Round 2 of spending cuts proposed
SOME BELT-TIGHTENING IN GOV. JOHN BALDACCI'S PLAN
• Cut school spending by $34.1 million.
• Cut $500,000 from the Gov. Baxter School for the Deaf.
• Cut $7 million from UMaine system, about $2 million from the Maine community colleges and about $300,000 from Maine Maritime Academy.
• A net loss of 71 state jobs.
• Close six Deptartment of Health and Human Services offices.
AUGUSTA — Gov. John Baldacci has responded to a worsening budget shortfall by proposing a new round of spending cuts that would trim education funding, restrict Medicaid services and eliminate 71 state jobs, all to keep the state in the black through June 30, 2009.
The plan, which now goes to the Legislature's Appropriations Committee, retains Baldacci's earlier opposition to raising taxes as a budget-balancing tool.
The package would not dip into the state's savings accounts to balance the books, relying instead on reduced spending, fee increases and account transfers to eliminate half of the projected $190 million shortfall. A round of cuts proposed by Baldacci in January would fill the rest of the hole, also without increasing taxes.
The plan would increase the fee for state-run background checks, from $25 to $31, and raise the cost of the license that out-of-state malt liquor and wine makers pay to sell in Maine, from $600 to $1,000.
Some lawmakers reserved judgment on the proposal until they study it more closely; others alternately praised or criticized Baldacci's opposition to tax increases.
HOLDING FIRM ON TAXES
The state teachers union and an advocate for the poor decried the plan's impact on local schools and welfare recipients and suggested that higher taxes should be part of the mix to blunt the need for program cuts.
Still, some lawmakers and advocates conceded that the cuts, as a whole, are not as severe as they had feared.
The two budget revisions combined would trim general-fund spending from $3.1 billion this fiscal year to $3 billion next year, marking only the fourth time in 35 years that state spending has been reduced from one year to the next, according to documents released by the administration.
Baldacci, who presented his latest proposal Wednesday, said at a State House news conference that it was "a very difficult day for all of us" because of the impact the cuts would have. He said the state cannot turn to tax increases to address the problem because inflation, as well as escalating fuel and energy prices, make it impractical to expect Mainers to pay more than they do now.
"We must rebalance government without adding to the burdens Mainers are already struggling to overcome," even though the proposed cuts are painful, Baldacci said.
If the economy continues to deteriorate, he said, this second round of cuts in the $6.3 billion two-year budget "may not be the last one."
If the Legislature passes a budget that raises taxes, "I won't sign it. It won't become law," the governor said.
TOUGH DAY FOR EDUCATION
The departments of Education and Health and Human Services would bear the brunt of the latest budget revision, which would trim spending at those agencies by a combined $61.6 million.
The Department of Education faces a $34.1 million cut in funding for education next year, including a $23.1 million reduction in direct state payments to schools, which were scheduled to get about $1 billion from the state next year.
That would slow completion of the state's move toward a requirement that it pay 55 percent of funding for local schools.
The University of Maine System, Maine Community College System and Maine Maritime Academy, which escaped unscathed in the first round of cuts, were not so lucky this time. Baldacci wants the Legislature to trim $7 million from the UMaine System, close to $2 million from the community colleges and more than $300,000 from Maine Maritime Academy.
"Everything should be on the table" as the state tries to balance the budget, including spending cuts, savings withdrawals and tax increases, said Chris Galgay, president of the Maine Education Association, which represents teachers and other educators.
He said the governor's plan would have a "devastating" effect on schools and could trigger increases in local property taxes.
The university-system cuts are "extremely troubling," said Chancellor Richard Pattenaude, because they could force state universities to raise tuition by up to 14 percent and eliminate hundreds of classes, which would "make it harder for students to complete their degrees."
The plan would force about 5,600 of the state's 267,000 Medicaid recipients to pay a $25 annual enrollment fee to be insured by that program. The affected adults have incomes between 150 percent and 200 percent of the federal poverty level.
LOSING A 'SAFETY NET'
The governor's latest package would provide $8.4 million to compensate for lost federal Medicaid funds that are used to help disabled people identify and access the services they need. But the plan also would eliminate prescription-drug coverage for thousands of childless adults enrolled in the program.
"We're very concerned that the cuts really do eradicate the safety net" for the state's most vulnerable people, said Sara Gagn Holmes of Maine Equal Justice Partners, which advocates for the poor.
Many childless adults on Medicaid suffer from chronic illnesses, she said, so denying prescription coverage to "the poorest of the poor," with incomes of less than 100 percent of the poverty level, will compromise their health and undermine their ability to function as productive members of society.
She said the $25 Medicaid enrollment fee for some adults represents an expense for people who can ill afford any additional costs.
The latest proposals "aren't as horrible" as lawmakers had feared, but they are onerous when combined with the earlier reductions, said Senate President Beth Edmonds, D-Freeport.
That first round included more than $60 million in social-service cuts affecting the poor, the mentally ill, foster parents and other Mainers.
Edmonds said she's "very disappointed" that Baldacci has vowed to reject a budget that raises taxes.
Assistant House Minority Leader Robert Crosthwaite, R-Ellsworth, took the opposite view. Crosthwaite said it's commendable that the governor's plan raises no taxes, but unfortunate that it increases fees.
The Appropriations Committee will hold public hearings on the plan Tuesday and Wednesday.
Staff Writer Paul Carrier can be contacted at 622-7511 or at:
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