Mar. 6 -- Ide McInerney said she loves her job helping people with intellectual disabilities at a group home in Saco. But she may not be able to afford to keep working there, she said.
McInerney said that with a wage of about $18 an hour, she might have to switch careers if she doesn't get the cost-of-living raises that she was anticipating over the next three years.
"It's on the table," said McInerney, 48, of Old Orchard Beach. "If it came down to it, where I wouldn't be able to live, with the cost of living going up, unfortunately, yes, I would have to leave."
Cutbacks to planned cost-of-living adjustment, or COLA, increases are one of the flash points in a fight over the Mills administration's two-year budget proposal.
Direct care workers who care for people in nursing homes, in group homes for people with intellectual and developmental disabilities, or other settings typically work for local nonprofits that are reimbursed by Medicaid, or MaineCare, as it's called here. In Maine, the direct care workforce totals about 24,000 employees.
While Medicaid is a federal program, states have a lot of leeway in how it is administered. Maine had previously budgeted money to reimburse the nonprofits to pay for COLA increases for direct care workers from 2025-27.
But budgetary constraints, including a $118 million shortfall in the state's MaineCare budget, prompted cancellation of the 2025 COLA increases for direct care workers.
The COLAs vary by year based on the inflation rate, but in 2025, it would have been a 2.54% raise.
Mills' two-year budget proposal would cancel a range of planned raises for fiscal years 2026 and 2027, saving $132 million over two years. Of the $132 million saved, $85 million would come from canceling the COLAs for direct care workers.
The issue is expected to come up during the Legislature's Health and Human Services Committee meeting scheduled for Thursday in Augusta.
Maine Department of Health and Human Services spokesperson Alisa Morton said in an email response to questions that the budget "required hard choices, including numerous reductions to multiple existing programs."
"The administration has made substantial investments in MaineCare rates over the years, including introducing COLAs for numerous provider groups," Morton wrote. "In the current fiscal climate, with flattening state revenues, the budget could not support the estimated $132 million general fund cost of COLAs in the upcoming biennial."
But McInerney said she has a household budget, and without any bump in her salary, she would have to consider leaving Woodfords Family Services.
"You hate to leave a company that you enjoy working for, because it doesn't come along that often," McInerney said.
Stephanie Hatcher, of Hebron, who until recently worked for a nonprofit trying to recruit people into the direct care workforce, said attracting employees was a difficult task even with the COLAs. Without being able to promise raises, it becomes extremely hard to hire and retain employees.
"You can stock shelves for Coca-Cola for $24 an hour, and that beats what I could pay by $7 an hour," said Hatcher, who is on the Maine ombudsman's Direct Care and Workers Advisory Council. "Burger King's starting pay is $18 an hour. It makes it very difficult to compete for these jobs."
Eric Meyer, president and CEO of Spurwink Services, which provides behavioral health care in Maine, said "it's an incredibly competitive" environment for trying to hire workers.
"People have lots of options," Meyer said. "Eliminating the COLAs will dramatically impair our ability to hire and retain staff."
Arthur Phillips, policy analyst for the Maine Center for Economic Policy, a progressive think tank, said that without the COLAs, the average direct care worker will lose out on $1,690 in expected wage increases through 2027.
Phillips said cutting out COLAs will also renege on a state law that reimburses nonprofits so they can pay 125% of the state's minimum wage. Because the state minimum is $14.65 per hour, the reimbursement rate should allow nonprofits to pay $18.31 per hour.
A separate bill, by Democratic House Speaker Ryan Fecteau, would boost direct care pay even more, to 140% of the minimum wage, or $20.51 per hour.
"If the state doesn't invest in the system, we are concerned about programs collapsing entirely, or severely curtailing them," Phillips said, resulting in perhaps thousands of people going without needed services. "We don't know how to measure the impact of people who need care not getting it. But it's not like their need is going to go away."
Phillips said there's also an economic case for keeping the COLAs, because the state is giving up federal matching money in the Medicaid program -- about $215 million over two years -- by forgoing the COLAs.
Also, the decision would further shrink Maine's workforce because some people would have to become part- or full-time caregivers to family members who lost services, resulting in those people potentially giving up their jobs or scaling back their work hours to care for a family member who perhaps lost a placement in a group home.
Mara Cole of Houlton, a home manager for the Community Living Association in Aroostook County, said she has recently seen employees leave because of the loss of COLAs.
"People are saying, 'I love my job, but I'm not making ends meet,'" Cole said. "It's really put a hardship on our staffing, and it would impact the quality of our clients' lives."