June 24, 2018
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Panel seeks $80M in state cuts

By Mal Leary, Maine Public

AUGUSTA, Maine — With the size of the state budget problem apparently growing, members of the Legislature’s Appropriations Committee on Thursday started to probe potential cuts in the two largest areas of state spending: education and human services.

“The reality is this is really hard work,” said Rep. Emily Cain, D-Orono, co-chair of the panel. “This is not supposed to be easy; if it were, we would have already done it.”

Faced with declining state revenues, the committee met for a second time this week to work to trim at least $80 million from the current two-year budget. Cain said the panel would meet twice next month and more frequently in the fall to explore further areas that may be cut or eliminated.

“We can’t look at just making programs more efficient,” Cain said. “We have to look at eliminating programs.”

About 40 percent of the state’s General Fund spending is for education, with nearly all of that for state grants to local schools to help pay the cost of elementary and secondary education. Panel members on Thursday were clearly frustrated at the slowness of efforts to consolidate school administration and reduce costs.

Rep. John Martin, D-Eagle Lake, questioned Education Commissioner Susan Gendron about the number of school superintendents in the state. She responded it was 156 before consolidation efforts and is now 130.

“That’s a far cry from the objective of 80,” he said.

Gendron said there are still discussions under way among several communities to consolidate and that the measure proposed by Gov. John Baldacci with the goal of 80 superintendents in the state was significantly changed by the Legislature. That law is the subject of a repeal referendum vote in November.

Gendron said there has been progress in reducing administrative costs through various cooperative efforts and through the use of purchasing cooperatives, but acknowledged more needs to be done. She said an example of a success is the purchasing Web site used by some schools that has produced savings for several districts.

“We found that the districts did get lower prices, and we also found they purchased more from in-state providers through that purchasing portal than in the past,” Gendron said.

Rep. Sawin Millett, R-Waterford, said he is frustrated with school superintendents and other local officials who do not seem to understand the gravity of the state’s budget problems.

“We are really in trouble,” he said. “We need you to be open, honest and candid and not look at the Legislature as a bunch of bad people that are trying to screw you over.”

Martin suggested the state budget situation is so dire that the panel should be looking at some major areas of “off-line” spending such as revenue sharing for municipalities and tax programs. Both revenue sharing and property tax relief programs are not appropriated like other state spending and are paid for directly from state revenues.

The second-largest area of state spending is for human services programs. They account for nearly a third of General Fund spending, and often leverage additional federal funds particularly through the Medicaid program.

Health and Human Services Commissioner Brenda Harvey said her agency already is involved in several cost control efforts including more managed care of those on MaineCare, the state name for the Medicaid program. When committee members asked whether there were more of those types of actions that could be taken to achieve savings, Harvey said not without additional staff.

“We are tracking so many initiatives that are a hundred thousand dollars here and a hundred thousand dollars there, you can’t add more to that list,” she said. “I am clear about that.”

But, Harvey said her agency is continuing to look at ways to hold down costs further, but committee members say improving the efficiency of programs may not be enough.

“We have to look at whether some whole programs should be continued,” Cain said.

Rep. Patrick Flood, R-Winthrop, agreed. He said the panel needs to develop some criteria to review programs across all state agencies.

“One might be how much they cost and how much we can save,” he said. “But we have to set some measures.”

Committee members agreed to look at ways to develop such measures, with all agreeing there will have to be program eliminations to keep state spending within revenues. The panel next meets Aug. 12 and 13 with an agenda still to be developed for what agencies will be asked to testify.

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