AUGUSTA — Gov. Paul LePage said it’s “a fluke in the laws” that neither he nor the Legislature has any say over the Maine State Housing Authority.

He hopes the Legislature will change that early next year.

“The Maine State Housing Authority does not report to me,” he said. “Nor do they report to their own board. It’s just a fluke in the laws. I don’t know if it’s intentional or not, but the executive director of the Maine State Housing Authority has no boss until such time as the Legislature chooses to give someone some oversight.”

The issue came up at a press conference last week while LePage was explaining the reasoning behind some of his proposed cuts to the Department of Health and Human Services.

Part of the proposal, the closure of private non-medical institutions, would mean that 6,000 people would need new places to live as of July 1. If there were more affordable-housing options, it would help solve the problem, LePage said.

“We can ask and beg but we can’t direct,” he said. “I need to convince the Legislature to either give me the authority or do their jobs and force the issue.”

The authority’s director, Dale McCormick, said she believes the governor already has a lot of power to control the agency.

“The governor appoints the board, the Legislature confirms the board, and the board controls everything,” she said.

That includes the budget, whether the authority can borrow money, and the rules that govern how projects are built. Recently, LePage appointees took control of the board. McCormick is a former Democratic state senator who was appointed to lead the agency by Gov. John Baldacci, a Democrat.

“They have a director that is happy to implement the policies they pass,” she said.

Near-veto

During the same press conference, LePage said he almost vetoed the two-year, $6.1 billion state budget that the Legislature passed in June because he was unhappy that it didn’t contain the changes to welfare he had proposed.

“I nearly vetoed the budget because of the lack of work that they did on the whole issue of DHHS and welfare and Medicaid,” he said. “At the last minute, I elected not to because 70 percent of the budget was pretty much what we wanted. I knew we’d have to come back.”

Although it seems like an eternity, it was just six months ago that people at the State House were on pins and needles, waiting to see if LePage would sign the budget. It was June 20 and the fiscal year started July 1, so there wasn’t much time to change the budget — which had been delicately balanced to win support from both Republicans and Democrats.

LePage ultimately signed it, although we now know just how close he came to sending it back to the Legislature.

LePage certainly didn’t shy away from vetoes in his first legislative session as governor, issuing a dozen, about mostly minor bills and resolves.

‘Haven’t seen happy’

The stress of leading a 4,000-employee, billion-dollar agency that faces significant budget cuts appears to be taking a toll on Health and Human Services Commissioner Mary Mayhew.

Rep. Dennis Keschl, R-Belgrade, noticed it last week, when he said the last time she appeared before the Appropriations Committee, she appeared “downfallen.”

“Downfallen?” she asked.

“You were downfallen, you weren’t happy,” he said.

“I haven’t seen happy in a while,” she said.

Welfare fraud?

As a steady procession of people testified at the State House last week about his proposal to cut health and support services for thousands of poor, sick, elderly and disabled Mainers, the governor was in Franklin County taking questions about welfare fraud.

LePage held his latest Capitol for Day event in Salem Township on Wednesday, which was the first day of hearings on his proposal to cut spending for MaineCare and other health and human services to close a $221 million budget deficit over the next 18 months.

As often happens during the events, the questions and complaints circled around to welfare fraud. Some residents said that ending cheating on assistance could solve the budget shortfall.

LePage responded by saying rampant fraud is among the major causes of the budget shortfalls. He also said Maine needs to reduce its generous benefits so they don’t attract people from other states.

The comments weren’t well received back in Augusta on Thursday.

“When he says rampant, I don’t know what he means. If there is rampant fraud and we know about it, we should deal with it, and not cut services for the elderly and small children,” said Sen. Margaret Craven, D-Lewiston, during a break from the hearings. “They’re not creating fraud. … The people we’re hearing from are very vulnerable people.”

Christine Hastedt of Maine Equal Justice Partners, a group that advocates for the poor, said the fraud accusations may be human nature when people are struggling in a difficult economy, but they won’t solve the problems fueling demand for services.

“Fraud is such a minuscule part of what we need to worry about fixing,” she said.

Hastedt cited DHHS figures that say the fraud rate in Maine’s core welfare program, Temporary Assistance for Needy Families, is less than 1 percent and well below the national average.

Adrienne Bennett, spokeswoman for LePage, said Thursday that the governor has not been focusing on welfare fraud as a driving force behind the shortfalls in the budget or the proposed cuts. But, she said, “it seemed to be one of the big recurring issues” at Wednesday’s event.

LePage has assigned a group of officials to investigate the true extent of fraud in the state assistance programs, but he has not yet received any new estimates or reports, Bennett said.

“We know it occurs. It’s a problem,” she said. “We’re trying to get a handle on how big a part of the problem it is.”

House to Senate

Two current House leaders announced their intentions to run for state Senate in 2012.

Assistant House Majority Leader Andre Cushing, R-Hampden, said he’s running for the seat representing Senate District 33, which includes 16 towns in Penobscot County. He wants the seat now held by Sen. Debra Plowman, R-Hampden, who is prevented from running again by term limits.

On the Democratic side, House Minority Leader Emily Cain, D-Orono, will run next year in Senate District 30, which covers 23 towns, also in Penobscot County. She wants to replace Sen. Elizabeth Schneider, D-Orono, who also is termed out.

A quick check of the candidate filings shows Cushing will face former Rep. Brian Duprey, R-Hampden, in a primary in June. Cain is the only one to file so far in Senate District 30.

It will be a fun year to keep an eye on the Senate, which is now controlled by Republicans 20-14-1. Ten of the 35 Senate races will have no incumbents, because of term limits.

MaineToday Media State House writers Susan Cover and John Richardson contributed to this notebook.