May 22, 2018
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Baldacci orders agencies to cut $150M

By Mal Leary, Maine Public

AUGUSTA, Maine — Gov. John Baldacci has told state agencies they have a week to come up with ways to cut $150 million from current state spending as state revenues fall further behind projections.

“We are in a recession,” he said in an interview Wednesday. “I don’t want to cut, but I have an obligation to balance the budget.”

Baldacci said Maine is not the only state facing steep declines in revenues, and he is having discussions with legislative leaders about whether to have a special session this month to make cuts he cannot make under the budget curtailment law or have the new Legislature in December consider cuts just after lawmakers take office.

“There are limits to what I can do,” he said. “I cannot eliminate a program when that may make the most sense. We may want to look at some of the ideas in the 10-percent memos and pass them to take effect this year.”

Baldacci is referring to budget proposals from state agencies for the new two-year budget that starts next July 1. Last month he required state agencies to submit budgets that cut spending 10 percent.

The governor said even though the Revenue Forecasting Commission has not completed its work, it is certain that revenues will be re-projected down by as much as $150 million for the current budget.

“I can’t wait for that process to be completed,” he said. “ We have to start the process to cut spending now.”

Senate Majority Leader Elizabeth Mitchell, D-Vassalboro, said she had spoken briefly with the governor and agrees lawmakers cannot wait until the New Year to work on cutting current state spending.

“It should be the new Legislature who takes the consequences because it is not just a curtailment of this budget; it will set the stage for the new two-year budget as well,” she said. Mitchell said newly elected Democratic lawmakers are meeting next week to select their leaders for the new session.

“We recognize this is a crisis, and we cannot wait and do things as usual,” she said.

Baldacci also spoke with Senate Minority Leader Carol Weston, R-Montville, who urged lawmakers to move swiftly on making budget cuts.

Rep. Hannah Pingree, D-North Haven, the House Majority Leader, said when the new Legislature is sworn in next month, it will have to start work immediately to address the state’s budget crisis.

“We have had about eight hours to celebrate our wins,” she said. “Now we have to start work to resolve our serious budget problems. I certainly hope Congress acts this month to provide the states some help, because many states have the same problems we do.”

Members of the state’s congressional delegation all support a second stimulus effort. Congress passed a $168 billion stimulus package last February, backed by President Bush, which sent out rebate checks of up to $600 to individuals and $1,200 to couples. The House passed a second $61 billion economic aid plan in September, but it failed in the Senate after most Republican senators opposed it and Bush threatened to veto it.

The senior member of the delegation, Republican Sen. Olympia Snowe, believes Congress will act this month on a new package.

“We cannot wait for the president-elect to be sworn in next January,” she said in an interview. “I think we need to help the states and provide direct assistance as well with a further extension of unemployment benefits that are running out and an expansion of food stamps.”

Extended 13-week unemployment benefits passed last summer are now being exhausted. More than 2,000 workers each week are receiving federal extended benefits in October that averaged about $248 a week.

Snowe said she also supports direct aid to the states including one-time Medicaid payments that can be used for other government uses. That was done in 2002 by Congress.

Another measure getting broad support would be a one-time boost in funding to the states for infrastructure projects like road and bridge repairs and construction. Lawmakers have been discussing a $25 billion package of aid to the states, and Sen. Susan Collins has called for a $50 billion infrastructure plan to help the states.

Snowe said she believes chances of passing a second stimulus package will be bolstered since both the president- and vice president-elect are members of the Senate.

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