Cash crunch crowds legislative budget writers

Posted April 17, 2009, at 9:57 p.m.

AUGUSTA, Maine — Legislative budget writers are facing a formidable challenge as they attempt to craft a two-year spending plan when the anticipated size of the cash in state coffers is shrinking.

Members of the Appropriations Committee, which has been holding hearings and work sessions on the budget for more than two months, had hoped to get a final vote from the full Legislature on the $6.1 billion biennial budget this month.

But the goal has now been pushed to May 8, roughly a week and a half after the committee receives updated estimates about how deep Maine’s budget hole has grown amid the continuing recession. (It was more than $800 million, but that figure is widely expected to grow by several hundred million dollars).

May 8 wasn’t selected at random. That’s the date that MaineCare — the state’s Medicaid program — will run out of money unless something is done, according to Baldacci administration officials.

“There are thousands of [health care] providers across the state of Maine who need us to pass a budget by May 8,” said Rep. Emily Cain, D-Orono, the co-chair of the Appropriations Committee. “That is the pressure and the timeframe under which we are operating.”

Last month, lawmakers learned that MaineCare was facing a $65 million budget shortfall for the current fiscal year, which ends June 30. The Baldacci administration has proposed using federal stimulus dollars to fill the gap, but the state needs to pass a two-year budget first.

Before that happens, however, the Appropriations Committee needs a ballpark figure for much money will be in state coffers — or, in this instance, how much less money will be flowing in because of the recession.

The state’s economic forecasting team will present its updated figures to the committee April 28. That gives legislative budget writers 10 days to nail down the roughly $6 billion spending plan before releasing it on the full Legislature.

Dairy assistance

In related developments, the Appropriations Committee received an update Friday on the anticipated size of the budget gap in a program intended to keep Maine dairy farms from going under.

The news wasn’t good for either the committee or dairy farmers.

Maine’s Dairy Stabilization Tier Program could be facing an estimated $11 million shortfall in each of the next two fiscal years. That’s on top of an estimated $7.3 million shortfall, most of which has been addressed, in the current fiscal year.

Farmers depend on the stabilization program as a sort of financial safety net whenever the government-controlled price of milk drops too low. The payments help cover the gap between production costs and the payments that farmers receive for the milk their cows produce.

Sen. John Nutting and Rep. Wendy Pieh, the two chairs of the Agriculture, Conservation and Forestry Committee, acknowledged Friday they are struggling to come up with a solution to the complex problem. The farm community is also deeply divided

“It’s very difficult,” said Nutting, D-Leeds. “You can get 50 farmers in a room and you’re going to get 50 different thoughts.”

Underscoring the severity, Pieh said Maine needs a certain number of farms for suppliers and milk buyers to stay engaged in the state. Farms are already shutting down. If enough go belly up, it could take down the whole industry, warned Pieh, D-Breman. Maine has roughly 330 dairy farms.

The committee was given until April 30 to come up with a recommendation on the stabilization plan.

Gay marriage hearing

What is expected to be the largest public hearing of the legislative session will take place Wednesday when lawmakers hear testimony on a bill to allow same-sex couples to marry in Maine.

Some people involved in the issue are forecasting as many as 2,000 people could converge on the Augusta Civic Center for the hearing on LD 1020, which would repeal the state law limiting marriage to unions between a man and a woman.

The Judiciary Committee also will hold hearings on another bill, LD 1118, that would extend the same rights and benefits to same-sex couples on the Maine Domestic Partners Registry as currently offered to married couples.

Groups on both sides of the issue are well-organized and have been staging media events for months. Recent action on the gay marriage issue in Iowa, Vermont and other states means the debate in Maine likely will get national attention. Perhaps illustrative of that, a Pennsylvania-based group opposed to gay marriage left copies of pamphlets scattered throughout the State House on Friday.

The hearing will be held from 9 a.m. to 8 p.m. Wednesday. Doors open at the Augusta Civic Center at 8 a.m.

Coming up

Most of the Legislature is off next week for school vacation week. The Agriculture, Conservation and Forestry Committee, however, will hold public hearings on several potentially divisive issues.

On Wednesday, the committee will hear testimony on a number of bills dealing planning within the Unorganized Territory by the Land Use Regulation Commission. On Thursday, the committee will hold hearings on several bills dealing with application of aerial pesticides and notification procedures when the chemicals are sprayed. Both hearings are slated to begin at 9:30 a.m.

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