AUGUSTA, Maine — Gov. Paul LePage announced Thursday that he will move forward with plans to curtail state spending by $35.5 million for the current fiscal year, which ends June 30, 2013.
“I will be exercising my authority to reduce spending in the quickest manner possible,” LePage said in a release issued Thursday afternoon. “My commissioners and I are evaluating our options and we will put in place a plan that is practicable and follows the law.”
After the state’s revenue forecasting panel reduced its projection for state tax collections, Administrative and Financial Services Commissioner Sawin Millett on Monday sent a letter to LePage and legislative leaders recommending a curtailment “as soon as possible.”
LePage said he will likely issue the curtailment order next week. When he does so, he will, in accordance with state law, notify Senate President Justin Alfond, D-Portland, Speaker of the House Mark Eves, D-North Berwick, and the majority and minority leaders of the Senate and House of the “specific temporary reductions made.”
Curtailment allows LePage to make temporary spending cuts by executive order, without legislative review or approval. State law calls for cuts made by curtailment to be done “equitably” and “insofar as practicable, be made consistent with the intent of the Legislature in authorizing these expenditures.”
Alfond and Eves issued a joint statement Thursday afternoon.
“We expect to carefully review the details once they emerge,” Alfond said. “We will be taking a strategic and measured approach to address the shortfall once we reconvene in January.”
Eves said the revenue shortfall “underscores a larger problem in Maine’s economy. It is exactly the reason why we must get to work immediately on measures that truly strengthen our economy and rebuild our middle class.”
Jodi Quintero, spokeswoman for the Maine House Democrats, who assumed leadership positions and majorities in the Legislature on Wednesday, said the party’s leaders hope to receive details about an anticipated supplemental budget from LePage in early January. That would allow that the new Appropriations Committee to begin work quickly on balancing the books for this fiscal year.
The Legislature could restore funding cut by curtailment as part of a supplemental budget.
In addition to the estimated $35.5 million downward forecast for tax revenues, lawmakers will likely have to deal with a projected Department of Health and Human Services budget shortfall of more than $100 million announced last week by the LePage administration.
The LePage administration is expected to present on Jan. 11 its proposal for the two-year budget that begins July 1, 2013.
Last week, Rep. Kenneth Fredette of Newport, the new House Republican leader, and Sen. Roger Katz of Augusta, the new assistant Senate Republican leader, said they support using a curtailment as a temporary measure to immediately contain spending.
“The idea of curtailment, of reducing expenses quickly under executive order, makes sense now in terms of the budget for the rest of this fiscal year,” Fredette told the BDN.
Former Gov. John Baldacci’s administration enacted curtailments of $37.7 million, $79.8 million and $63.1 million in fiscal years 2008, 2009 and 2010, respectively.