Commissioner concerned about Medicaid expansion impact on education

2014 marks the 10th anniversary of Mainers voting to require that the State fund 55 percent of the cost of public education. While we in Augusta have worked toward meeting that mandate, we have struggled most years to get to even 50 percent.

Due to other funding priorities – especially those related to health and human services – the Legislature simply cannot come up with the money.

As talk of growing Maine’s Medicaid program again swirls in the State House, I’m often asked for my assessment on the potential effects of expansion on education.

As our Department’s longtime Director of School Finance and Operations and now its Commissioner, I can tell you I am deeply concerned about the negative impact to Maine schools of further growing this already unsustainable program.

What is particularly troubling to me is the amount of uncertainty that surrounds expansion at the federal level, making it difficult for states and individual departments like ours within those states to truly understand and prepare for the impact.

However, if history is any guide, the effects would be significant.

Throughout most of the 1980s and 1990s, Maine devoted more than 30 percent (and as much as 34.44 percent) of its General Fund to supporting schools. Yet since Maine’s Medicaid program first expanded in 2001 that percentage has continually decreased, and is now at an all-time low of 29 percent and falling.

This year, Maine will spend more on health and human services – mostly Medicaid – than it will invest in educating its 185,000 school-aged children. While we must continue to deliver on our commitment to caring for our aging population and those with physical and intellectual disabilities, I believe funding locally implemented education should be the top spending priority of State government.

Were it not for past expansions of the Medicaid program, I believe the State would currently be funding its share of education at 55 percent.

Additionally, budget shortfalls from current Medicaid costs have led to curtailments almost annually of appropriated funds, including those for education. Last year alone, we had to cut $12.7 million from General Purpose Aid (GPA) and have already projected a need to cut another $9.5 million in GPA in 2014.

Because those were funds already committed to schools, these Medicaid deficits are preventing us from keeping our funding promises to Maine schools, leaving districts to raise the difference locally or make their own difficult cuts. I expect only more of these unplanned, mid-cycle cost-cutting measures by agencies like ours if the price for this program continues to climb.

Impacts of expansion would be felt beyond GPA. Many districts already experienced a dramatic reduction – from $35 million in 2010 to $6 million this year– in funding for reimbursement of Medicaid approved school-based services, and I expect that those reimbursement levels would become even more unpredictable.

Coordinated and effective state support is one of the five core priorities of our Education Evolving strategic plan. It is up to schools and districts to do the hard work of instructing, assessing and providing for the well-being of students; ensuring effective educators; and engaging parents and the public. It is up to the State to provide adequate and effective financial support.

I do not believe finally funding education at 55 percent would solve all of the challenges that lie ahead of us. But I have repeatedly heard from many in the field—including from groups like the MEA and MSMA, who continually press for Maine to meet that voter-mandated amount—it will certainly help.

If Medicaid expansion moves forward as it is currently proposed, Maine will likely never be able to afford its required State share. Although the State’s budget would continue to increase, I expect there would be further decreases in education funding allocations.  This to me is not acceptable, and it’s why I have expressed my concern about the current proposals, regardless of what side of the aisle they are coming from.

Expansion cannot come at the expense of Maine students and their futures. Please know that I will continue to advocate for adequate funding for public education here in Augusta and, as importantly, for the effective use of those precious State dollars at the local level.

3 thoughts on “Commissioner concerned about Medicaid expansion impact on education

  1. The fact that the state and nation have been in a financial recession is significant in the reduction of funds available to the state for any and all of the commitments it has had in the past ten years that the commissioner talks about. Stop blaming the poor. The solution is not to rob Peter (Medicaid) to pay Paul (education). Together we achieve more and we should not be practicing the sectionalism that is now occurring where everyone protects just their own interests. Business, health, education, the environment, etc…are all integral to the success of our citizens. Ultimately it comes down to each individual doing their part for the greater community, including lawmakers, you and me. Help your neighbor and the whole neighborhood will improve. If you know of someone abusing the system, report them. Otherwise, stop talking about “all the people” who abuse the system…who are they? Enough of this pointing the finger at the nebulous “they, them, those people.” The formula for Medicaid funding is far too complex and intertwined with other needs to use it as an excuse for not funding education. If we wanted to do both, we could. Citizens should think of the common good and stop wanting tax breaks for their own gains. And the government officials that citizens elect should stop blaming the poor and underprivileged for the state’s problems. Help them to not be poor and underprivileged by educating them AND keeping them healthy! Accept the Medicaid expansion and raise the revenue needed to fund education.

  2. Although voters of Maine desire that the State finance K-12 public education at the rate of 55% of the total cost, it should be noted that within the past ten years the cost of per student in educating K-12 students has exceeded the percentage rate increase in inflation.

    Local school districts seem to want more money from the State at the same time of maintaining more local control and less State control.

    If and when the Sate of Maine could possibly finance k-12 public education at the rate of 55%, then I feel the State of Maine needs more control to look out for Sate taxpayers.

    Richard C. Larson
    Retired Cost Accounting and Economics Instructor

  3. I agree that funding education at 55% probably would not be adequate, but it would at least be a step in the right direction. Tying Medicaid funding to education funding doesn’t make sense to me. While I realize there are finite funds available, the impact on the poor and the elderly, a large percentage in our state, seems punitive. And refusing federal funding for Medicaid seems ludicrous.

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