Senate OKs $5.8 billion budget

Posted May 27, 2009, at 9:29 p.m.

AUGUSTA, Maine — Lawmakers on Wednesday overwhelmingly approved a $5.8 billion budget that imposes deep cuts throughout state government as Maine struggles to weather the global recession.

The budget bill now goes to Gov. John Baldacci, who is scheduled to sign it this afternoon.

Many of the House and Senate members who spoke Wednesday described the budget as an imperfect product but the best option available to the state as the amount of money flowing into state coffers continues to shrink.

The spending blueprint, which is $500 million less than the current biennial budget, levies cuts across state government, including in education and health and human services programs. It also orders 20 government shutdown days over the next two years and forces state workers to make other concessions on pay and benefits.

But speakers praised the budget-writing committee for their bipartisan approach to the issues over the past several months. The 119-26 vote in the House and 33-2 vote in the Senate are both well above the two-thirds majority needed to pass the budget.

“All of us should take pride that the budget before us is an example of how the people’s government should work,” Sen. Kevin Raye, a Perry Republican and Senate minority leader, said prior to the vote.

When the Legislature’s Appropriations and Financial Affairs Committee began work on the budget more than three months ago, Maine was facing a $838 million shortfall. But as the recession deepened, the anticipated budget gap was upped another $570 million.

Sen. Richard Rosen, a Bucksport Republican who serves on Appropriations, tried to put the challenge into context by explaining that $1.4 billion is more than the entire General Fund expenditure on state payroll for the biennium. It is also significantly more than state government sends to municipalities for education programs in a year, he said.

Both public schools and state employees will take hits in the budget.

The plan includes a slight increase in funding for K-12 schools for the next fiscal year but reduces general aid to schools by more than $50 million in Fiscal Year 2012. Lawmakers said they hope schools will use the next year to figure out how to deal with the reduction.

Maine’s public colleges and universities, foster care or adoptive programs and some services offered to the disabled will also see budget cuts.

“As difficult as this was, this is something that we had no choice on,” noted Rep. John Piotti, D-Unity, referring to Maine’s constitutional requirement of a balanced budget.

In addition to the government shut-down days — the equivalent of losing two weeks’ pay each year — state employees will have to forego merit and longevity pay increases. The budget also institutes a tiered system whereby state workers will contribute to their personal health insurance premiums.

MaineCare reimbursements to “critical access hospitals” in rural areas will be reduced, although reimbursements to private physicians will actually increase.

The average taxpayer could feel the pinch, too, through reductions in tax benefits in the Circuit Breaker and Homestead Exemption programs as well a freeze on annual inflation adjustments to income tax brackets. Lawmakers also acknowledged that reducing state funding for schools and scaling back revenue sharing could force towns to increase property taxes.

“This budget is going to push $140 million more onto the property taxpayers in the state of Maine,” said Rep. Douglas Thomas of Ripley, who joined 24 of his House Republican colleagues and one independent in voting against the budget. “I’m sorry, Madam Speaker, but I can’t push that much onto the property taxes.”

On Tuesday, unionized state employees staged a rally in the State House where they accused lawmakers of disproportionately balancing the budget on their backs and on their households. But lawmakers said Thursday that it’s obvious from the local businesses that are closing down and workers who are being laid off that workers throughout Maine are suffering through the recession.

“To the people who wrote me and asked, ‘Why are you balancing the budget on me?’ I would say we’re not just balancing it on you,” said Sen. Deborah Simpson, D-Auburn. “It’s also on your neighbor, on the child down the street or the people with developmental disabilities, on hospitals, on everyone.”

Lawmakers said that while the overall tone of the budget was decidedly gloomy, there were a few bright spots. For instance, the state plans to largely use federal stimulus money to pay off debts to hospitals dating back several years.

The budget also includes funding for doctor-training programs in the state, a new wellness program aimed at improving state employees’ overall health and for a new childcare pilot program for children from low-income families in Waterville. The milk price stabilization program and monitoring for red tide in shellfish were also preserved.

An estimated 255 jobs within state government would be eliminated under the budget proposal, many of those through attrition or elimination of vacant positions. And for the first time since 1974, the next biennial budget will be smaller than the last.

Still, there were some legislators who believed the cuts to state government were not deep enough.

Sen. Doug Smith, R-Dover-Foxcroft, was one of two Senate Republicans to vote against the budget. He said he fears that the recession will drag on longer than expected in Maine and that the state will be in worse shape when the federal stimulus money dries up in two years.

“I think this budget is going to sentence Maine to a long, dark, cold economic winter as we try to recover from a severe recession,” he said.

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