“The Legislature has overcome a daunting task to overwhelmingly pass a responsible State budget during a time of great financial difficulty and uncertainty,” said Governor Baldacci. “This is a hard budget, but the decisions made in it are necessary. The budget calls upon all Mainers to make sacrifices, but it also protects our most vulnerable citizens and positions our State for economic recovery.”
Baldacci released his initial budget in January, which aimed to close an $838 million structural gap. As the recession worsened and state revenues continued to decline, the Governor revised that budget proposal to close an additional gap of $569 million.
“We went from a $6.3 billion budget in September to a $5.8 billion budget. In six months we lost $1.1 billion in revenue,” said Ryan Low Commissioner of the Department of Financial and Administrative Services. Low has worked for the Governor on budgets for many years and has been instrumental in establishing savings. Those reserves are now being used. “$115 million is available in the Rainy day fund, without which we would have had to make deep cuts in education and human services,” he said.
Since February the Appropriations Committee has been working on the bill, which allocates state spending for the next two years. Public hearings were held and the Legislature’s 17 policy committees examined the budget for their area of oversight.
What comes out of the Appropriations Committee other lawmakers generally trust because of the in depth understanding and work the committee undertakes. This year that was very evident with little debate on the floor.
The level of bipartisan support that passed the budget was high. In the House the final vote was 119- 26, well above the two thirds required to pass the budget. The 33-2 vote in the Senate represents the highest number of affirmative votes recorded for a biennial budget in more than 20 years.
Leadership praised the way the Appropriations Committee conducted the work to finalize the budget.
“I applaud the efforts of the Appropriations Committee. They worked together in an open manner to craft this budget under very difficult financial circumstances. By involving the public to such a great extent it is clear to me that the committee looked beyond sheer dollars to gauge the impact that hundreds of millions of dollars in cuts will have on the people of Maine,” said Sen. President Libby Mitchell.
Sen. Bill Diamond co-chair of the Appropriations Committee commented, “This budget was the most challenging task in my 15 years as a legislator. It’s simply a budget of necessity. It’s the best of results in the worst of times.”
Rep. Emily Cain, co-chair of the Appropriations Committee, is proud of the way Democrats and Republicans collaborated on one of the most difficult budget sessions in decades.
“This is a very responsible budget that reflects the current economic climate in our nation and our state,” said Cain. “I hope that we can all point to this budget and say that this is a moment where we put partisanship aside, rolled up our sleeves and got the job done, because it was the right thing to do for the great state of Maine.”
The budget is $500 million smaller than the last two-year spending plan – the first time the state budget has decreased in 30 years. The budget was as fair as it could be by sharing cuts across the board.
Many other states have been forced to raise broad based and sales taxes to keep essential services running, Maine did not.
“Under the best of circumstances, passing a State budget is a difficult undertaking. This year the task has been made even more challenging by a global recession and declining State revenues,” said Baldacci. “From the beginning of this process, I have emphasized the necessity of shared sacrifice.”
The state’s safety net for Maine’s most vulnerable citizens remains intact. Though less money will be spent on MaineCare, foster care and adoption services, residential care for older adults, and mental health problems.
There will be a decrease in funding for higher education, public school aid, property-tax relief programs and legislative expenses.
Even with these cuts Maine’s core services remain sound.
Non-essential government will shut down for 10 days a year. State employees’ merit and longevity pay will be frozen. State workers will pay some for heathcare. Counties and towns will have to stretch resources because of a smaller State subsidy.
Speaker of the House Hannah Pingree said, “The depth of this global recession and the dramatic drop in state revenues has forced us to make some very tough choices. It will keep the doors open and maintain vital services that people in our communities depend on. That is the most important thing.”
To raise money, the budget increases taxes on smokeless tobacco, lowers business equipment tax reimbursements and reduces indexing.
Recovery Act funds helped in some areas, but as the governor put it, “I’d rather have an good economy without recovery act funds, than a bad economy with them.”
Maine was doing well financially before the recession. Fiscal responsibility had given the state surpluses.
“I understand the difficulty of the budget and the debate that it brought on. I know that every one of us could find something in the budget that we dislike. But I think this budget represents the values and priorities of our State and demonstrates why our home is different from so many other places,” said the Governor.
Working to find practical solutions, verses working for a political ideology, really helped the budget process by creating a tone of respect.
“It is not the problems we face that set us apart. It is the way we choose to deal with them. They put aside differences. They compromised. They put the people of Maine and the greater good above their own interests and desires. That leadership, that drive for consensus and a common-sense solution demonstrates the Maine values of hard work and practicality,” said the Governor. “There is still much work to do, and we must keep a cautious eye on the State and national economy. But if we can continue to approach the challenges facing the State with the same spirit of consensus and bipartisanship that guided the budget, we can meet any challenge.”