AUGUSTA, Maine — Every program and area of state government faces renewed scrutiny as the recession continues to hammer state revenues and the Legislature’s Appropriations Committee gears up to find ways to trim next year’s budget and brace for further reductions this year.
Some programs will not survive, according to committee leaders.
State budget law already requires the panel to identify $30 million in cuts for the second year of the two-year budget, but lawmakers on the committee say that will likely be the easier of the challenges with the first year of the budget already $50 million in the red.
“We were just talking about how difficult it was to find $10 million a few years ago,” said Sen. Bill Diamond, D-Windham, co-chairman of the budget-writing Appropriations Committee. “Now we are talking at least $100 million; it could be more. This is the reality.”
Finance Commissioner Ryan Low said he hopes it is only $100 million that has to be found over the summer and fall to bring the overall two-year budget into balance.
“At a minimum it’s likely to be $100 million and probably larger,” Low said. “The governor has asked us to plan for the worst-case scenario, and that is what we are going to do.”
Rep. Sawin Millett, R-Waterford, the lead GOP member of the committee, said the way state revenues appear to be going, a $100 million target may be too small. Revenues were nearly $50 million below estimates for the two months after the April reprojection.
“I have seen nothing to indicate things are getting better,” he said.
Millett said the problem facing the committee is finding ways to cut spending both in the budget year under way and in the one that starts July 1, 2010.
“The assignment to the Appropriations Committee is growing minute by minute,” he said. “We have two challenges that we must meet, but there is no reason we cannot deal with them concurrently.”
Millett said the budget law requires them to identify $30 million in ongoing savings in the second year of the budget for lawmakers to consider in January.
“We also recognize we have a growing problem this year,” he said. “We need to identify areas that can yield savings in the current fiscal year and there is no reason some cannot continue to provide savings in the second fiscal year.”
Rep. Emily Cain, D-Orono, House co-chairwoman of the panel, agrees. She said the panel will have to work with the Baldacci administration to identify cuts for the current year and the second budget year and to revisit all areas of spending.
“This is not a typical budget year,” she said. “I really want to look at what is going to change how we spend our money so that in the long run, we are better off.”
Cain said a major concern she has is the tendency of both agencies and lawmakers to try to protect their programs. She said through the summer and fall the committee will have to struggle with that as they identify programs that are no longer providing services the state can afford.
“One of the things I am going to be asking is: Is it really worth doing any more if it is barely functioning the way it was intended to?” she said.
Sen. Richard Rosen, R-Bucksport, is the only GOP senator on the panel. He said the committee has to recognize that the economy in Maine has not started to recover from the recession and may not have “bottomed out,” and that revenues could get worse.
“I think that it is important for the public to understand just how bad it is,” he said. “It’s very difficult to predict just what the number will be, but we know we have to bring this budget back into balance.”
Rosen believes the panel will have to eliminate some programs and reduce others to keep spending within state revenues. He agreed with Cain that everything has to be considered, including human services and education, with the two making up about 80 percent of the state budget.
Low said he has started to review the entire state budget to prepare for the committee meetings later this month. He said the executive order the governor issued July 1 will help to hold down spending, but it is only a first step.
The Special Budget and Expenditure Order places a hiring freeze on vacant positions and limits overtime, travel and other expenses starting at the beginning of the 2010-11 fiscal cycle.
“I certainly am not comfortable in saying revenues have gotten as worse as they can get,” he said. “I think we are still looking at revenue problems, but I don’t know just how bad it may get.”
The committee meets July 22 and 23 to work on ways to cut spending. Members also plan to meet for two days in August, but Diamond says additional meeting days may be added after the panel assesses the situation on July 23.