No agency safe; Baldacci orders all budgets cut

By Mal Leary, Capitol News Service
Posted Oct. 02, 2008, at 9:11 p.m.

AUGUSTA, Maine — No state agency is exempt from Gov. John Baldacci’s order to find budget cuts totaling 10 percent of current spending levels.

The order even applies to the state’s newest agency that has yet to propose a budget.

“No one is exempted from this, not human services or education or corrections,” Finance Commissioner Ryan Low told members of the State Corrections Board on Thursday. “That does not mean we will flat-fund every agency in government, but we want all agencies to go through the exercise.”

The State Corrections Board was created earlier this year and is working on a budget request for the next two-year budget cycle and for six months starting in January. Panel members were seeking some direction from Low on what budget targets applied to them. He warned the budget situation could get worse.

“One of my biggest concerns is that we have a continued erosion of revenue,” Low said. “I don’t think there is anybody that thinks revenues will stay at current levels.”

He said the 10 percent cut target was set on the assumption it would be enough to cover reduced revenues. He said after revenues are reprojected next month the governor will have better information for making his final budget recommendations and could ask for further cuts if the revenue outlook worsens.

Low said just two agencies, the Department of Education and the Department of Health and Human Services, consume more than two-thirds of state revenues and dominate the state budgeting process. What he calls “the rest of state government” has seen its share of state resources decrease every budget for the last decade.

“What we have seen since 1998 is that the rest of state government, and corrections falls into that, has gone from 24 percent of the state budget to 22, to 20 and to 19 percent, where it is now,” he said. “And if I had to guess, I would say it will continue to go down.”

Low said state agencies have until Oct. 10 to submit their revised budgets, and he expects many will have difficulty determining where to make cuts to meet budget targets. He has asked for a “holistic” solution from each agency, not a set of options.

Corrections Commissioner Martin Magnusson said his agencies’ target, which directly affects the work of the State Corrections Board, is $16 million for the two-year budget. Flat funding is $326.6 million for two years.

Magnusson asked for an additional $57.2 million to keep current programs at current levels with $30.8 million of that earmarked to operate the board over the two-year budget cycle.

“Flat funding does not mean things the way they are right now,” he said. “Flat funding means substantial reductions, and I’m talking about the Department of Corrections, in what the state can provide.”

When members of the board pressed on what the DOC will be targeting for cuts, Magnusson said two or three state correctional facilities would have to be closed and that would put more pressure on county jails. He said the 50-bed unit in Charleston and the new women’s unit in Bangor likely would have to be closed under a $16 million reduction from current spending.

“It takes away the opportunity for group homes for the women,” he said. “We are in dire straits just on the flat funding let alone the 10 percent decrease.”

Magnusson said flat funding really means a decrease in funding because of the increased energy costs for both heating the correctional facilities and paying for higher transportation costs.

“And if you have to do 10 percent on top of that, we are facing some serious problems,” he said.

Waldo County Sheriff Scott Storey, a member of the board, said the budget cuts make the difficult job of transitioning all of the separate correctional systems into a unified statewide system even more difficult.

“It doesn’t do any good if we are shifting costs around so counties have to pick up cuts by the state,” he said.

DOC funding is from general state revenues, while county correctional facilities are funded by the property tax.

Panel members started the work of building a budget to operate the corrections board. The new system is supposed to create an integrated system that will be more efficient, saving taxpayers at all levels of government over the long haul. Many worry budget cuts could stymie that effort.

http://bangordailynews.com/2008/10/02/news/no-agency-safe-baldacci-orders-all-budgets-cut/ printed on September 21, 2014