Maine budget committee proposes fix ideas for 2014 and 2015

Posted Feb. 27, 2014, at 7:09 a.m.
Rep. Peggy Rotundo, D-Lewiston
Carter F. McCall | Carter F. McCall
Rep. Peggy Rotundo, D-Lewiston

AUGUSTA, Maine — State lawmakers on the budget-writing Appropriations Committee are gaining steady ground as they work to create a supplemental budget that will balance spending and revenues for 2014 and 2015.

The Maine Constitution requires a balanced budget, and without a supplemental budget offering from Republican Gov. Paul LePage, the committee has been left largely on its own as it attempts to craft a spending document.

In rough numbers, the committee must come up with about $49.3 million in new revenue or spending reductions for 2014 and about $50.3 million for 2015.

After the Legislature overrode LePage’s veto of its budget in 2013, the governor refused to issue a supplemental budget to close the gaps. Traditionally, the governor proposes a budget for the state that the Legislature uses to craft a bill that balances the budget.

As the saying in state government goes, “The governor proposes and the Legislature disposes.”

New taxes proposed

During meetings Tuesday and Friday, the committee reviewed dozens of ideas for both new revenue and savings offered by Republicans and Democrats that include removing the sales-tax exemption for hospitals and private, nonprofit colleges and increasing the state’s cigarette tax.

Other ideas include extending a half-cent increase of the sales tax to service-providing businesses. In 2013, the Legislature approved increasing the state’s sales tax from 5 percent to 5.5 percent, and increasing the state’s meals and lodging tax from 7 percent to 8 percent.

State Rep. Peggy Rotundo, D-Lewiston, House chairwoman of the committee, said Wednesday the ideas were all that members from both sides of the aisle could come up with and that they were not characterizing them as belonging to one party or another.

Hearings will be held March 5 through March 7, with one day devoted to the 2014 budget shortfall and two devoted to the 2015 shortfall, Rotundo said.

And while LePage has not offered a supplemental budget, the commissioners in his Cabinet have brought forward ideas and suggestions, including some that require new spending, Rotundo said.

She said those ideas were included in a list that is being formulated and finalized by the Legislature’s nonpartisan Office of Fiscal and Program Revenue.

Lawmakers have also included items that came from bills that have passed and include so-called “fiscal notes” that will increase the budget. Included in that is a proposal to restore merit and longevity pay for certain categories of state employees who saw those contracted pay increases frozen over the past two budget cycles.

“We decided to put everything in,” Rotundo said. “And we can have a public hearing on all of those items and the public can weigh in.”

Starting from scratch

State Rep. Kathy Chase, R-Wells, the lead House Republican on the committee, agreed that the proposals included almost all of the suggestions lawmakers came up with.

“We pulled in what each caucus felt was reasonable,” Chase said. “We may not agree with all of theirs and they certainly may not agree with all of ours, but we pulled them into one big group.”

While Democrats have been critical of LePage, calling his refusal to issue a supplemental budget a failure in leadership, Republicans have been less strident about building a budget from scratch.

Chase said Wednesday the process was simply different this year than in years past as the committee works to develop a baseline budget.

“Usually, we receive the bill and it’s already done and we can start negotiations right when we get the bill,” Chase said. “But we didn’t have a bill to start with, so we had to create our own.”

Chase said that wasn’t criticism of LePage’s lack of direct involvement in the process.

“Hey, life is full of different little changes and we just adapt,” Chase said. “We just had to adapt to the idea that we had to create the base bill.”

Rotundo was more critical, saying the governor was “ducking his responsibility.”

LePage has said he provided lawmakers with a balanced, two-year budget in 2013, and they rejected it, so it would be up to them to balance the budget when revenues came up short.

Still, his top advisers, including Sawin Millett, commissioner of the Department of Administration and Financial Services, has been involved in the process.

‘Unprecedented territory’

But frustrating lawmakers on the committee are ever-changing numbers from key departments, including the Department of Health and Human Services, which has twice revised downward the scope of its shortfall.

“We are in unprecedented territory,” said Senate President Justin Alfond, D-Portland. “This is the first time that anyone can ever remember in all of Maine’s history that a sitting governor is not doing his job by putting forth a supplemental budget,”

On Wednesday, the Legislature also took the unusual step of passing a joint order that essentially directed the Appropriations Committee to move forward in crafting a budget to meet the state’s constitutional directive.

Alfond noted the importance of a bipartisan budget agreement that would gain a veto-proof majority. The state will not face a government shutdown if lawmakers are unable to do that, but failure to reach agreement would leave balancing the budget to LePage.

The governor would then be able to simply cut spending department by department in what’s known as “budget curtailments” to reach a balanced plan.

Alfond would not speculate on whether that was the governor’s end game. “Go talk to him and his commissioners,” Alfond said.

He did say legislative leaders intended to reach a bipartisan agreement that would put the state’s nearly $6.3 billion, two-year budget in balance.

“We are going to work with our Republican colleagues and allow our Appropriations Committee do their work, and they have showcased time and time again that they can come together and can put together a solid budget,” Alfond said.

 

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