A Maine legislative study of ways to pay off the state's $484 million debt to Maine's hospitals shows that a bond sale would generate the most money.
A legislative study of ways to pay off Maine's $484 million debt to hospitals shows that a bond sale would generate the most money.
The government owes the money to the hospitals for unpaid Medicaid bills going back to 2009. If Maine paid the hospitals $186 million, the federal government would follow with $298 million it owes.
A 10-year private contract for the wholesale sale of liquor in the state is expiring in the summer of 2014. Republican Gov. Paul LePage has proposed issuing liquor revenue bonds to raise the $186 million. The state would take over the wholesale sales operation while still leaving the distribution to a private contractor. The bonds would be financed through the proceeds from the liquor sales.
Maine Democrats have responded by proposing that the contract to supply liquor be put up to a bid with a request for an upfront fee. The proceeds from the auction would be used to pay what Maine owes for Medicaid, triggering the federal government's matching contribution.
The Maine Legislature's office of fiscal and program review has examined proposals like those of the Democrats and LePage, as well as a third proposal in which a private contractor would lease out the liquor sales and operations but would not make an upfront payment.
The office concluded that the third approach would generate $32 million more for the state than the Democratic approach over the next decade. A proposal like LePage's bill would generate an extra $23.5 million over the next decade compared to the Democrats' plan.
Since taking office in Feb. 2011, the governor has declined to permit the issuance of $104 million of debt approved by voters in November 2010 and 2012.
LePage has also proposed $100 million of prison bonds and $100 million or transportation bonds. But he has said he would only be willing to issue the debt and the voter-approved bonds if his plan to repay the hospitals is approved.
