Governor John E. Baldacci signs Maine’s budget in the Cabinet Room. Photo by Ramona du Houx

June/July 2007

Ramona du Houx

“Today marks a new day — a bright day for all of our futures. I am extremely proud of the work that has been done to craft an exceptional state budget. We have made tough decisions and set the priorities that will guide Maine for the next two years and beyond,” said Governor Baldacci. “We’ve come together — Democrats and Republicans — and the result is something we should all be extremely proud of.”

On June 7, 2007 Governor John E. Baldacci signed the state’s biennial budget which holds strongly to the principles he outlined in his inaugural address.

On the day that the governor submitted his budget to the Legislature in January, Speaker of the House Glen Cummings took the unusual step of holding a press conference with leaders of both parties to talk about their initial reactions.

“We have said it all along that we do our best work when we work together,” said Cummings. “The governor made some bold policy statements this year and tying them to the budget raised the level of debate in the state around those issues. It ensured that everyone would come to the table to discuss how we could best use the budget as an agent for change and to build a stronger foundation for our future.”

Last year a Brookings Institute Report stated that Maine had an unsustainable school administration bureaucracy that needed to be cut and government programs that needed more efficiency and streamlining. The report also said that investment in targeted business sectors, known as “clusters,” should be made. Innovation and education would be key for the future of Maine in the global economy, and Maine needed to build upon those positive changes that were taking place in these areas and start to implement change in other sectors. The governor embraced the Brookings report, and his budget reflected some of its recommendations.

“This budget gets spending under control. We are reducing unnecessary administration in K-12 education and focusing our resources on the classroom where they belong, while providing property tax relief,” said Governor Baldacci. “We are streamlining state government, especially in Human Services, and we’re investing in higher education and innovation. We have improved the way the state does business while providing the tools to grow our economy and add better paying jobs for our citizens.”

“We have answered the call for more efficient government, better access to quality education and the improvement of Maine’s quality of life with this bill,” said Senate President Beth Edmonds. “There is great potential to keep moving along this path in the future.”

“The people of Maine delivered a clear message to each of us: they told us to rein in state spending — this budget does that by limiting state government growth,” said Senator Peggy Rotundo, Senate chair of appropriations. “They told us to make government more efficient; this budget does that, with over $250 million in program cuts. And they told us to protect the safety net for Maine’s most vulnerable citizens — this budget does that.”

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The governor recognized and thanked Senator Peggy Rotundo, Senate chair of appropriations, who worked all hours of the day and night to finalize the budget.

“This budget makes structural reform in order to achieve a budget that will be sustainable,” said Rep. Jeremy Fischer the House chair of the Appropriations Committee.

The budget was enacted with a 112-29 vote in the House and a 28-7 vote in the Senate which exceeds the two-thirds majority needed. The measure will take effect immediately.

“Last fall we set out to construct a budget that would set Maine on a better course for the future,” said Becky Wyke, commissioner of the Department of Administrative and Financial Services. “Our goal was to control spending so it didn’t grow faster than Maine people’s incomes. Eighty percent of state spending is for education and health. The budget streamlines administration in these areas, reducing costs and allowing us to put our dollars where they are most needed, protecting our classrooms and our most vulnerable citizens. The overwhelming bipartisan endorsement of these efforts is very gratifying.”

The largest portion of the $6.3 billion budget is nearly $2 billion for state subsidy to local schools. In 2004 the people of Maine mandated that state education spending be increased to 55 percent.

“With this budget, we have kept the promise to increase state aid to local education to 55 percent,” said the governor. “This budget contains the first significant reform in the administrative structure of K-12 education in more than 50 years. People realize that we need change in order to have better opportunities. This is a firm fist step in that direction.”

“The governor gave us a bold plan to remake school administration in Maine. It’s important for people to realize that school administrative consolidation is extremely important for the future of our children,” said Rep. Emily Cain, a member of the Appropriations Committee and leader of the education subcommittee. “Families want to know we are providing the best quality education. By taking these steps that’s what we are achieving. I’m proud of what we all have done. This is not the end — it’s just the beginning.”

The budget would shrink the number of school districts in Maine from 290 to about 80, with projected state savings of $36.5 million in the second year of the budget cycle, and ongoing savings thereafter. New districts will be expected to have at least 2,500 students and no fewer than 1,200 students. Location, school efficiency, and other mitigating circumstances will be taken into account during the merging process.

School districts are required to submit merger plans to the state education commissioner by December 15th and then seek approval by local voters on January 15, 2008.

Approximately $553 million is invested in higher education, in this budget. The increased funding will go to the University of Maine System, community colleges and Maine Maritime Academy, aimed at helping to hold tuition costs down and increase Mainers’ access to college education.

“This budget makes good on our commitment to bring education and opportunity within everyone’s reach,” said Speaker Cummings. “A person’s knowledge is the single greatest asset they can have and their best hope for a bright future. This budget will promote hope and opportunity for another generation of Maine people.”

In many cases Mainers come together to work out differences and find solutions, regardless of their political affiliations. It is said that in Maine the people reflect who they elect. Perhaps that’s why there was such bipartisan support for the budget.

“It’s a bipartisan budget, which I think has demanded the best from us all. We’re glad that both sides of the aisle came together in good faith to set in place a budget that not only will provide effective management of the state for the next two years, but also establishes a new and sustainable path for the long term,” said House Majority Leader Hannah Pingree. “At the same time we protected health care for people who need it most and boosted funding to higher education.”

A major provision of the final agreement was to preserve health insurance coverage for Maine’s poorest residents and reduce cost shifts in the health-care system. The budget also includes $1.2 billion for heath care for Maine’s poor families and the elderly.

The state will now pay doctors and nursing homes more to care for people in the Medicaid program, which insures the poor and disabled. The budget will impose tighter controls on the use of Medicaid services, capping Medicaid spending on services for childless adults, and standardizing reimbursements for mental-health services.

Amongst other measures the budget provides, the Department of Corrections will get an extra $7 million to relieve a serious prison overcrowding problem. It also increases funding for the Maine Economic Improvement Fund, and the Maine Technology Institute.

When the governor’s proposed budget was announced back in January, Baldacci promised the people of Maine that he would veto any budget that didn’t achieve property tax relief.

“The plan achieves substantial savings. That means Mainers will be seeing real property tax relief,” said Baldacci. “The budget invests in innovation, research and development, and higher education. These investments are absolutely critical if Maine is going to create sustainable, private sector jobs with good benefits and the highly skilled workers to fill those jobs. With the $295 million bond investment package passed earlier in the year, we are laying the foundation for a brighter, more prosperous future.”