. Since Democratic leadership refuses to fund these bills, I have taken action by issuing an executive order to ensure government is being funded in a fiscally responsible manner.”

Last week, Governor LePage met with Legislative leadership to discuss where they expected the Executive Branch to identify money to pay for four bills—three of which do not have funding sources. Democrat Speaker of the House Mark Eves told Governor LePage during the meeting that legislators would not be coming back to Augusta to deal with the unfunded mandates. If the Governor did call a special session, Eves stated they would “adjourn immediately.”

The related-bills are:

LD 1465 Resolve, To Require the Department of Health and Human Services To Conduct a Study of Ambulance Services. This bill requires that DHHS contract with a third-party consultant to conduct a rate study of ambulance services and assess the feasibility of reimbursing for community paramedicine services, but doesn’t appropriate any money to fund it.

LD 1552 An Act To Reduce Morbidity and Mortality Related to Injected Drugs. This bill creates a new needle exchange program for drug users but the Legislature stripped the needed $75,000 in funding.

LD 1614 Resolve, To Provide Funding for the County Jail Operations Fund. The LePage administration identified a source of funding to cover overspending at county jails, contingent on the Legislature lifting the property tax cap that restricts how much the counties can raise from municipalities to address future shortfalls. The Legislature took the money but scrapped the language to lift the property tax cap.

LD 1645 An Act To Address Employee Recruitment and Retention Issues at State Mental Health Institutions. Continued depletion of the Salary Plan to fund arbitrary wage increases to some employees inhibits the Executive Branch’s ability to negotiate in good faith during the next round of collective bargaining with all unionized state employees.

Per Executive Order, Governor LePage directs the Department of Health and Human Services to undertake any of the following actions or a combination of the following actions to fund the implementation of the aforementioned legislation in a fiscally prudent manner:

  1. Transfer any remaining balances within the Low-Cost Drugs to Maine’s Elderly Program;

  2. Transfer any funding that can be generated by a redistribution of a Fund for a Healthy Maine; and

  3. Transfer any savings that can be created by actively managing personal services at State mental health institutions, which includes implementing a hiring freeze and other cost-saving measures Department-wide.

These actions, which are designed to assuage the budget impacts of unfunded legislative mandates and legislative misallocations, will remain in effect through the remainder of Fiscal Year 2016-17. However, the Legislature does have the sole authority to act at any time to provide appropriate funding for these initiatives. The effective date of this Executive Order is June 30, 2016.
The Executive Order language is as follows:

AN ORDER REGARDING UNFUNDED LEGISLATIVE MANDATES AND LEGISLATIVE MISALLOCATIONS

WHEREAS, the Constitution of the State of Maine requires a balanced budget; and

WHEREAS, the Legislature typically complies with this balanced budget requirement by adopting and following budget procedures to prevent the enactment of unfunded mandates on State agencies and to prevent the misallocation of funds by ensuring funding is drawn from relevant accounts; and

WHEREAS, when the Legislature requires a State agency to undertake some work or enter into a contract, resources are inevitably expended; and

WHEREAS, from time to time, the Legislature ignores the principles of sound budgeting by removing fiscal notes and directing State agencies to “absorb costs within existing resources;” and

WHEREAS, from time to time, the Legislature also ignores the principles of sound budgeting by directing that new spending be offset via funds for wholly unrelated purposes, disrupting the operations of State government that rely on those accounts; and

WHEREAS, the Legislature enacted LD 1552, An Act to Reduce Morbidity and Mortality Related to Injected Drugs, legislation that requires $75,000 annually to implement a needle exchange program for drug addicts without any funding, but merely the requirement that the Maine Center for Disease Control and Prevention “absorb” the costs of this mandate “within existing budgeted resources;” and

WHEREAS, the Legislature enacted LD 1465, Resolve, to Require the Department of Health and Human Services to Conduct a Study of Ambulance Services, legislation that requires the Department of Health and Human Services to contract with a third-party consultant at the cost of $75,000 to $100,000 without providing any funding to pay this contract; and

WHEREAS, the Legislature enacted LD 1645, An Act to Address Employee Recruitment and Retention Issues at State Mental Health Institutions, legislation that mandates pay raises for certain employees at State mental health facilities and offsets these costs by authorizing a transfer of funds from the General Fund Salary Plan; and

WHEREAS, a further reduction of funding for the General Fund Salary Plan would negatively impact the Executive Branch’s ability to enter into future collective bargaining negotiations with State employees; and

WHEREAS, the Governor will not sign any future financial order authorizing the transfer of funds from the General Fund Salary Plan to offset the costs of pay raises at State mental health institutions; and

WHEREAS, the Legislature enacted LD 1614, Resolve, to Provide Funding for the County Jail Operations Fund, legislation de-appropriating over $2.4 million from Payments to Medical Care Providers in order to fund operations at county and regional jails; and

WHEREAS, sound fiscal management requires Executive direction to mitigate the impacts of this legislation;

NOW, THEREFORE, I, Paul R. LePage, Governor of the State of Maine, do hereby direct the Department of Health and Human Services to undertake any of the following actions or a combination of the following actions to fund the implementation of the aforementioned legislation in a fiscally prudent manner:

  1. Transfer any remaining balances within the Low-Cost Drugs to Maine’s Elderly Program;

  2. Transfer any funding that can be generated by a redistribution of a Fund for a Healthy Maine; and

  3. Transfer any savings that can be created by actively managing personal services at State mental health institutions, which includes implementing a hiring freeze and other cost-saving measures Department-wide.

These actions, which are designed to mitigate the budget impacts of unfunded legislative mandates and legislative misallocations, shall remain in effect through the remainder of Fiscal Year 2016-17 or until the Legislature acts to provide appropriate funding for these initiatives.

The effective date of this Executive Order is June 30, 2016.

Related Documents

AN ORDER REGARDING UNFUNDED LEGISLATIVE MANDATES AND LEGISLATIVE MISALLOCATIONS