Baldacci’s budget plan shares ‘pain’

Posted May 01, 2009, at 7:18 p.m.

AUGUSTA, Maine — Gov. John Baldacci on Friday unveiled a plan to bring his budget proposal back into balance, calling for government shutdown days, cuts in health care and education and stepped-up tax enforcement.

“The plan I’m presenting includes many difficult decisions. It requires shared sacrifices across the state. But I also believe the plan is reasonable and fair,” Baldacci said.

The new $570 million budget gap was created earlier this week when the state’s Revenue Forecasting Committee sharply cut back estimates to reflect lagging tax collections.

Baldacci proposed a $70 million cut in school aid and the elimination or suspension of more than $60 million in potential tax breaks for individuals and businesses. He also proposed two dozen government shutdown days.

He proposed using $75.5 million from the state rainy day fund and nearly $41 million more in other state government reserves to offset shortfalls from now through June 2011.

Under the plan, the state would impose increased health insurance cost-sharing for new employees and eliminate planned merit increases.

The Democratic governor also wants a new state commission to identify $37.5 million in savings.

In all, Baldacci said his original $6.1 billion two-year General Fund budget package would shrink to $5.8 billion.

“Things are difficult, but they could have been much worse,” he said, noting the availability of federal aid.

The savings from 24 shutdown days was pegged at $15.6 million, while scrapping merit pay increases would save about $9.5 million over two years.

House and Senate leaders were unenthusiastic.

“There is some significant pain in this package,” said House Speaker Hannah Pingree, D-North Haven.

Pingree, who with Senate President Elizabeth Mitchell is pressing for legislative budget action by mid-May, said lawmakers must quickly “figure out what the people of Maine can live with and what they can’t live with.”

Mitchell credited Baldacci with taking a broad view.

“There is an attempt, in all fairness, to try to have shared sacrifice,” she said.

At the same time, the Vassalboro Democrat said state employees could be facing the equivalent of 6 percent pay cuts and that new program cuts would have to come on top of reductions already under review.

“Will this go out exactly as it came in? Of course not,” Mitchell said.

Across the political aisle, the top Senate Republican said he found the governor’s plan shortsighted.

“I was surprised not to see more significant structural changes going forward,” said Senate Republican leader Kevin Raye of Perry.

“I was looking for something more significant,” added Raye, suggesting that public pensions and future curbs on Medicaid spending would merit closer scrutiny.

Baldacci’s new package calls for more than $35 million in cuts to health and human services programs, including reductions in some reimbursement rates for service providers, and may delay some catch-up payments due hospitals.

Additional cuts are proposed in property tax assistance programs — about $15 million — and municipal revenue sharing — more than $12 million.

Baldacci’s original two-year budget package envisioned the elimination of more than 300 positions. Officials said Friday no additional layoffs were being proposed.

The Legislature is scheduled to wrap up this year’s session in mid-June. With two-thirds majorities in both the House and Senate needed at this point in the session for budget passage, Democrats will need Republican votes to enact any major budget measure.

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