After $14.3 million revenue adjustment, what’s next for budget process?

Finance Commissioner Sawin Millett
Robert F. Bukaty | AP
Finance Commissioner Sawin Millett
Posted April 04, 2012, at 12:03 p.m.
Last modified April 04, 2012, at 4:39 p.m.

AUGUSTA, Maine — Tuesday’s discovery of an extra $14.3 million in state revenue has thrown a wrench into the Legislature’s budget negotiations late in the session.

The co-chairmen of the Appropriations Committee — Sen. Richard Rosen, R-Bucksport, and Rep. Patrick Flood, R-Winthrop — were expected to meet Wednesday with House and Senate leadership to discuss options.

The statutory adjournment date for the second session is Wednesday, April 18, but most lawmakers are preparing to finish work by Friday, April 13.

The Appropriations Committee has been meeting for the last several days to sort out pieces of Gov. Paul LePage’s $37 million supplemental budget proposal. Many items have been approved but the most controversial pieces are still up for debate.

Also outstanding is a second supplemental budget that needs to address an estimated $85 million to $90 million shortfall in the Department of Health and Human Services budget for the 2013 fiscal year.

Lawmakers also are awaiting additional information from DHHS related to a computer problem that allowed 19,000 MaineCare enrollees to remain on the rolls even after they were ineligible. That mistake could result in Maine being forced to repay the federal government, which covers $2 of every $3 spent on MaineCare.

Most lawmakers are assuming that the DHHS supplemental budget No. 2 won’t be done by the end of next week.

However, the supplemental budget that deals with everything outside of DHHS could be voted out of committee.

“I think we’ll be able to get enough consensus to vote out a supplemental budget by next week,” Rosen said Wednesday. “We’ve already voted on some items and some other proposals could be held.”

Sen. Dawn Hill, D-York, agreed.

“We’re going to have to come back in May either way to deal with DHHS, but I think it’s important to deal with the other supplemental budget while we’re here,” she said.

LePage could be the wild card in the budget negotiations. The governor has not been pleased with the Appropriations Committee since he took office because it has rewritten most of his budgets.

His spokeswoman Adrienne Bennett said Wednesday that the governor’s office has been involved in the budget discussions and acknowledged that things are up in the air.

One of the most controversial pieces in the supplemental budget is likely to be cuts to the state’s general assistance program.

Tuesday’s revenue revelation could be a blessing in disguise.

State Finance Commissioner Sawin Millett briefed the Appropriations Committee late Tuesday to disclose the Maine Revenue Services bookkeeping error that was discovered by his staff earlier this week.

The mistake resulted when a portion of a day’s receipts that were received in January were not processed by Maine Revenue Services. The $14.3 million in extra revenue was a mix of sales tax, corporate income tax and other tax revenue.

Millett called it a human error, not a systems error, and said he has taken steps to ensure that it doesn’t happen again, including conducting in-depth monthly reviews of revenue accounts.

Lawmakers were understanding of the problem and credited Millett for bringing it to them so quickly, but they acknowledged that it definitely puts some of their budget work on hold.

The state budget officer is expected to convene a special meeting of the Revenue Forecasting Committee after this month’s tax filing deadline to see if any adjustments need to be made.

Flood said Tuesday that the Appropriations Committee should wait at least until after that to make any firm decisions.

But those new revenue forecasting projections could bode well for lawmakers.

“If it turns out we have a shortfall that’s much smaller than we initially anticipated, that will make our jobs a little easier,” Hill said.

Rosen said if nothing else the Appropriations Committee will have more data to work with.

Follow BDN reporter Eric Russell on Twitter @BDNPolitics.

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