Governor’s Address 02/16/13 Plan to Pay Off Hospitals is a Good Deal for Maine

Hello. This is Governor Paul LePage.

In 1924 President Calvin Coolidge said, “We must have no carelessness in our dealings with public property or the expenditure of public money. Such a condition is characteristic either of an undeveloped people, or of a decadent civilization. America is neither.”

And I will add this: nor is the State of Maine.Today, we face a $16 trillion debt, yet many politicians proclaim there is no spending problem.In 2012, President Obama said, “We need to do more” on the deficit, “and that means making choices.” One year later after being re-elected he presses for more spending during his State of the Union Address.  In fact, he said, “Let’s be clear: deficit reduction alone is not an economic plan.”

I agree. However, our children, grandchildren and great-grandchildren should not suffer because today’s politicians can’t make tough choices.  We must deal with America’s debt and Maine’s debt. Government should not be excused from paying its bills. Citizens who do not pay their bills face consequences, yet the government gets a free pass.

Here in Maine, we have a plan to pay off nearly a half-billion dollars in debt owed to Maine hospitals. Our proposal pays $484 million in outstanding bills to our hospitals − the largest employers in our state − is finally being scheduled for a hearing, after having spent a week sitting on a shelf, thanks to some who do not think it is a priority.

Our proposal pays off the debt in its entirety and creates good-paying jobs.Unfortunately, this debt forced many layoffs, negatively affecting employment opportunities for every region of our state. Nearly $28 million is owed to St. Mary’s Regional Medical Center in Lewiston, resulting in two dozen jobs eliminated in recent years. Cary Medical Center in Caribou has left numerous jobs unfilled because there is no money to pay for the positions.

Many hospital officials say this debt forces them to borrow money to operate. Officials from Mercy Hospital in Portland say health care costs are increasing due to added borrowing. It is important to note that the state’s share of the debt to the hospitals is approaching $187 million. Once we pay our share, the federal government will kick in another $298 million. The longer we wait to pay, the more our share grows due to the decreasing federal match.

You may have heard about how we plan to pay our portion of the bill. We have identified a reliable revenue stream from the state’s liquor sales to generate the state’s share of the $484 million we owe. Our plan restructures the state’s retail liquor business - estimated to generate upwards of $40 million annually. It is a better financial deal for Maine people.We can grow this business by lowering prices on spirits so Maine can better compete with New Hampshire’s tax-free liquor sales, and give a better value to the customer and improve profits for retailers. Our plan provides a much greater return on investment to our State.  This plan will save and create more jobs as we work to strengthen Maine’s economy.  Not paying our bills leads to more hardship for our communities and hard-working families. My plan is a good deal for Mainers, and it is time for the Legislature to act.

I will leave you with a final quote from President Coolidge: “There is no dignity quite so impressive, and no one independence quite so important, as living within your means.”  Maine families live within their means and it’s time government does too.