AUGUSTA — Eliminating state funds for public radio and television would devastate the Maine Public Broadcasting Network, executives and supporters told lawmakers Wednesday.
“We are aware of the significant funding challenges you face this year and will in at least the next several years,” said Hank Schmelzer, chairman of the MPBN board. “Suffice it to say, a significant reduction this year in the funding the state has previously committed to MPBN would be devastating.”
The testimony came on the second of three days of public hearings on Gov. Paul LePage’s proposed supplemental budget.
That budget, with new spending and tax cuts totaling about $38 million, is designed to bring the state’s two-year $6 billion budget into balance by increasing funding in some areas and cutting it in others.
Lawmakers also must resolve a $100 million shortfall in the Department of Health and Human Services.
LePage is proposing to eliminate all state funding for MPBN, which would be a $1.7 million cut to the network for the fiscal year that starts July 1. The governor said last week that he needs the money to pay for welfare and that he doesn’t think the state should subsidize a business.
“Why should I pay welfare to a company?” he said during a town hall meeting in Oxford County. “It’s that simple. I need that money to pay welfare. I need the (money) to make sure some elderly don’t freeze.”
The state provides 17.4 percent of the network’s $11.2 million annual operating budget. Most of the funding — 64 percent — comes from members’ contributions, according to the network.
MPBN President and CEO Mark Vogelzang said the network needs the $1.7 million and an additional $200,000 that was cut last year.
He said the network’s board is working on ways to replace state money with private fundraising, but it needs more time to develop a plan.
“We would come back to you later this summer with a plan that could change the relationship between the state and MPBN,” he said.
In addition to MPBN, lawmakers on the Appropriations Committee considered proposed cuts to higher education that total $2.4 million, a cut to the Maine Clean Election fund, and a series of tax cuts that are proposed in the budget.
A cut to Maine’s community colleges would eliminate six programs, reduce enrollment by 225 students and eliminate 24 faculty, staff and administrative positions, said John Fitzsimmons, president of the Maine Community College System.
Supporters of the Clean Election Act, a system approved by voters in 1996 to provide taxpayers’ money for legislative and gubernatorial elections, said the proposed $2.5 million cut would chip away at the program.
“The weakening of Clean Elections only means a bigger role for private special-interest money in our elections, and that is not what Maine people want,” said Alison Smith, president of Maine Citizens for Clean Elections.
Several people testified in support of the tax cuts, while a few expressed opposition. Those who work in the horticultural and wood cutting industries said they support a proposal to exempt machinery from the sales tax.
Others, including the Maine Association of Retirees, urged lawmakers to support tax cuts on pensions.
LePage is proposing to increase, from $6,000 to $10,000, the amount of pension income that is exempt from income taxes in 2013-14, and to increase the exemption amount by $5,000 each year thereafter through 2018-19.
While there would be no cost to the state in this fiscal year, the cut is projected to cost $7.6 million in fiscal 2013-14 and $28.6 million in fiscal year 2014-15.
With the tax cut fully in effect, it would cost $105 million a year, according to Maine Revenue Services.
John Wakefield of the Maine Association of Retirees, which represents more than 15,000 people, said the change would help public-sector retirees by giving them the same benefit enjoyed by people who receive Social Security.
“Enactment … would reduce the disparity between those on a public pension, who are currently subject to Maine’s income tax, and those on Social Security, who are fully exempt from the income tax,” he said.
Albert DiMillo Jr., a retired CPA, said he opposes the tax cut even though he would benefit from it. He said it would help wealthy people the most and shouldn’t be rushed through in a budget bill.
“If you want to help the 1 percent, pass the pension bill,” he said.
Also, he said he disagrees with people who think the change would keep retirees in Maine.
“People move to Florida because the weather is nice, not because of taxes,” he said.
In recent speeches, LePage has said he hopes the change will encourage retirees to spend more time in Maine, and less in Florida. That way, they will be Maine residents, pay Maine taxes and spend their disposable income in the state.
Budget hearings will continue today on items related to the Department of Health and Human Services. Municipal officials are expected to testify against proposed cuts and changes to General Assistance that would hurt cities including Portland and Bangor.
Also, the budget proposes to restructure the Dorothea Dix Psychiatric Center in Bangor and eliminate 91 positions – 45 of which are now filled – effective May 1. If the jobs are eliminated, there will be about 190 people on staff at the hospital.
Susan Cover — 620-7015