AUGUSTA — The Maine State Housing Authority can help solve the funding shortage that threatened to displace close to 6,000 Mainers from residential care centers, according to Gov. Paul LaPage.

Housing authority officials said they are prepared to meet with the administration next week to discuss options.

“Not only did I expose the problem, but I can help (the Legislature) fix it,” LePage told WCSH-TV on Wednesday.

When asked by reporter Don Carrigan why he didn’t include his solution in the budget he proposed last month to close a $221 million shortfall in human services funding, LePage said it was because he doesn’t have power over the housing authority.

“If they give me authority over the Maine State Housing Authority, we could fix the housing portion (of the shortfall) through the Maine State Housing Authority,” he said. “They are part of the solution and I cannot force them.”

Housing authority officials said Thursday morning that it wasn’t a matter of being forced to help — they had not been asked. LePage first mentioned the quasi-state agency as a possible solution in December, when he proposed the new budget for the Department of Health and Human Services.

Housing authority officials Thursday afternoon said the governor’s office had called to set up a meeting on Monday.

“We’re not quite sure what the governor has in mind,” said Peter Merrill, communications and planning director for the authority.

LePage’s spokeswoman, Adrienne Bennett, said that while the administration has no specific proposal, it believes the authority has options for providing funding.

Earlier this week, Republicans on the Legislature’s Appropriations and Health and Human Services committees joined their Democratic colleagues in rejecting LePage’s proposal to eliminate state funding as of July 1 for so-called private non-medical institutions, which serve the elderly as well as people with mental illness and substance abuse problems.

The proposed $60 million cut was part of the governor’s effort to close the projected $221 million shortfall in the DHHS over the next 18 months. But LePage said that he never intended to see the facilities close, and that he set aside $39 million in the budget to help pay for alternatives.

Private non-medical institutions were targeted because the federal government has been questioning state officials for more than a year about the way Maine bills for services. Part of the problem comes from questions about whether Maine is billing the federal government for room and board, which is not reimbursable under Medicaid rules.

When asked whether the governor believes the housing authority has money to pay for room and board, Bennett said it’s one option that will be explored next week.

The housing authority helped build some of the private non-medical institutions by selling bonds to pay for them, Merrill said.

The authority acts as a bank for affordable housing that’s built by private developers. Beyond that, it has limited funding to help subsidize rents, he said, and it cannot pay for services typically provided at private non-medical institutions.

The facilities operate throughout the state. Some provide housing, food and personal care for nearly 4,300 elderly people who aren’t sick enough to need nursing home care but cannot live on their own. The state created the system in the mid-1990s to reduce the number of Mainers in nursing homes, which cost more than the residential care facilities.

Merrill said the housing authority also could help by having residents who use MaineCare — the state’s Medicaid program — to pay for their services apply for low-income housing vouchers. But the state gets only 4,000 vouchers from the federal government each year. It could use twice that number, and it’s up to the federal government to set the number for each state, Merrill said.

Maine now has 6,500 people on a waiting list for the vouchers.

The housing authority has been in the news lately, mainly because state Treasurer Bruce Poliquin has questioned the cost of affordable housing projects.

In particular, he has been critical of a development in Portland that originally had a proposed cost of $314,000 per unit but was lowered to $265,000 after the housing authority’s director, Dale McCormick, rejected the higher price.

A bill has been introduced by Senate Majority Leader Jonathan Courtney, R-Sanford, to make the director more accountable to the authority’s board of directors. LePage has said that the executive or the legislative branch needs more oversight of the housing authority, but he was not prepared to say Thursday whether he supports Courtney’s bill or whether he will put forward his own legislation.

“If and when details are ready to be released it will occur after the governor and legislators have had adequate time to discuss the issue,” Bennett said in an email.

House Minority Leader Emily Cain, D-Orono, said Democrats are willing to consider all options to help alleviate the funding shortage in the DHHS.

“Democrats will be open to considering what the governor brings forward if it’s about improving what we’re doing,” she said. “What we don’t want to see is something motivated by a power grab over a quasi-governmental agency.”

Susan Cover — 620-7015

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