AUGUSTA, Maine — Gov. Paul LePage has ordered state agencies to identify ways to cut $100 million in spending in anticipation of losing federal funding because of the deficit reduction law enacted by Congress this week.
A 12-member state task force already established to find $25 million in cuts will be asked to look at the additional proposals, LePage said. When the Legislature approved a $6.1 billion, two-year budget in June, it included a $25 million shortfall for fiscal year 2012-2013, which begins next July 1. The task force is scheduled to make its recommendations by Dec. 15, with the Legislature having the final say.
“I have asked each commissioner to look at their department and agencies and to start from zero,” LePage said Wednesday. “Look as if you have nothing [at] your disposal and you are to build an agency to provide services and you are to look at every program.”
He said while the state will not know exactly where the federal cuts will occur for months, the state cannot wait to know the specifics and he is confident the additional $75 million in cuts will be needed to at least partially offset the federal cuts. He said he is convinced the state can do a better job in providing services by this zero-base approach.
“We have to prioritize, we have to live within our means and we have to use our resources wisely,” LePage said. “Do I have all the answers now? No, but by the end of the year we will have a much better feel for where we need to be going.”
He has been personally reviewing all of the Office of Program Evaluation and Governmental Accountability reports to see if all the recommendations have been implemented. He said the state needs to be more efficient in the services it provides and that the OPEGA studies are a useful tool.
“We know there are federal cuts that we have to address, like in LIHEAP [Low Income Home Energy Assistance Program], where we are looking at $30 million in cuts already. We are not going to let people freeze this winter, not on my watch,” he said.
Sen. Richard Rosen, R-Bucksport, co-chairman of the Appropriations Committee and a member of the budget task force, said Thursday it is clear the federal deficit reduction efforts will result in funding cuts to the state and will affect a range of programs. He said some agencies are more dependent on federal funds than others.
“I think we should look for maximum savings from this exercise,” he said. “I think that it is entirely appropriate to have a target that is above the $25 million that is required to maintain balance in the budget.”
Rosen said until the specific budget cuts are made by Congress, Maine will not know the total impact it faces, and the additional $75 million sought by LePage may not be enough. He said it is unlikely the governor will recommend, or the Legislature approve, replacing all of the federal cuts with state resources.
“There will have to be a prioritization of all spending,” he said. “That will be difficult — we all know that.”
Sen. Dawn Hill, D-Cape Neddick, also serves both on the task force and the Appropriations Committee. She said it is good that the governor is acting to get ahead of the budget and agrees the task force is equipped to look at proposals in excess of the $25 million target.
“I thought getting to the $25 million would be achievable, but not easily achievable,” she said Thursday. “A hundred million sounds like a huge figure to reach given what we just went through with two supplemental [budgets] and the biennial budget. We are going to have to roll up our sleeves and be creative.”
Hill said everything will have to be on the table, including additional revenues or fees to keep essential programs operating in the state. She acknowledged any new revenues will be a difficult sell.
LePage said the federal government has been avoiding the deficit problem for years. He said the federal government should be like the states and not be able to spend more than they bring in from taxes.
“They [the federal government] had to address the deficit problem,” he said. “They have just been kicking it down the road for 25 years.”
LePage shares the concern of members of Maine’s congressional delegation about the creation of a special committee that will make recommendations which Congress must accept in total or reject. The backup to Congress rejecting the package of $1.5 trillion in cuts over 10 years is an across-the-board set of cuts in both national security funds and discretionary spending.
“Across the board is the absolutely worst way to cut, the absolute worst way. You need to set priorities,” the governor said.
The budget-cutting task force has yet to hold its first meeting but is expected to start its work this month. The task force includes Finance Commissioner Sawin Millett, the chairman; and four lawmakers who serve on the Legislature’s Appropriations Committee. The other seven members include business leaders, former legislators and a local government official.
The Associated Press contributed to this report.
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