Legislative and Budget Summary by Rita Furlow, Senior Policy Analyst at the Maine Children’s Alliance

Posted on September 07, 2017

We finally have a state budget after what seemed like interminable gridlock between the Legislature and the Governor. This is a budget filled with significant policy changes, particularly to education funding. I’ll provide some of the highlights from the budget, an update on some bills, and more information regarding DHHS rules for licensing of family child care.

The primary focus of budget deliberations this year centered on education spending. The approval of Question 2 with the goal of achieving 55% of state funding for K-12 education set the stage for the legislative conflict. The Governor and Republicans in the Legislature were adamant and united about removing the funding source of a 3% surcharge on incomes above $200,000. Unfortunately, the Governor and some House Republicans were also willing to shut down state government over the issue. In the end, the surcharge was removed and $162 million dollars was added to support K-12 education ($48.4 million in 2017-2018 and $113.6 million in 2018-2019). Although this doesn’t reach 55% and is a disappointment to many who voted for Question 2, it is a significant increase in spending for local school districts.

In terms of early childhood issues, Head Start funding was one of the final pieces of the budget negotiation. The Governor proposed to cut $1.2 million in Head Start funding in his budget. In addition, there was also going to be a loss of $575,000 from a previous one-time expenditure. While the $1.2 million was reinstated during deliberations by the Appropriations Committee, the funding gap remained. But the $575,000 was added into the final budget during last minute negotiations between the House Speaker and Governor – thanks to Speaker Gideon.

There were also significant changes relating to public preschool funding in the budget. As you may recall, legislation enacted in 2014 for public preschool required $4 million of casino revenue for start-up funds for new public preschool programs to begin in 2015. During the debate on the bill that year, legislators heard that state funding for preschool was delayed for over a year and a half through the funding formula, which was a significant deterrent to starting new classrooms. This delay in funding meant that during the first year, districts had to fund the creation of new preschool classrooms from only local dollars.

The $4 million was eliminated from the FY 2015-17 budget and pushed out to FY 2017-19. This year’s budget proposal struck the $4 million again. While the $4 million was eliminated in the final budget, new language was inserted into the EPS/school funding formula that changes how school districts receive preschool funding. The funding will occur based on estimates of projected enrollment of preschool students. This will provide up-front money for new programs and eliminate the year and a half wait for funding. We think this a significant structural change in the funding formula that will support preschool expansion. Thanks goes to Senator Brian Langley and Rep. Brian Hubbell for making this reform.

An additional change in the school funding formula language will also result in an increase in preschool funding. The Question 2 initiative provided additional funding for K-12 education, but not public preschool. A change in the definition of “kindergarten” to include four-year old programs will result in these programs also receiving additional funding.

There are also two significant changes that will impact disadvantaged students in the EPS formula. First, school districts with higher numbers of “economically disadvantaged students” will receive additional funding in the EPS/school funding formula. Rep. Brian Hubbell, who negotiated many of the changes, estimates there will be approximately $27.5 million targeted to provide additional supports to disadvantaged students. The budget language provides additional funds for the “direct support of learning for economically disadvantaged students through summer schools, extended learning programs, tutoring and other evidence-based practices conforming to rules developed by the by the department and informed by evidence from a statewide education policy research institute.”  

Another significant change in the school funding formula relates to Title 1 federal funding that is targeted to schools with high concentrations of low-income students. For years, the EPS formula has essentially penalized schools receiving Title 1 dollars. These federal funds to support low-income students were meant to supplement and not supplant state and local dollars. Title 1 funds will no longer be subtracted from a district’s allocation, which is a substantial reform that supports disadvantaged students.

Sizeable portions of Speaker Gideon’s LIFT bill, An Act to Reduce Child Poverty by Leveraging Investments in Families Today, were also included in the final budget document. The provisions aim to alleviate deep child poverty and create opportunity for Maine families. The budget includes the following elements from the bill:

§  The first TANF increase in 16 years -- beginning October 1, 2017 TANF, families will see a 20% TANF increase.

§  TANF benefits will be increased annually beginning October 1, 2018 to reflect annual increases in the cost of living.

§  The TANF “housing special need” will both increase AND become available to more families.

§  The Working Cars for Working Families Program allocated $1.5 Million dollars a year for four years ($6 M total) to create a pilot program to purchase reliable used cars for working families with children eligible for TANF, Parents as Scholars, and Alternative Aid.

§  The final budget includes an additional $3 million dollars a year to provide fuel assistance through the Low-Income Home Energy Assistance Program (LIHEAP) to low-income families with children. 

There were also changes in the budget relating to the Maine Children’s Growth Council. The language, based on legislation submitted by Senator Rebecca Millett, changes the reporting requirements and provides the Council with $25,000 of annual funding to support its work.

Another last-minute negotiation was a moratorium on rulemaking relating to a number of MaineCare rates and reimbursements. The Department of Health and Human Services may not begin any rule-making procedure connected with rate reductions for reimbursement levels under Rule Chapter 101: MaineCare Benefits Manual, Sections 13 (Targeted Case Management Services), 17 (Community Support Services), 28 (Rehabilitative and Community Support Services for Children with Cognitive Impairments and Functional Limitations), and 65 (Behavioral Health Services) through June 30, 2019, unless legislative approval has been received.

On the negative side of the budget, the administration’s war on public health continued with a $10 million cut to programs supported by the Fund for a Healthy Maine. The cut included the elimination of numerous contracts that had just been implemented on tobacco cessation, obesity prevention, and other public health initiatives for children, such as school-based health centers. This budget removes virtually all public health tobacco prevention funding. The Fund for a Healthy Maine was established in 1998 as a result of a tobacco settlement case, which is the source of the annual revenue. This was sad day for the public health of Maine’s children.

Other Legislation

While the budget has been wrapped up, the Legislature has not adjourned. There are over 130 bills waiting on the Appropriations “table,” meaning these bills are waiting for review by the members of the Appropriations Committee this week. Another bill that was held over until the next session is LD 274 on background checks/fingerprinting. Different amendments were passed in the House and Senate. To avoid the bill dying in non-concurrence, it was sent back to the committee.

Finally, I want to share that we have filed something called an “Application for Legislative Review of Agency Rules” to request that the Legislature’s Health & Human Services Committee review the proposed rules for the licensing of family child care. We filed this in conjunction with the Maine Women’s Lobby, the Family Child Care Association of Maine, and MaineAEYC. We learned at the public hearing on the proposed rules in May that the Department intends to file the rules as an “emergency,” with means they will immediately go into effect for 90 days without legislative review. In addition to our numerous concerns about the virtual elimination of “quality” in the proposed rules, we believe the timing and filing as an emergency subverts the legislative review process. See the attached document we filed for more details about the rules. You can reach out to Christine Kirby in our office (ckirby@mekids.org) if you would like to learn more about how you can help with this effort.