AUGUSTA, Maine — Gov. John Baldacci ordered more than $63 million in midyear budget cuts Friday in a curtailment order that heavily targets state funding for education and social services programs.
Faced with a two-year revenue shortfall approaching $400 million, Baldacci took a first step toward balancing the budget by ordering immediate spending reductions even as administration officials and lawmakers prepare to grapple with even larger cuts.
“I don’t take the order lightly, and I’ve considered its implications thoroughly,” Baldacci said. “But we must continue to cut state spending. There is no option. The working men and women of Maine cannot afford a tax increase, and I will not support one.”
While reductions are spread across state government, public schools will take the hardest hit as they slash $38.1 million in state education subsidies from their budgets four months into the fiscal year. Reductions to general purpose aid to schools account for 60 percent of the cuts in the curtailment order.
“District to district, very tough decisions will have to be made,” said Roger Shaw, superintendent of SAD 42 in Aroostook County and president-elect of the Maine School Superintendents Association. Many districts “are at the point of program elimination, not just personnel elimination.”
Maine’s community colleges will take a $1.7 million hit, while the University of Maine System’s budget will be reduced by nearly $6 million.
Some of the state’s neediest residents also may feel the pinch.
The curtailment cuts funding for adult day services for the elderly, adoption services providers, homeless shelters and programs that assist the mentally disabled. Cuts to Department of Health and Human Services programs total $11.1 million, or 17 percent of the reductions.
Health Commissioner Brenda Harvey said that cuts were made to avoid jeopardizing matching grants from the federal government. The level of curtailments to education also were carefully crafted to stay below the threshold for losing federal stimulus dollars.
Education and health and human services programs compose roughly 80 percent of the $5.8 billion, two-year budget lawmakers approved earlier this year.
State finance Commissioner Ryan Low pointed out that a governor’s powers to curtail spending is fairly limited because state law prohibits statutory changes without the Legislature’s approval. So Low said education and social services account for so much of the cuts announced Friday in part because those are the areas where curtailment is possible.
“It doesn’t mean they’ll continue to be as big a part of the solution when we get to the supplemental [budget],” Low said. “That is when you will likely see other cabinets and agencies fill in the difference.”
The curtailment announcement coincided with more bad news about Maine’s economic predicament.
Earlier Friday, the state Revenue Forecasting Committee estimated that the shortfall for the current two-year budget is approximately $384 million.
Money flowing into the state’s coffers through October was down 9.3 percent — or $78.4 million — over the same period in fiscal year 2009. Those figures could change slightly by the time the final report is issued early next month.
The Baldacci administration plans to release the next round of proposed cuts in mid-December, this time in the form of a supplemental budget. The Appropriations and Financial Affairs Committee will begin work in January on revisions to the two-year budget that was already $500 million smaller than the previous biennial budget.
Baldacci said the budget crisis has reached a point where they “no longer have the option of saying no to uncomfortable ideas if they allow us to save money, become more efficient and protect important services.”
While unwelcome news, the $38 million in cuts to education came as no surprise to school officials. At the urging of education Commissioner Susan Gendron, superintendents began preparing for cuts of that magnitude several months ago.
“We’ve actually been preparing for this since midsummer,” said Jim Boothby, superintendent for RSU 25 in the Bucksport area. “We anticipated this curtailment and made a concerted effort not to fill positions if we could find ways to cover those positions. We tried to address this earlier than later.”
Shaw, who oversees schools in Mars Hill and Blaine, said the advanced warning has helped him and other superintendents prepare. But that doesn’t make the task of cutting any easier, he said.
“When cuts come in the middle of the year, you don’t have many places to go other than personnel,” Shaw said.
Betsy Webb, superintendent of schools in Bangor, said she is hoping to avoid any layoffs, but it all depends on how much is cut in the supplemental budget. The curtailment ordered $754,000 in cuts to Bangor schools.
Webb said her system plans to leave one maintenance position vacant, reduce professional leave days for teachers, delay purchases of new textbooks, defer some maintenance or capital upgrade projects and slash supply budgets.
“With the trend of reduced subsidies over the two years, it’s a major concern,” Webb said. “It’s a difficult situation to be in in the middle of the school year.”
Although this round of subsidy cuts has been difficult, RSU 24 Superintendent Bill Webster said the “really scary part” is still to come. With revenues continuing to come in lower than anticipated, school districts will be faced with additional cuts in the next fiscal year and maybe even another curtailment during this fiscal year.
“We’re faced with very challenging times going into the next budget cycle,” said Webster, whose district includes 12 towns in the Ellsworth area.
During his press conference, Baldacci acknowledged that the curtailment would cause pain in schools. But he pointed out that state aid to schools has increased by more than $500 million since he took office. The governor also pointed to efforts to consolidate school administration and find efficiencies in such programs as special education.
“What we are trying to do is limit the impact as much as possible on the classroom,” he said.
The governor’s curtailment plans garnered praise from the other side of the political aisle as well.
The conservative Maine Heritage Policy Center commended Baldacci for insisting he will not support any tax increases. Assistant Minority Leader Sen. Jonathan Courtney, R-Springvale, called the curtailment a good first step.
BDN writer Rich Hewitt contributed to this report from Ellsworth.