Senate President Mattie Daughtry, D-Brunswick, pounds her gavel during the morning session Tuesday in the Senate chamber at the Maine State House. Joe Phelan/Kennebec Journal

AUGUSTA — Republicans in the Maine Senate rejected a supplemental budget deal Tuesday night, leaving a proposal that included critical funding for MaineCare providers in limbo and lawmakers trying to figure out what might come next for the deal.

After earlier votes in both the Senate and House of Representatives in favor of a compromise plan that included new limits on housing assistance, the proposal seemed headed toward passage early Tuesday evening.

But Senate Republicans reversed course when the proposal came up for final passage, resulting in a 22-11 vote in support of the bill that fell short of the 24 votes needed to get two-thirds support in the 35-seat chamber to enact the legislation on an emergency basis.

The House then voted 108-29 to stand by its previous vote for the bill with two-thirds support. Maine Senate President Mattie Daughtry, D-Brunswick, said she was surprised and frustrated by Senate Republicans’ votes and said she plans to reconvene lawmakers later this week to figure out next steps.

“We need to figure out what to do,” Daughtry said. “This money needs to get delivered now. … I’m hoping Senate Republicans understand what a compromise and negotiation is and stop playing games.”

Two Senate Republicans, Sen. Rick Bennett, R-Oxford, and Sen. Marianne Moore, R-Calais, voted with Democrats in support of the bill Tuesday night. Senate Minority Leader Trey Stewart, R-Presque Isle, who spoke in favor of and voted for the compromise amendment, voted against the bill later Tuesday, along with several other Senate Republicans.

Stewart said after the vote that Senate Republicans’ support for the amendment was an agreement to “make a bad bill less bad,” but shouldn’t have been taken as an indication of overall support for the package, and said he had been clear with Daughtry that there were only two members of his caucus who were interested in supporting the overall bill.

‘THERE WAS NEVER A DEAL’

“It’s absurd that they would be injecting this new element of, ‘We had a deal,'” Stewart said. “That is a lie. There was never a deal.”

The stalemate Tuesday night comes as lawmakers have already spent weeks negotiating a budget proposal and as state officials have said that they will need to begin curtailing payments to MaineCare providers because they have not received the emergency funding.

Nearly all of the $121 million supplemental budget is dedicated to closing a $118 million deficit in MaineCare costs through June, the end of the current fiscal year. Another $2 million is proposed to fight spruce budworm infestations threatening Maine forests.

Republicans have called for MaineCare reforms to prevent the state from facing similar shortfalls in the future and have also wanted to see limits to the housing assistance through the General Assistance program as proposed by Democratic Gov. Janet Mills.

Democrats had argued that those are larger policy issues that should be discussed in the context of the next biennial budget, and not during negotiations for the supplemental budget, which is meant to fill gaps in the current budget.

It appeared the two sides had reached an agreement Tuesday with the compromise amendment introduced by Daughtry that included, among other things, limits on housing vouchers to 12 months within a three-year period under General Assistance, which is designed to be a last-resort safety net program but has grown in recent years to provide ongoing rental support.

The proposed General Assistance limits, which would not apply to emergency shelters or temporary housing, are not as strict as those originally proposed by Mills and supported by House Republicans. Mills originally proposed limiting housing assistance through GA to three months within a 12-month period.

The proposal also would fund an independent audit to look for “for fraud, waste and abuse” in the MaineCare program, while also requiring the Department of Health and Human Services to seek federal approval for a 1.95% cost of living increase to direct care workers. The audit would be due on Jan. 5, 2026.

Speaking from the floor, Senate President Mattie Daughtry, D-Brunswick, introduces a compromise amendment to the supplemental budget bill during a late afternoon session Tuesday. Joe Phelan/Kennebec Journal

Prior to Tuesday’s votes, state officials already had said that they would have to start reducing payments to providers of MaineCare, the state’s Medicaid program, because of delays in getting the funding approved.

Beginning Wednesday, the state will only pay 70% of prospective interim payments to critical access hospitals, while withholding payments for all hospital claims greater than $50,000 and payments to large retail pharmacies, large durable medical equipment providers, and out-of-state providers of hospital, ambulance, pharmacy and durable medical equipment services.

Critical access hospitals are smaller, isolated, rural community hospitals designated by the federal government to receive higher reimbursement rates for Medicare and Medicaid, while prospective interim payments provide a steady source of revenue so these facilities can pay fixed expenses throughout the year.

Maine has about 17 critical access hospitals, all of which are located in rural areas, including Bridgton, Calais, Dover-Foxcroft, Greenville, Houlton, Millinocket and Rumford, according to the Maine Hospital Association.

PAYMENTS TO BE HELD UP

A DHHS spokesperson said providers were notified about temporary holds on certain payments beginning with this Wednesday’s payment cycle. The department also conveyed that emergency action on the budget would prevent further temporary holds.

Republicans have also insisted on adding work requirements for MaineCare before they would support the supplemental budget. But Democrats have balked at that proposal since, unlike the GA reforms, work requirements have not been subject to a public hearing.

Just before the Senate’s final vote on the bill Tuesday, Assistant Minority Leader Matt Harrington, R-Sanford, called again for further reforms to MaineCare.

“We did get some reforms that are moving the ball in a positive direction for Maine (in the amendment),” Harrington said. “But unfortunately it did nothing to address the Medicaid system in this state. And for that reason I will be voting against it, and I think we need to do more in the state to address the Medicaid system.”

Stewart also said after the vote that reforms to MaineCare are critical to winning over further Senate Republican support. “This bill has a study about Medicaid. It doesn’t go far enough. That’s just the reality of it,” he said.