Maine Agencies Cannibalized by Welfare Spending

February 24, 2014

For Immediate Release: Monday, Feb. 24
Contact: Adrienne Bennett, Press Secretary, 207-287-2531

AUGUSTA – As liberals continue to push for a massive expansion of welfare, Governor Paul R. LePage is reminding Mainers how Medicaid spending is already crowding out revenue for all other state agencies. (For details, click link below: "Medicaid Consumes General Fund.")

Medicaid expansion threatens programs, positions and services in all state departments. During the past three years, state government has eliminated and reduced funding in every state agency to pay for welfare costs. As Medicaid spending continues to consume the General Fund, there is less and less revenue for education, law enforcement, economic development and programs to protect our natural resources.

“Because Maine already expanded welfare a decade ago, Medicaid is now cannibalizing funding from all other state agencies,” said Governor LePage. “That means the state cannot fully pay its 55 percent share of local education costs. It cannot hire more Maine State Troopers or repair National Guard facilities. The state cannot adequately promote fishing and hunting programs or conduct research on our fisheries. It cannot expand job-training opportunities or properly fund programs for environmental emergencies. Everything the State of Maine does is adversely impacted by Medicaid spending. Now liberals want to expand welfare again.”

In the 13 years since Maine expanded welfare, Medicaid enrollment has more than doubled, and its cost has grown by $1.3 billion. Medicaid now takes 25 percent of all General Fund revenue. Even without welfare expansion, more than $2 billion will be spent on Maine’s Medicaid program over the next two years, totaling more than 35 percent of the General Fund.

If liberals succeed in expanding welfare again, Medicaid is expected to devour 45 percent of General Fund revenue.

Reduced federal money has forced Maine to spend a larger share of the General Fund on welfare. In fact, the drop in the Federal Matching Fund Rate (FMAP) declined from 74.73 percent in 2010 to 61.55 percent in 2014, which created $210 million in additional state expenses.
The State of Maine Medicaid Expansion Feasibility Study estimates expansion will cost the State $807 million over 10 years.

“We simply cannot keep throwing money at an inadequate welfare program. The state is not meeting the health care needs of vulnerable Mainers, and adding more people to the welfare rolls will only exacerbate the problem,” Governor LePage said. “Expanding welfare a decade ago did not increase access or improve the quality of care, nor did it help uninsured Mainers. Now it is threatening all of the other programs and services Mainers expect from their state government.”

The Governor vetoed last session two Democratic-led Medicaid Expansion bills, citing the financial burden expanding would place on Maine taxpayers.

“Our state is facing a fiscal crisis, and we need to examine our spending practices, evaluate the delivery of services and gain control of our welfare system,” said Governor LePage. “Maine’s economic security and future is at stake, and we must make hard choices. My challenge as Governor and our challenge as a state is to find ways to help Maine families prosper, improve the business climate, foster better educational opportunities while still protecting those most in need with limited resources. We cannot do that while Medicaid is consuming an inordinate amount of our finite financial resources.”

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Medicaid Consumes General Fund