On May 18, 2012, the Maine Governor's Office released a report titled Making Maine Prosperous: The First 500 Days of Governor Paul LePage.

The administration touted the document as a compilation of Paul LePage’s achievements. In reality, it amounted to little more than a political puff piece which neglected to address the real condition of Maine and its deteriorating economy.



On the eve of the beginning of legislative review of Governor Paul LePage's proposed supplemental budget, Fitch Ratings issued a statement downgrading Maine's General Obligation bonds from AA+ to AA. Reasons cited include the ongoing Medicaid budget mismanagement and weak projected growth. Fitch's also noted that "The governor recently proposed a major bonding initiative that could substantively increase the state's debt load."

Fitch release included:

"CONTINUED BUDGET PRESSURES BALANCES: The downgrade reflects the state's persistent budget gaps despite repeated balancing actions. Another sizable imbalance emerged for the current year with revenue underperformance exacerbated
by growing Medicaid costs. The administration's proposed mid-year adjustments include several one-time measures.

The one-notch downgrade on Maine's' GO bond rating reflects its reduced financial flexibility with weak reserve levels and limited options to address a difficult budgetary situation. Economic forecasts reviewed by Fitch indicate
the state's economy will remain in a slow-growth mode, which is likely to limit revenue improvements. The 'AA' rating assumes that while the current-year gap solutions may include limited one-time measures, the next biennial budget will
follow the state's historical pattern with primarily sustainable and recurring solutions. Fitch notes that the state faces an increasingly contentious decision-making environment. "

Read more here.

Moody's Investors Service issued a warning today that due to the state's ongoing fiscal issues at the Department of Health & Human Services a credit downgrade could be coming.

Moody's cites the recent federal waiver denial and continued failed management of the Governor and DHHS Commissioner Mary Mayhew as the reason for issuing the warning stating:

"[t]he announcement is credit negative as the state had hoped to use the associated $16 million of savings toward closing an $88 million healthcare budget shortfall largely caused by Medicaid cost overruns. Maine's budget has also been hampered by sales and personal income tax underperformance in the current fiscal year, leading Governor Paul LePage to propose $35 million in spending curtailments. Although Maine's healthcare deficit is a small portion (3.3%) of the state's $3 billion General Fund budget, the shortfall contributes to persistent mid-cycle budget gaps that have emerged over the past several years. Maine's health and human services expenses have been a longstanding budget challenge as cost-cutting measures have failed to meet targets."

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For the second straight day, news of a growing state budget shortfall has left leaders scrambling to solve the problem, raising the possibility of seating an Appropriations Committee before the January opening of the legislative session.

News of the Medicaid shortfall came a day after the state’s revenue forecasting committee reduced tax collection estimates by $37 million for the fiscal year that ends June 30, 2013.

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Land for Maine’s Future, which assists local efforts to protect land for conservation, recreation and sustainable forestry, is facing a $2.3 shortfall because of Gov. LePage's decision to delay issuing voter-approved conservation bonds. Because of the delays, the program might not be able to honor commitments to 19 pending projects.

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A Maine Education Association report shows how much Maine students stand to lose and how much out-of-state corporations stand to gain if for-profit virtual schools are allowed a foothold in Maine.

Read more here.