AUGUSTA, Maine — Gov. Janet Mills gave state department heads more time Monday to submit budget plans for next year as they prepare short-term cuts with hope that the federal government will provide more aid to prevent sweeping reductions.
The Democratic governor’s executive order pushes the deadline for submitting department budgets back six weeks to Oct. 19. The state is facing a $1.4 billion revenue shortfall through mid-2023. State law requires the budget to be balanced, spurring Mills to order most department heads to identify 10 percent cuts from their budget by mid-2021.
The state could choose to stem spending this year while more involved items will likely go to the Legislature in the form of a reduction package in 2021, when lawmakers would already be drafting the next two-year state budget. Mills is allowing agencies to have more time to formulate those ideas before she presents a new budget proposal to lawmakers in January.
Recommendations from Mills’ budget department on how to address the $524 million shortfall for this budget year are still being finalized and are expected to be completed next week, a department spokesperson said. They could be made public shortly afterward.
Details on what proposals look like have been scant. Only a few small agencies have publicized their roadmaps so far, including the community college system. Mills has said she wants to avoid major effects on state employees, education aid or health care services. Federal aid for the latter may be key as Medicaid costs take up a quarter of state budget spending.
Mills and municipal leaders have been lobbying Maine’s congressional delegation to push for more federal aid to avoid having to make drastic cuts. Emphasis has been on providing more flexibility for aid received in March, which can only be used for coronavirus-related expenses and not backfilling budget shortfalls for now.
Maine was initially slower than some of its neighbors in allocating those funds. As of last Friday, Mills has only committed about three-fourths of that money. The biggest chunk was spent to backfill Maine’s unemployment fund, followed by business recovery grants and help for school reopening efforts.
The October deadline comes after the federal budget’s fiscal year closes on Sept. 30. The Senate will return next week after a recess, when aid talks are expected to resume. It will also occur around when the state’s revenue and economic forecasting committees are expected to meet again.