AUGUSTA, Maine — The Legislature’s budget-reviewing committee on Friday approved a spending package for the current fiscal year that closes a gap that’s grown to $166 million. The package now awaits votes in the House and Senate.
Legislative leaders said the Appropriations Committee voted unanimously to approve the plan to balance the budget for the year ending June 30.
“This budget contains difficult cuts to almost all areas of government,” said Senate President Elizabeth Mitchell, D-Vassalboro. “While the pain is truly shared, state government remains capable of carrying out its fundamental missions.”
Democratic Gov. John Baldacci congratulated the committee for completing its work in a bipartisan fashion and “under incredible time constraints.” The governor wanted the committee to complete its work by late January.
The Appropriations panel must now turn its attention to Baldacci’s proposed $6.1 billion budget for the two years starting July 1. That budget seeks to bridge an $838 million gap between revenues and spending.
The budget for the rest of the current fiscal year had to address a gap that had yawned from roughly $150 million to $166 million earlier this week, when Maine Revenue Services identified a coding error in its accounting system.
According to a summary by Democratic leaders, the newly approved supplemental budget calls for a $27 million decrease in funding for K-12 education and a $12 million reduction for higher education. It chops the budget for the Department of Health and Human Services by $34 million and cuts $1.6 million from the Legislature’s budget.
The budget utilizes $56 million from the state’s Rainy Day Fund. It reduces MaineCare reimbursement rates for hospital-based physicians from 89.7 percent of cost to 70 percent of cost, saving the state $1.7 million.
In addition, it includes a technical change to the capital gains tax on “unusual events” greater than $500,000, moving forward $5.1 million in revenue. It also generates $800,000 in revenue by not lowering the Telecommunications Personal Property Tax, which is paid by utilities.
The final budget does not include an earlier proposal to close a unit at the Charleston Correctional Center.
“The cuts have certainly been difficult,” said House Majority Leader John Piotti, D-Unity. “However, the supplemental budget that we pass will greatly influence our work on the biennial budget, and I think we have put together a proposal that is necessary given these economic times.”
Republican leaders have repeatedly expressed concerns about the budget’s effect on payments to hospitals for Medicaid services.
Democrats said the rewritten budget includes a provision that makes settlement payments to the hospitals a top priority for any increase the state receives in federal Medicaid money as part of the economic stimulus package that’s being debated in Washington.