May 27, 2018
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Cutting to Balance

For the third time in two years, Gov. John Baldacci has ordered state departments to cut their spending, showing the depths of the national fiscal crisis. While the short-term cuts are necessary to reduce current state spending, lawmakers next year will have to eliminate programs and services to make up for a budget shortfall estimated to be about $400 million through July 2011.

The governor has ordered a $63 million reduction, which will mostly come from K-12 funding and the Department of Health and Human Services, the two areas that account for about 80 percent of state funding. The governor’s cuts will remain in effect until lawmakers pass a budget early next year.

Because the governor cannot make changes to state laws to reduce spending, his options are limited, which is why the reductions target easier-to-achieve solutions such as reducing the state’s contribution to school funding.

While reductions are spread across state government, public schools will take the hardest hit with a $38 million reduction in state education subsidies four months into the fiscal year. Reductions to general purpose aid to schools account for 60 percent of the cuts in the curtailment order. Still, state school funding — which totals about $1 billion a year — has increased substantially over the last decade. In 2002, schools received $709 million from the state; in 2010, it was slated to be slightly more than $1 billion before the curtailment. The increase has come because voters passed LD 1, which required the state to cover 55 percent of school funding.

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.

Within the Department of Health and Human Services, 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 DHHS total $11.1 million, or 17 percent of the reductions.

When they convene in January, lawmakers can make more complex changes, such as eliminating programs or limiting the number of people who can receive certain services. The Appropriations Committee has been looking for areas to cut for months.

Maine is one of 35 states that face budget shortfalls because consumers and businesses are spending less. Across the country, state revenues dropped 7.5 percent in the 2009 fiscal year, according to the National Governors Association.

Revenue collected by the state through October was down 9.3 percent — or $78.4 million — over the same period in fiscal year 2009.

Earlier this year, lawmakers passed a budget for 2010 and 2011 that was $500 million less than the previous two-year budget. It was the first time in three decades that state spending shrunk.

To find a similar level of cuts this time, they will have to be more open to new ideas than they have been in the past. Efforts to merge government agencies, for example, have been met with stiff opposition, as have proposals to eliminate services. If lawmakers can’t stomach remaking government now, they never will be able to.

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