As the Legislature’s Appropriations and Financial Affairs Committee hears testimony on the merits of LD 1671, also known as Gov. Baldacci’s $438 million supplemental state budget plan, it has already given a green light to legislation of its own creation.
“An Act to Streamline State Government” was created as part of the committee’s 2009 charge to find $30 million in ongoing state savings. The committee now recommends doing so, in part, by moving state positions from the General Fund to a fund created with dedicated revenues.
Ten percent of all state expenditures in 2009 were funded through Other Special Revenue (OSR), not the General Fund.
OSR represents fees collected on everything from special licenses to the oil storage tanks lining South Portland’s waterfront. In the current biennium there are 693 accounts tallied as OSR.
LD 1668, which was amended this week by the House and Senate and which is being prepared for final vote, looks to take at least 29 state positions and reallocate them – in part or whole – from the state General Fund to OSR and federally funded programs.
Positions slated for reallocation range from park rangers in the Allagash to mechanics within the Maine Dept. of Defense. The Maine Dept. of Health and Human Services would see at least 21 position transfers.
This type of account swapping is not new to state government.
The state has moved positions from the General Fund to OSR and back again depending on staffing and program needs. As such, the Dept. of Administrative and Financial Services has not offered a specific head count associated with LD 1668, noting as many positions may be moved from the General Fund as returned to OSR.
Expenses eliminated by LD 1668 are largely piecemeal. For example, one recommended savings of $20,000 will be found by removing a provision requiring the state to advertise statewide referendum questions in Maine’s daily newspapers. Another recommendation would eliminate $6000 in costs by removing portable radios for the state’s liquor enforcement agents.
Proposed cuts to revenue sharing contained in LD 1668 are more general than other swaps and eliminations found in the legislation, a point that troubles the Maine Municipal Association.
LD 1668 would remove $625,000 from municipal revenue sharing in 2010. That’s in addition to the $27 million reduction in revenue sharing proposed by Baldacci in his supplemental budget and the $44 million reduction approved by the legislature in 2009.
“The bill was designed to streamline state government,” Geoff Herman of the Maine Municipal Association, said. “We are not the experts on that, but of all the things that might be done taking a scoop out of revenue sharing does not seem to be one.”
If Baldacci’s budget proposal and LD 1668 passes, municipalities will see some $71.6 million less in revenue sharing over a two-year cycle. Municipal Revenue Sharing in 2009 was $121 million.
Although the cuts contained in LD 1668 have been described as a one-time correction, Herman wonders why revenue sharing landed in the hands of the Appropriations Committee.
For 31 years the state’s portion of revenue sharing has been based on a percentage of the General Fund, Herman said.
Revenue sharing took the place of an inventory tax once assessed to businesses in recognition that property taxes alone could not fund necessary municipal services. As such it has not required budgetary review for more than three decades, Herman said.
LD 1688 has cleared the House and Senate and amendments have been made to the original bill. Amendments, if approved, will re-name the legislation “An Act To Implement the Recommendations of the Initiative To Streamline State Government and To Make Other Necessary Changes to Law.”
The title amendment does little to reduce the reality the state is changing its stance on revenue sharing, Herman said.
