The unpaid $500 million MaineCare hospital debt is Maine’s version of an entitlement-driven debt and constitutional crisis.
We are all Greeks now.
MaineCare is means-tested health care entitlement spending. The unpaid hospital debt has been persistently and predictably growing through three governors and both Democratic and Republican majorities in the Legislature.
The debt is a violation of the Maine Constitution’s requirement for a balanced budget, and a disturbing denial and dereliction of the governor’s and Legislature’s responsibility to ensure that balance.
The Constitution forbids incurring long-term debt of more than $2 million without the vote of the people, except for temporary tax anticipation loans and certain specified emergencies.
Most of the $500 million hospital debt is more than a year old, and it was never voted on by the people. The Constitution also prohibits selling bonds to finance current expenditures. Former Attorney General Janet Mills ruled in 2009 that the unpaid hospital debt was a current expenditure.
The unpaid hospital debt first developed under Gov. Angus King, and accelerated under Gov. John Baldacci. Majority Democrats sought to pay a rising health care entitlement bill with higher taxes.
A people’s veto overturned one such tax. The debt continued to grow. In 2011, Gov. Paul LePage and the Republican majority paid off most, but not all, of the debt.
Republicans sought to cut spending elsewhere and to amend the terms of health care entitlements. The debt continued to grow.
LePage flirted with calling a special session to address the problem, but demurred.
Now, we have both a debt and a constitutional crisis. No one will admit to or do anything about an obvious and fundamental violation of the Constitution. Denial may serve the legislative majority, but LePage must try and move us off this road to Greece.
Associate professor of economics
University of Maine at Machias