May 26, 2018
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Budget goes to Baldacci

By Kevin Miller, BDN Staff

AUGUSTA, Maine — State lawmakers approved a plan Tuesday evening to close a $310 million budget gap by reducing funding for K-12 schools, social services programs and state support for municipalities.

The state spending revisions breezed through the Legislature with minimal debate or discussion, passing on bipartisan votes of 110-35 in the House and 31-2 in the Senate. Gov. John Baldacci is expected to sign the supplemental budget bill today.

“It’s a budget that does the absolute best job we could have done, under the circumstances, to keep Maine on solid ground over the next year and a half,” said Rep. Emily Cain, an Orono Democrat who co-chairs the budget writing Appropriations and Financial Affairs Committee.

When the committee began its work on the budget back in January, state officials were preparing to cut $438 million from the 2-year, $5.8 billion budget. But the gap narrowed to $310 million due to stronger than anticipated revenue flows and news that additional federal money was headed Maine’s way.

That allowed the committee to restore funding to “safety net” programs for the most vulnerable citizens and reduce cuts to many programs. The budget bill passed Tuesday does not contain any new taxes or tax increases.

Spending reductions include:

• $47 million from general purpose aid to K-12 education, including $10 million during the fiscal year that begins July 1. That is down from the original proposal of $73 million in cuts.

• $22.4 million from the Department of Health and Human Services. Lawmakers substantially scaled back proposed cuts to support programs for the elderly and disabled, including restoring funding for hospice care and home-based care.

• $8 million from the University of Maine System and the state’s community colleges.

• $16 million less in “revenue sharing” assistance to municipalities, down from the $27 million in cuts contained in the original budget proposal.

• $2.3 million from the Legislature’s budget.

As a result of Tuesday’s action, Maine’s 2-year budget now stands at $5.5 billion, compared to a $6.1 billion budget for the 2008-09 biennium. The budget also directs roughly $7 million into the state’s now-depleted rainy day fund.

The budget revisions contain several new revenue sources, including an anticipated $1.5 million from Maine joining the multi-state Mega Millions lottery and more than $4 million from a one-time assessment on hospitals.

Lawmakers also saved money this biennium by delaying nearly $14 million worth of payments to programs and by transferring funds from elsewhere, including $4.2 million transferred from the Fund for a Healthy Maine.

Republican lawmakers praised their colleagues for following the Baldacci administration’s lead and resisting the urge to raise taxes. Some organizations had called for a temporary increase of the sales tax or an additional $1-per-pack tax on cigarettes.

But GOP lawmakers cautioned against what they said was an over-reliance on federal stimulus dollars.

Rep. Sawin Millett, a Waterford Republican and former state commissioner of both finance and education, predicted that by his calculations, Maine could be facing a $1 billion “structural gap” in the next budget due to the reliance on one-time funds.

“Yes, we do have a budget, but we have difficult days ahead of us,” said Millett, who is being termed out of the Legislature.

Sen. Richard Rosen, a Bucksport Republican and Appropriations Committee member, R-Bucksport, agreed that the next governor and Legislature will face major challenges. But he described the supplemental budget as “the best possible package” given the economic and political climate both nationally and in Maine.

Rosen also disputed statements that towns will be forced to hike property tax rates in response to the cuts to K-12 education and municipal revenue sharing. He encouraged Mainers to get involved in their local budget decisions.

“Local control is strongly held and defended in this state,” Rosen said.

House Speaker Hannah Pingree, D-North Haven, said she is hopeful that revenues flowing into state coffers will hold steady or increase, allowing lawmakers or the governor to avoid additional budget cuts. But Pingree acknowledged that the next 2-year budget, beginning in 2012, likely will be equally — or more — difficult.

“In 2012, the Legislature will be faced with many of the same issues,” Pingree said. “But the choices we have made this session, while they have been difficult, they have put us on a more stable, long-term path.”

Baldacci praised the Legislature’s bipartisan work on the budget revisions.

“State government will be smaller, we have made important structural changes that will reduce the cost of government going forward and we will begin rebuilding our reserves,” Baldacci said in a statement issued Tuesday evening. “And we have protected our most vulnerable and provided significant support to K-12 education.”

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