Lawmakers are in the midst of the difficult task of developing a balanced budget for the next two years, knowing that revenues, at least for the first year, will be significantly lower than first thought. Complicating their work is that they don’t know how big the drop in revenues will be and they must have a finished and approved budget in place for the new fiscal year that starts in less than three months.
The Appropriations Committee is taking the right approach by seeking agreement on as much of the two-year spending plan as possible, understanding that additional cuts will be likely after the state’s revenue forecasting committee presents its updated projections by May 1.
One way to do this is to reach agreement on spending that is, say, $200 million to $300 million less than the $6.1 billion called for in the governor’s budget. This would involve the distasteful work of making additional cuts that may not be necessary, but it would offer a way to complete the budget without waiting for specific revenue numbers.
A two-thirds vote is now necessary to pass and enact the budget, so it will take effect by July 1, when the new fiscal year starts. That means a number of Republicans, a party that has routinely criticized Democrats for wasteful spending and cuts that are not deep enough, will have to support the package.
Republican lawmakers held a news conference Thursday on the banks of the Kennebec River in Augusta to explain their vision for the state. Without mentioning the state budget, Senate Republican leader Kevin Raye and House Republican leader Josh Tardy set about explaining their party’s platform — basically lower taxes and more efficient government.
Drawing “bright lines,” as Rep. Tardy said, between Republicans and Democrats isn’t entirely helpful when lawmakers, no matter their party affiliation, must work together to complete a budget. It also ignores the fact that the governor’s budget, which is the blueprint for ongoing legislative work, looks more like a Republican document — real spending reductions and no tax increases — than something put together by a Democrat.
Gov. John Baldacci is the first chief executive in decades to actually reduce state spending. His proposed budget for fiscal years 2010 and 2011 totals $6.1 billion. The 2008-09 budget was $6.3 billion. If spending kept pace with the average increases in recent years, the next biennial budget would have totaled $6.8 billion. He will also reduce the number of state employees to the lowest level since 1983.
The urgency of the budget work was highlighted Friday by Ryan Low, the state’s finance director. He told the Appropriations Committee that the state’s Medicaid program will run out of money on May 8. A $65 million appropriation, using federal stimulus funds, to bridge this shortfall is included in the budget bill. Without passage of the budget, this money won’t be available and the state would not be able to pay hospitals and other providers for services for Medicaid patients.
Lawmakers naturally want as much information as possible before making a state budget final. At the same time, their deadline is fast approaching, requiring innovative, collaborative fixes to fill the expected revenue gap.