With huge budget shortfall looming, Maine governor orders $63 million in cutbacks

Maine governor orders $63M in department cutbacks

AUGUSTA, Maine — Gov. John Baldacci ordered Maine state departments Friday to curtail spending by $63 million to make sure the budget is balanced.

Baldacci issued the order for the fiscal year ending in mid-2010 as preliminary estimates showed an approaching shortfall in the two-year $5.8 billion budget of $400 million, or nearly 7 percent.

Education and Health and Human Services are the hardest-hit departments, accounting for about 80 percent of the cuts.

The governor’s order stands until the Legislature returns in January for its 2010 session and modifies the current two-year state budget. Lawmakers passed a budget this year that slashed spending by $500 million, giving Maine the first budget in three decades that was smaller than the previous one.

Similar patterns appeared in 34 other states, according to the National Association of State Budget Officers.

“It’s clear now that we will have to do even more,” Baldacci said. “It’s not pretty but it’s necessary. The days and weeks ahead are going to be difficult.”

States continue to struggle even as the national recession eases, he said.

The National Governors Association, citing a survey by the budget officers’ organization, said state revenues overall dropped 7.5 percent in fiscal year 2009, roughly on a par with Maine’s decline. Revenues were below expectations in 41 states during that period.

“States are currently facing one of the worst, if not the worst, fiscal periods since the Great Depression,” says the report by the national budget officers.

As he issued his order in Maine, Baldacci pledged not to support increased taxes to close the budget gap. He plans to submit a budget reflecting the plunging revenues to lawmakers in December. Cuts that have been recommended by department heads will first be evaluated to avoid affecting the state’s most vulnerable, he said.

Much of the $38 million in education cuts he ordered Friday will affect school subsidies. Baldacci said the depth of the cuts are tempered by a bolstering of school aid before the recession hit.

“We are trying to limit the impact in the classroom as much as we can,” the governor said.

Health and Human Services Commissioner Brenda Harvey said the $11 million in cuts to her department avoid programs that draw federal matching funds and target those funded exclusively by the state. Officials also tried to spread the cuts among many services rather that eliminate any outright. Funding for the mentally retarded, child crisis services and maternal and child health services are among those affected.

Baldacci said that state government payroll has been reduced by 1,000 employees during the past six years and that many programs have been restructured to reflect falling revenues.