Last week, Maine Republicans criticized Gov. Janet Mills over her decision to use more than $10.5 million from the state’s budget stabilization fund, also known as the rainy day fund, to cover costs associated with the desertification of the Riverview Psychiatric Center in Augusta.
“On her first day in office, Governor Mills said that she had no interest in raiding the rainy day fund or increasing taxes, yet on February 28, only 57 days later, she approved a financial order to transfer more than $10 million out of the budget stabilization fund,” Senate Republican leadership said in a statement. “She did this in spite of the fact that the state is currently sitting on a $121 million surplus.”
That argument needs some serious unpacking, however, as the same Republican legislators two years ago endorsed using the budget stabilization fund to address the looming liability related to Riverview’s federal desertification.
Riverview was decertified in 2013 because of numerous problems, but the state continued to receive federal funds for the facility. While the facility regained certification effective in January, the Trump administration said that Maine must repay federal money used during the decertification period.
This issue didn’t materialize out of thin air. The federal government ordered Maine to repay $51 million in 2017, but then-Gov. Paul LePage’s administration appealed. Since then, the overall liability has grown $72.1 million. Mills plans to take $3.5 million more from the rainy day fund, and it remains unclear when or how the state will have to pay the remaining $58.1 million.
The Legislature, with support from Republicans, including those now in current Senate leadership, passed a budget in 2017 that authorized the transfer of up to $65 million from the rainy day fund for federal Riverview costs.
“In other words, Governor Mills used money out of an account created in part by the Senate Republican leadership and used it for the very purpose for which they intended,” Mills spokeswoman Lindsay Crete told the BDN last week of the $10.5 million transfer.
“That’s where we’d agree to disagree,” Republican Senate Assistant Minority Leader Jeff Timberlake, told the BDN Tuesday. His take on the 2017 legislative intent is that money was meant to be used to directly pay back the federal government for the Riverview costs, not to fill holes in the state budget caused by federal money that Maine didn’t receive.
Crete further explained that the financial order “authorizes the transfer of a portion of these funds from the reserve account to cover the cash withheld by the federal government as partial payment towards the disallowance accrued under the previous administration.”
Timberlake said there’s little doubt that this debt needs to be addressed, but would like to see more communication between the governor’s office and Legislature about the details.
“This is about a process,” Timberlake said about Republican objections to the use of rainy day funds.
Much of Timberlake’s nuance, however, was not present in the initial statement from Senate Republicans, which didn’t even acknowledge why Mills is transferring the money — a particularly relevant, though admittedly complicated, piece of information.
Timberlake and Republicans may have a point that Mills could potentially have addressed these costs in a supplemental budget and worked more directly with current legislators, and the administration may have added a level of confusion by not publicizing the federal Riverview decision until six days after it was dated. But Republicans clearly have gone too far in their “57 days” approach, unfairly implying that Mills somehow jumped to raid the rainy day fund.
For Republicans to criticize Mills for starting to pay off a federal debt not accrued under her administration, when she’s moving the money from a source they themselves signed off on — even if they disagree on the matter of directly paying the federal government back versus filling holes left when the federal government withheld funds — feels more like convenient political messaging than an attempt to be part of the solution to a very real problem.
Instead, Republicans should focus on the legitimate argument that this potentially higher than anticipated federal debt is one example of how unplanned costs can add up and hurt the state’s finances.
The $72 million Riverview liability is a significant potential cost — $7 million more than the Legislature budgeted for — and should concern members of both parties. It is sure to factor into the ongoing debate about Mills’ proposed $8 billion budget, as it should. But moving forward, that debate should avoid overly partisan attacks that ignore how we got here in the first place.