Crossroads GPS: “Blew It”

Crossroads GPS attacks former Maine Governor Angus King with caricatures of his actual policies and ideas, and comes up short at every turn. The wind energy project he was involved with cut local taxes in half; his education cuts amounted to less than 2 percent of planned school aid; and he reduced Maine’s tax burden over his tenure, while returning the state’s budget to health. He supports the Affordable Care Act, but GPS misrepresents the law’s provisions.

Crossroads GPS Tilts At Windmills

Wind Project Decreased Tax Bills By 59 Percent. According to the Portland Press Herald: “The roughly 400 residents in the Oxford County town of Roxbury got new tax bills in August that are 59 percent lower than their last bills, the direct result of the $120 million Record Hill wind project developed there by King’s former company. The project created an instant commercial tax base for the town and reduced the tax rate from $16.86 per thousand dollars of property value to $6.93.” [Portland Press Herald9/11/12] 

Roxbury Households Also “Receiving A $111 Check From The Company Every Three Months.” According to the Portland Press Herald: “Each Roxbury household is also receiving a $111 check from the company every three months to cover the cost of electricity as a way to provide a state-mandated ‘tangible benefit’ to the community. The amount of the checks will change as the electricity price goes up and down.” [Portland Press Herald9/11/12

Background On Record Hill

In 2007, King And Business Partner Formed Independence Wind. According to the Morning Sentinel: “In 2007, four years after King left the governor’s office, he and Rob Gardiner, former president of the Maine Public Broadcasting Network, formed a new company, Brunswick-based Independence Wind.” [Morning Sentinel9/15/12]

Independence Wind’s First Project Was Record Hill Wind Farm In Roxbury, ME. According to the Morning Sentinel: “Independence Wind’s first project was Record Hill, a 22-turbine, 50-megawatt wind farm in the Oxford County community of Roxbury. Independence Wind became a partner in a new company, Record Hill Wind, along with Wagner Forest Management and other investors. King and Gardiner held a combined 10 percent share of Record Hill Wind.” [Morning Sentinel9/15/12]

Recovery Act Created Loan Guarantee Program For Green Energy Projects. According to the Morning SentinelAfter the financial markets crashed in 2008, there was little willingness to risk money on energy projects, according to King and Gardiner. In 2009, the so-called federal stimulus law created new incentives for stalled ‘green’ energy projects to proceed. The Department of Energy used funding to guarantee loans for qualified renewable energy projects that included innovative technologies. Guarantees that the federal agency would repay loans if developers could not enable projects to obtain financing at below-market rates despite the sluggish economy.” [Morning Sentinel9/15/12]

Record Hill Applied For Loan Guarantee In 2010, Was Approved In 2011 After King Left Company. According to the Morning SentinelIn 2010, Record Hill applied for a $120 million loan guarantee. Its private investors included the wealthy Yale University Endowment, but the project would not have moved forward with private financing, given the poor market conditions, according to King and Gardiner. The energy department eventually approved the application based on Record’s Hill use of a technology intended to prevent turbulence, which can shut turbines down and reduce efficiency. It is the first commercial-scale use of that technology in the United States, according to the DOE. […]Record Hill’s loan guarantee was approved in August 2011, 16 months later. By the time the loan guarantee came through, King was no longer an owner of Record Hill. In January 2011 — seven months before the loan was approved — the majority investors bought out King and Gardiner, according to documents provided by King’s campaign.” [Morning Sentinel9/15/12]

Record Hill Also Received A $33 Million Federal Grant After King “Was Out Of The Picture.” According to the Morning Sentinel: “More recently, Republicans have criticized another federal subsidy for Record Hill — a $33.7 million U.S. Treasury Department grant received in June. The grant also is related to the federal stimulus law. Renewable-energy developers have been receiving tax credits from the Treasury Department since 1992 under President George H.W. Bush. The 2009 stimulus law gave companies a new choice: Take the annual tax credit and recoup development costs over time or receive a one-time grant equal to one-third of a project’s development cost. Record Hill is one of 37 Maine companies so far to choose a grant instead of a tax credit. […] King said he was out of the picture before the owners even applied for the grant. He dismissed the idea of favoritism in the tax credit program.” [Morning Sentinel9/15/12]

Tax Burden Declined By Hundreds Of Millions Under King’s Administration

Portland Press Herald “Truth Test”: King Lowered Taxes. From the Portland Press Herald‘s fact check of an Angus King ad claiming he lowered taxes: “There’s no politician who hasn’t boasted of lowering one tax or another, so we’re going to hold King to a large burden of proof — not just a few decreases, but Maine’s tax burden over his tenure as governor, by two separate measures. First, a Maine Revenue Services document detailing the net estimated effect of  ‘significant’ King-era tax increases and decreases and their impact in fiscal year 2003. The sheet says nearly $429 million was saved in taxes because of changes enacted between 1995 and 2003. […] Second, we’ll look at another Maine Revenue Services measure of taxation — a 2011 incidence study that measured Maine’s effective state and local tax rate back to 1996. It said that in 1996, King’s second full year in office, Mainers paid just over 11.8 percent of income, including capital gains, in state and local taxes. In 2002, King’s last full year in office, that rate had dropped to under 11.5 percent. […] Verdict: All evidence collected points to a large impact on Mainers’ wallets from changes enacted during the King administration. With a net and percentage-wide decrease, we’ve got no problem with the claim. We rate this statement true.” [Portland Press Herald9/10/12, emphasis original]

Schools Cuts Amounted To 1.37 Percent Of What State Planned To Spend On Schools, And Were Issued In Face Of $180 Million Budget Shortfall

King’s $10 Million Cut From State Aid To Schools Was Less Than 2 Percent Of What State Was Supposed To Send To Schools In Fiscal Year 2003. According to the Associated Press: “King said last month that he was prepared to unilaterally reduce school aid by $10 million for fiscal 2003, which began July 1. State aid to local school units was $622 million in fiscal 2000 and $664.1 million in fiscal 2001. It grew by 6.7 percent to $708.7 million for fiscal 2002, according to legislative analysts, and was scheduled to increase by 3.1 percent to $730.8 million for fiscal 2003.” $10 million out of $730.8 million is approximately 1.37 percent. [Associated Press via Nexis, 7/3/02] 

At The Time, Maine Faced Projected Budget Shortfall Of $180 Million. According to the Associated Press: “Early effects of Maine’s revenue shortfall will be visible when most state government offices remain closed on Friday, the day after Fourth of July. Gov. Angus King is furloughing thousands of workers without pay for the day. The shutdown is part of King’s package of unilateral steps aimed at reducing a shortfall originally pegged at $180 million through June 2003.” [Associated Press via Nexis, 7/3/02]

Affordable Care Act Savings Do Not Cut Medicare Benefits

PolitiFact: Affordable Care Act Does Not Cut Medicares Budget, It Attempts To Reduce Future Costs. According to PolitiFact: “Neither Obama nor his health care law literally cut a dollar amount from the Medicare program’s budget. Rather, the health care law instituted a number of changes to try to bring down future health care costs in the program.” [PolitiFact, 8/15/12]
Medicare Spending Reductions Aimed At Insurance Companies And Hospitals, Not Beneficiaries.” According to PolitiFact: “What kind of spending reductions are we talking about? They were mainly aimed at insurance companies and hospitals, not beneficiaries. The law makes significant reductions to Medicare Advantage, a subset of Medicare plans run by private insurers. Medicare Advantage was started under President George W. Bush, and the idea was that competition among the private insurers would reduce costs. But in recent years the plans have actually cost more than traditional Medicare. So the health care law scales back the payments to private insurers. Hospitals, too, will be paid less if they have too many re-admissions, or if they fail to meet other new benchmarks for patient care. Obama and fellow Democrats say the intention is to protect beneficiaries’ coverage while forcing health care providers to become more efficient.” [PolitiFact, 8/15/12]

CBOs July Estimate Updates Medicare Cost Savings To $716 Billion. According to the Congressional Budget Office’s analysis of a bill to repeal the Affordable Care Act, repeal would have the following effects on Medicare spending: “Spending for Medicare would increase by an estimated $716 billion over that 2013–2022 period. Federal spending for Medicaid and CHIP would  increase by about $25 billion from repealing the noncoverage provisions of the ACA, and direct spending for other programs would decrease by about $30 billion, CBO estimates. Within Medicare, net increases in spending for the services covered by Part A (Hospital Insurance) and Part B (Medical Insurance) would total $517 billion and $247 billion, respectively. Those increases would be partially offset by a $48 billion reduction in net spending for Part D.” [, 8/13/12]

2011 GOP Plan Kept Most Of The Savings In The Affordable Care Act. According to theWashington Post’s Glenn Kessler: “First of all, under the health care bill, Medicare spending continues to go up year after year. The health care bill tries to identify ways to save money, and so the $500 billion figure comes from the difference over 10 years between anticipated Medicare spending (what is known as ‘the baseline’) and the changes the law makes to reduce spending. […] The savings actually are wrung from health-care providers, not Medicare beneficiaries. These spending reductions presumably would be a good thing, since virtually everyone agrees that Medicare spending is out of control. In the House Republican budget, lawmakers repealed the Obama health care law but retained all but $10 billion of the nearly  $500 billion in Medicare savings, suggesting the actual policies enacted to achieve these spending reductions were not that objectionable to GOP lawmakers.” [, 6/15/11, emphasis added]

Medicare Board Tasked With Finding Additional Savings Is Forbidden From Cutting Benefits

ACA Establishes An Independent, Senate-Confirmed Board (IPAB) To Find Additional Savings. As explained by the Kaiser Family Foundation: “The 2010 health reform law (the Patient Protection and Affordable Care Act, also referred to as the ACA) establishes a new Independent Payment Advisory Board (IPAB) with authority to issue recommendations to reduce the growth in Medicare spending, and provides for the Board’s recommendations to be considered by Congress and implemented by the Administration on a fast-track basis. […]As authorized by the health reform law, IPAB is an independent board housed in the executive branch and composed of 15 full-time members appointed by the President and confirmed by the Senate. [Kaiser Family Foundation, April 2011]

IPAB Proposals Will Be Implemented Unless Congress Finds Alternative Savings Or Supermajority Overturns Them. According to the Washington Post: “Beginning with fiscal 2015, if Medicare is projected to grow too quickly, the IPAB will make binding recommendations to reduce spending. Those recommendations will be sent to Capitol Hill at the beginning of each year, and if Congress doesn’t like them, it must pass alternative cuts — of the same size — by August. A supermajority of the Senate can also vote to amend the IPAB [spending] recommendations. If Congress fails to act, the secretary of Health and Human Services is required to implement the cuts by default.” [Washington Post, 5/8/11]

IPAB Cannot Recommend Changes In Premiums, Benefits, Eligibility And Taxes. According to the Kaiser Family Foundation: “The Board is prohibited from recommending changes that would reduce payments to certain providers before 2020, and is also prohibited from recommending changes in premiums, benefits, eligibility and taxes, or other changes that would result in rationing.” [Kaiser Family Foundation, April 2011]

PolitiFact: “The Law Specifically States That The Board Cannot Ration Care.” According to PolitiFact, “Actually, the law specifically states that the board cannot ration care. The board doesn’t look at individual patients or deny individual treatments. Instead, it makes system-wide recommendations to rein in the future growth of Medicare spending, and it makes those recommendations within limited parameters. It also was created to stop runaway spending growth within the Medicare program itself, not to divert money to other budget items.” [, 3/12/12]

[NARRATOR:] We’ve seen how Angus King blew it for Maine, using his influence on a government task force to help windmill companies like his. As governor, King slashed funding for our schools and pushed job-killing tax increases. Now King backs a $700 billion cut to Medicare spending, and an unelected board of bureaucrats deciding what medicines and treatments seniors can get covered. Angus King: Helping himself, hurting Maine. Crossroads GPS is responsible for the content of this advertising. [Crossroads GPS via, 10/30/12]