March 28, 2024
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Baldacci sees $200M budget gap in wake of new revenue forecast

AUGUSTA – As the state revenue forecasting team sits down to update its budget-governing estimates today, Gov. John Baldacci already has penciled in a number.

Before heading off Friday for the weekend session of the National Governors Association in Washington, D.C., Baldacci said he expected an already diagnosed $95 million budget gap to more than double.

“A little bit higher than $200 million overall,” the Democratic chief executive predicted.

Baldacci’s guess topped an earlier prediction circulated by leaders of the Legislature’s Appropriations Committee, whose members will have to review and render recommendations on whatever package the governor puts forth to bring the state’s $6.3 billion General Fund budget for the current two-year cycle back into balance.

Appropriations Committee leaders have asked other committees to propose ways to reduce spending by $99 million more than the cutbacks already put forth by Baldacci to close a $95 million revenue gap.

Baldacci budget officials sent similar instructions to the heads of state departments and agencies.

As responses have come in, some lawmakers continue to raise questions about whether balancing the budget through cutbacks alone is feasible.

“We’ve been presented with a budget that proposes to be balanced within existing resources,” Rep. Jeremy Fischer, D-Presque Isle, the House chairman of the Appropriations Committee, said in a statement.

“We are getting a picture of what nearly $200 million in strictly cuts would look like. At the end of this process, we will have to decide if that is in the best interests of Maine people,” Fischer said.

Baldacci’s budget-balancing initiative so far relies in large measure on trimming social programs to cover the original $95 million revenue shortfall and to meet other unanticipated costs.

Advocates for various social service programs have expressed displeasure repeatedly and are monitoring what develops.

Baldacci has sought to put new taxes off-limits up to now. Whether a doubling of the budget gap prompts a new approach remains to be seen, but his public emphasis is still on retrenchment.

Saying even successes with consolidation efforts may not be enough, Baldacci said Friday, “We’re going to have to start to look at programs and services.”

An economic slowdown may be proving to be harsher than anticipated, he said while ticking off pocketbook pressures affecting Mainers including high heating costs.

“You have got to make sure that you’re not doing anything to expand that problem,” Baldacci said.

To date he also has resisted tapping $160 million in state reserves funds as administration budget officials warn that applying one-time reserves now to help cover a shortfall will exacerbate budgetary difficulties in the next two-year cycle.

Releasing a budget deliberation recap last week that included Fischer’s comments, the office of Democratic House Speaker Glenn Cummings sought to provide context by breaking out major areas of state spending and saying that about 50 percent of the General Fund budget – $3 billion – goes toward K-12 education and higher education and that about 30 percent – $2 billion – funds health care programs.

When the Revenue Forecasting Committee sits down today, so too do members of the Senate and House of Representatives, fresh from what has been a vacation week for many.

If the forecasting panel wraps up its deliberations today, a new level of budget debate will begin in earnest.

“I expect the news Monday will be grim,” said House Minority Leader Josh Tardy, R-Newport. “That does not change the Republicans’ position that taxes are off the table.”

Tardy said he could see a need for discussion about Rainy Day funds. But, he added, “the issue has not been revenue. It’s spending.”


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