State reserves depleted, jobless rate on rise

Posted July 22, 2009, at 7:34 p.m.
Last modified Nov. 21, 2010, at 7:09 p.m.

AUGUSTA, Maine — The ongoing recession has officially depleted Maine’s financial reserves and continues to drive the state’s unemployment rate higher, state officials told a legislative committee charged with finding additional savings on Wednesday.

Although Maine technically finished fiscal year 2009 in the black, that was only possible due to a number of budgetary transfers and adjustments. Year-end revenues came in $43.4 million under budget, forcing the state to dip into the remaining $26.2 million in the state’s reserves.

“We are in a position now, much as when this administration came in the door, of having no reserves,” state Controller Edward Karass told members of the Legislature’s Appropriations and Financial Affairs Committee.

Karass urged the committee and, in a separate letter, Gov. John Baldacci to make rebuilding those reserves a top priority.

Wednesday’s meeting was the first of two that the committee will hold this week as it begins work to trim at least $80 million from the current two-year budget. The committee spent most of Wednesday hearing financial updates from various state agencies and programs.

Laura Fortman, commissioner of the Department of Labor, said Maine’s unemployment rate continues to climb but that the rate appears to be slowing, consistent with what is happening nationally.

Maine’s June unemployment rate was 8.5 percent, compared to a rate of 5.2 percent in June 2008.

Fortman said her agency has also made considerable progress handling the large volume of calls from people seeking unemployment assistance. During the first week of December, the agency reported more than 108,000 dropped or abandoned calls.

While the number of abandoned calls continues to fluctuate, it was down to 3,651 last week, according to statistics that Fortman supplied to the committee. Additional trained staff have also helped reduce the time many Mainers have to wait to receive their benefits, but high volumes continue to flood the circuits at times.

“You will have to call several times, but you should not have to wait three weeks to have someone get back to you,” she said.

The committee will continue its work today by revisiting a report released earlier this year that suggested the state could save up to $180 million by consolidating some government administration functions and taking other steps.

The committee meets at 9 a.m. in the State House.

kmiller@bangordailynews.net

623-0024

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