Budget team to confront $1B shortfall

By Kevin Miller, BDN Staff
Posted Nov. 16, 2010, at 8:36 p.m.

AUGUSTA, Maine — Gov.-elect Paul LePage on Tuesday named the members of a 10-person team charged with crafting a two-year budget that addresses a $1 billion shortfall without breaking his campaign promise to hold the line on taxes and forgo “budget gimmicks.”

LePage chose Rep. Sawin Millett Jr., a Waterford Republican and former state finance commissioner, to co-lead his budget-drafting team as it grapples with the triple whammy of rising government costs, flat revenue projections and the end of federal stimulus funding.

“There are no easy solutions to Maine’s problems,” LePage said Tuesday during a State House news conference. “But I am pleased to be joined in the search for answers by some of the foremost experts on Maine budgeting.”

Millett, a longtime member of the Legislature’s Appropriations and Financial Affairs Committee, will lead a bipartisan group that includes current and former legislators, business owners and Gov. John Baldacci’s former finance commissioner, Ryan Low.

The group will be co-chaired by Tarren Bragdon, executive director of the conservative-leaning Maine Heritage Policy Center, who also is helping lead LePage’s transition team.

According to recent estimates, LePage and the next Legislature are facing an estimated $1-$1.2 billion shortfall for the two-year budget that begins in July. While tax revenues are expected to increase slightly this year, so are the costs of running government.

Baldacci and the current Legislature slashed hundreds of millions of dollars from the budget in recent years, reducing spending to below 2005 levels. But the Baldacci administration and lawmakers were able to blunt impacts on state services thanks to billions in federal stimulus money, most of which is about to dry up.

Up to half of the anticipated shortfall stems from Maine’s constitutional obligation to pay 55 percent of K-12 education costs. Maine has never reached that threshold and has fallen further behind in recent years, thereby putting more pressure on local property taxes.

The likelihood the new administration will reach the 55 percent mark is unrealistic in the coming budget, LePage said during the campaign. But he said he believes the state has an obligation to meet that threshold eventually.

On Tuesday, LePage offered few specifics about how he plans to cut spending but said he does not agree with the current reliance on unpaid furlough days for state employees. Instead, LePage suggested that he plans to thin the ranks of state employees.

“During the campaign, I campaigned on reducing the size and scope of government,” the Republican governor-elect said. “I will hold true to that.”

Repeating another line from his campaign, LePage also said the state cannot claim to have balanced its budget when it owes hospitals hundreds of millions in back payments for Medicaid services, a budget tool he dismissed as a “gimmick.”

Asked about the much-maligned Dirigo Health program that provides health coverage to the uninsured, LePage replied, “Dirigo is on life support. I would like to put it out of its misery.”

He also hinted at changes to the pension system for state employees but said they are still kicking around ideas.

Most of LePage’s budget-drafting team are familiar faces in Augusta. In addition to Millett and Bradgon, other members include:

Millett held Cabinet-level positions for four governors — Republicans and Democrats — over 18 years. More recently, he has served as the ranking Republican on the Appropriations Committee. Termed-out in the House, Millett lost a Senate campaign in November.

Millett said his goal is to present a responsible policy document to the Legislature next month. During an interview, he acknowledged the tough road ahead as the LePage administration and lawmakers attempt to cut spending after three years of spending cuts.

But Millett said the state must prioritize and then reduce or eliminate programs deemed less important.

“Everything really is on the table,” Millett said.

In a statement, Rep. Emily Cain, an Orono Democrat who was the House chairwoman of the Appropriations Committee, praised LePage for his bipartisan team, particularly Millett and Low. Cain, who is running for the post of House minority leader, also said she looked forward to providing input on the budget.

“I do have initial concerns about the governor-elect’s statements regarding cutting the state’s work force as well as health care to our most vulnerable citizens,” Cain said.

http://bangordailynews.com/2010/11/16/politics/354448/ printed on April 21, 2014