AUGUSTA, Maine — Maine budget writers will have to find a way to cut nearly $600 million from the state’s budget, according to preliminary figures released Friday by the Baldacci administration.
The Appropriations Committee, which is under pressure to get a two-year budget through the full Legislature by early May, is expected to receive official revenue forecasts next Tuesday.
But Ryan Low, commissioner of the Department of Administrative and Financial Affairs, offered the committee a sneak peak Friday at the size of the growing gap between tax revenues and state spending.
Low told lawmakers the projected shortfall likely will be somewhere between $560 million and $590 million. Adding to the bad news, Low estimated that $100 million of that gap is for the current fiscal year, which ends June 30.
“I don’t think there is going to be a revision,” Low said. “We have been in this general range for the past several days.”
Low added that the state’s revenue forecasting panel, which will meet Tuesday before briefing legislators, could adjust those figures up or down.
The Baldacci administration is putting together a proposal that would address the shortfall in the current fiscal year, Low said. Without going into specifics, Low said that hole would likely be patched with a combination of drawing down the state’s “rainy day” fund, which contains about $75 million, and one-time economic recovery money included in the federal stimulus package.
Sen. Bill Diamond, co-chairman of the Appropriations Committee, called it “a serious number” that lawmakers will have to deal with. The committee will continue its work Sunday during the first of what are expected to be several weekend meetings.
“I’m confident it will be a bipartisan approach,” said Diamond, D-Windham.
Gov. John Baldacci, a Democrat, stressed that his $6.1 billion biennial budget proposal was already $200 million smaller than the previous two-year budget. Cutting an additional $600 million from the budget will not be easy, Baldacci said, but he said people and health care providers are depending on the state to enact a budget quickly.
“What I’ve said is we’re not going to do it by raising taxes, and we’re not going to do it by cutting eligibility” in social programs, the governor said Friday.
“I think it makes the work harder and more challenging, but I think it’s necessary during the times we are in,” Baldacci said. “People are struggling both at work and at home, and at the same time people are dependent on a lifeline or safety net.”
State officials have warned that MaineCare, the state’s Medicaid program, will run dry by May 8 unless a budget is passed, thereby allowing use of federal stimulus money to plug the funding gap.
Low on Friday also told the budget committee that MaineCare’s projected funding shortfall for the current year has been revised from $65 million to $53 million, although even those figures are somewhat fluid.
Rep. Sawin Millett, R-Waterford, said the shortfall and projections of additional budget gaps in future years demonstrated the need for “structural change, not just a one-time belt-tightening.”
Sen. Richard Rosen of Bucksport, another Republican lawmaker on the Appropriations Committee, agreed the governor and Legislature must balance the budget while protecting vulnerable residents. But he also cautioned against counting too much on federal stimulus money.
“The stimulus money ends in 2011, when we will face a clifflike falloff in available funds,” Rosen said in a statement. “I would recommend that municipalities, school systems and other institutions that rely on state spending work with us cooperatively to use this stimulus interlude to plan for leaner times ahead.”