Gov. John Baldacci made official Wednesday what departments across state government have expected for weeks: spending cuts that affect money already budgeted.
Because of lagging revenues, Baldacci ordered a curtailment of $80 million in the budget that ends June 30, 2009. The cuts, which will affect virtually every department in the executive branch, include a continued freeze on hiring and layoffs of four employees in the Department of Health and Human Services.
Earlier this month, the state Revenue Forecasting Committee estimated that because of the widespread economic downturn, revenues for the current budget would fall up to $150 million short of projections. That committee is scheduled to finalize that estimate Friday.
The $80 million curtailment ordered by Baldacci is part of a three-phase process to rein in state spending to match revenues. The next step is a supplemental budget proposal that Baldacci said he will present to the Legislature in December.
If revenue projections hold, that means the supplemental budget could include another $70 million in cuts to current spending plans. The third phase of the process is development of the next biennial budget, which runs from July 1, 2009 to June 30, 2011. Preliminary estimates for that budget are that a structural gap between the cost of services now being offered and revenues could reach $500 million. The current two-year state budget totals $6.25 billion.
“Early this year it became clear that Maine would not escape the national recession,” said Baldacci to a throng of reporters and state employees during a news conference. “I do not take these cuts lightly; real people will be affected. Real lives will be touched in every community across the state.”
The curtailment process limits the governor from cutting programs in a way that would violate the intention of the budget passed by the Legislature. Asked whether that means more serious or substantive cuts will be included in his supplemental budget proposal, Baldacci said that may in fact be the case.
“We all want to make sure … we’re doing this with deliberation and thoughtful analysis,” he said. “We want to make sure we balance the budget, but we have a responsibility as a government to provide a safety net for vulnerable people.”
None of the cuts ordered in the curtailment affect the judicial or Legislative branches. Baldacci said he would initiate conversations with those branches Thursday about proposals that might end up in the supplemental budget.
According to prepared remarks by Sen. Elizabeth Mitchell, D-Vassalboro, who was nominated last week to be the next Senate president, 41 states face budget shortfalls in the current fiscal year. Maine’s shortfall of 4.9 percent compares favorably to other states, such as California, which has a 9.4 percent shortfall, and Rhode Island, which is struggling with a 11.4 percent gap.
“As dire as the situation is in Maine, prior efforts to trim the state budget appear to have left state finances in a better position than they may otherwise be,” said Mitchell. “Maine is not alone facing the effects of the Wall Street meltdown but the work done last session has put us in a more competitive position.”
In a joint statement, the new Republican leaders of the House and Senate said they want to study the details of Baldacci’s proposals before passing judgment.
“These are turbulent times that require difficult decisions,” reads the statement. “While we hope it may be possible to identify alternative reductions in some areas, particularly with respect to education, we believe the Legislature is prepared to work with the governor on a bipartisan basis to achieve the required spending reductions while preserving a safety net for our most vulnerable citizens and protecting public health and safety.”
Among the curtailments are the following:
– Cutting $27,046,649 in general purpose aid for education. Education Commissioner Sue Gendron said a list will be circulated Friday that details how this cut will affect each community.
– Reducing funding for adult education by $327,229.
– Reducing funding for long-term care administered by the Department of Health and Human Services by $409,000.
– Cutting four positions and freezing four others at the Dorothea Dix Psychiatric Center, for a savings of $183,524. The four people affected by the layoffs have already been notified that they will be out of their jobs as of Jan. 1, 2009.
– A cut in funding for Maine Maritime Academy in Castine of $476,374. A note attached to this cut states that the college’s board of trustees will implement the cuts but could not detail what the impact on the institution will be.
– A $2,928,354 cut at the Maine Community College System, which will lead to the layoff of 12 support positions and the reduction of scholarship funding, capital projects and other items.
– An $8,372,135 cut in funding for the University of Maine System, which will trigger the use of reserves and a range of other cuts.
– Delaying filling numerous open positions in state government.
– Cutting back travel by employees of several agencies.
– Closing the Land Use Regulatory Commission’s Rangeley office.
– Delaying the start date for seasonal park employees in the Department of Conservation for one week.
