Panel revamps plan to cut Maine budget

Posted May 18, 2009, at 9:33 p.m.

AUGUSTA, Maine — Legislative budget writers shelved plans for a 5 percent across-the-board pay cut for all state employees Monday night and, instead, returned to a proposal for government shutdown days to help close a widening financial gap.

The Appropriations and Financial Affairs Committee voted late Monday night after meetings with legislative leaders to shut down state government for 10 days each year over the next two fiscal years. The days would likely be timed around holidays.

“Many of the state employees said they would rather have shutdown days than across-the-board cuts, so this is a response to that,” said committee member Sen. Richard Rosen, R-Bucksport.

In addition to 10 shutdown days, the proposal suspends all merit pay and longevity pay increases for each of the next two fiscal years. The 12 committee members present also approved a plan to force state employees to contribute to their health insurance costs.

Representatives of the Maine State Employees Association SEIU Local 1989 expressed frustration at the constant changes to the part of the budget affecting state workers. The plan voted on Monday was the fourth major proposal in recent weeks.

“We’re not happy about the impact of this on our members,” Tim Belcher, executive director of the MSEA, told the committee just before the vote. While the union preferred shutdown days to pay cuts, it opposed freezing merit and longevity pay, he said.

Budget writers have been struggling for months to come up with a two-year spending plan that is hundreds of millions of dollars smaller than the last biennial budget. Gov. John Baldacci’s original $6.1 billion budget sought to cover a $838 million budget gap.

But since beginning work on the budget, the Appropriations Committee has seen the amount of revenue expected to flow into state coffers shrink by another $569 million.

The committee already has approved spending reductions throughout state government, with some of the deeper cuts on health and human services programs and education. Federal stimulus dollars will help fill in some of the holes.

The bipartisan committee has struggled to reach consensus on the final cuts, however. Meanwhile, some other major legislative work has been put on the back burner until the budget is passed out of the full Legislature. A budget vote is expected by Friday.

“Once this gets finalized, there are really very few major, contentious items to be worked out,” Rosen said earlier Monday evening.

The committee also settled another long-running sticking point over a state program that aims to protect dairy farmers when government-set milk prices drop below production costs.

The agreement, which had the support of the Maine Dairy Industry Association, would cap General Fund expenditures on the Dairy Stabilization Program at $13.3 million annually for the next two fiscal years. Payments to farmers also would be suspended this June and possibly next January.

A task force would examine the sustainability of the state’s dairy industry and the proposal allows the state to add additional tiers to the dairy stabilization program.

Gary Hammond, who attended Monday’s meeting as part of the dairy association, said he believes it will give farmers some sense of security over the next few months.

“It’s not everything that the industry was hoping for, but I believe it’s a workable compromise,” Hammond said.

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