A new tax adopted in April by the Legislature was repealed by a vote of the people Tuesday, leaving the Dirigo Health insurance program to rely on its former funding method.
That funding, said the director of the program, won’t come easily, with annual court battles expected to cost some $1 million, just as they have in the past.
By a margin of 64 percent to 36 percent with 75 percent of precincts reporting, Mainers supported ballot Question 1, repealing a tax package that targeted the beverage industry as a means to fund DirigoChoice, the state’s subsidized health insurance program. Supporters of the repeal effort hailed the results of the vote as proof Mainers are tired of rising taxes.
“We said when this effort began in April that if Maine people are given a chance to vote on these new taxes, they would reject them,” said Newell Augur, who has been the public face of the Fed Up With Taxes Coalition, which supported the repeal. “The real battle was making sure that people understood the question.”
Gordon Smith of the Maine Medical Association, who has led the fight against Question 1, reacted to the results with dismay late Tuesday, citing the “unlimited checkbook” wielded by the opponents for the repeal’s success.
The Fed Up With Taxes political action committee collected some $3.7 million in donations – the majority of it from beverage companies – and reported spending more than $2.7 million in support of the measure, which eliminated new taxes on a variety of beverages.
Having lost one challenge, the program faces another: the Maine State Chamber of Commerce has sued Dirigo Health in Kennebec County Superior Court over the constitutionality of its funding source, which is collected from insurance companies and self-insured businesses based on a formula that is recalculated every year.
“If that lawsuit is successful, it’d be a death knell to the program,” Smith said. “I don’t think the Legislature wants to do that and no one wants to see 18,000 people lose their health insurance.”
Karynlee Harrington, executive director of the Dirigo Health Agency, said Tuesday afternoon that reverting to the old funding system revives a host of problems that have hampered the program. In addition to the annual litigation, it creates a cash flow problem because it takes up to two years to collect payments. Despite the problems, Harrington and Smith said the program would push forward. “We’ll do what we need to do to move forward,” said Harrington. “But we’re going to need the support of the Legislature.”
Even as the votes piled up against him, Smith agreed.
“This is not a night to be pessimistic,” he said. “It’s not the night to be whining. It’s time to think about working with the governor and legislative leadership toward a solution.”
Question 2, which would have allowed the construction of a resort casino in the town of Oxford, appeared headed for defeat early Wednesday morning, though spokespeople for both sides of the question were unwilling to predict the result at that time. With 75 percent of precincts reporting, the casino question was lagging behind, 54 percent to 46 percent.
“It was a sprint,” said Dennis Bailey, a hired consultant who lobbied against the casino. “In June, this thing was dead in the water. They threw everything at us and it appears they’ll fail. We’re hoping this will be the definitive vote (on the question of casinos in Maine).”
Patricia LaMarche, hired by the Las Vegas-based company Olympia Gaming, said the question’s defeat would be “awful sad.”
“This was about jobs. It was about the economy,” she said. “Here was a company with a $184 million investment knocking at the door. The people here (in Oxford County) are very concerned. It’s a bleak outlook; they don’t know what is coming for Maine.”
Question 3, which sought to borrow $3.4 million to leverage $17 million in other funding sources for revolving loan programs that benefit clean drinking water and wastewater treatment facilities, appeared on course for passage. With 75 percent of precincts reporting, it was in the lead 51 percent to 49 percent.
(Statehouse News Service)
