By Ramona du Houx

May 23, 2010

Signing the 2010 balanced budget, that is now at 2001 levels. Photo by Ramona du Houx

Thirty-three states have raised taxes to balance their budgets due to the recession. With citizens spending less, and manufactures producing less, the state takes in less revenue. At the same time state government needs additional funds to help meet the increased demand for more assistance.

In April, Maine’s Department of Labor released a report that said over two and a half thousand jobs have been added in Maine’s economy this year. Economists say this is a confirmation that the state is emerging from the recession. That would not have been possible without the fiscal responsibility of the Baldacci Administration, and the Federal Recovery Act.

“Democrats and Republicans came together during one of the most difficult economic times since the Great Depression. We have passed a responsible budget that protects lives, but also makes significant reductions in State spending,” said Governor John Baldacci as he signed An Act Making Supplemental Appropriations and Allocations for the Expenditures of State Government.

Re-balancing the budget, when new forecasts showed the state was losing revenues, was a difficult, pains staking effort that the Appropriations and Financial Affairs Committee and Governor’s Office continually worked on during the recession. They held the line and refused to raise income taxes. They initiated structural changes, which resulted in savings, and they were able to readjust the figures favorably with some federal aid.

The government said that in 2001, State spending was $2.65 billion. In 2011, the amount will be $2.69 billion. So state spending is back to the level of 2001, while costs have risen across the board.

“In December, when I presented my plan to close an anticipated $438 million gap in the State budget, my priorities were to align spending with revenues, make government more efficient and avoid raising taxes, while protecting the most vulnerable,” said the governor.

“State government will be smaller; we have made important structural changes that will reduce the cost of government going forward, and we will begin rebuilding our reserves.”

In signing the legislation, Governor Baldacci recognized the work of the members of the Appropriations and Financial Affairs Committee, legislative leaders, and the members of his administration who worked to re-balance the State budget. “These are not the best of times but we have worked to make the best of the times we face,” he said.