AUGUSTA, Maine — As policy committees started to report back to the Appropriations Committee last week, it was clear several of the governor’s proposed budget cuts were facing opposition. By the weekend, major sections of the plan were under attack.
“We are just saying no. There needs to be some more revenue, there has to be more revenue. You just can’t keep cutting,” said Sen. Joe Brannigan, D-Portland, co-chairman of the Health and Human Services Committee.
He said his committee was “near unanimous” to limit further cuts in programs for children and young adults who need around-the-clock supervision to protect both themselves and others. The budget cut items rejected by the HHS committee added about $20 million to the budget “hole” that needs to be filled to balance the roughly $5.8 billion two-year budget plan.
“That brings the budget hole to about $100 million that we will have to find,” said Rep. Sawin Millett, R-Waterford, the GOP lead on the Appropriations Committee.
“There are other report-backs where committees have rejected the governor’s proposals,” he added.
But Sen. Bill Diamond, D-Windham, co-chairman of the committee, said that even with the strong objections being raised to parts of the budget, the panel will reach a compromise.
“We will have to make cuts and do things we do not want to do,” he said, “and the Republicans will have to do the same.”
While many of the governor’s original budget proposals (together with the changes added to meet the expected loss of $569 million in state revenues re-projected last month) have been accepted by both policy committees and the Appropriations Committee, there are several that have not.
Some committees have flatly rejected parts of the governor’s plan, while others have offered alternatives that cut the same amount of money as the governor’s plan but do it differently.
The State and Local Government Committee panned the proposal to require state workers to take 12 unpaid days off a year to save more than $15 million.
“It is unfair because not all workers will be affected,” said Rep. Terri Hayes, D-Backfield. “The essential or emergency workers or whatever we are calling them will not lose pay, but other workers will.”
The panel suggested that instead of the shutdown days, all state workers would be required to pay 10 percent of their health insurance premiums. Currently a state worker’s health insurance is entirely paid for by the state.
Another alternative proposed late Friday by Senate President Elizabeth Mitchell, D-Vassalboro, suggested that instead of the shutdown days, all state workers would lose seven paid holidays in budget year 2010 and eight in 2011.
She also proposed freezing merit pay only in the first year and phasing in the requirement for paying a share of health insurance, 5 percent in the first year and 10 percent in the second.
“I am not saying the unions are agreeing to this,” she told the panel. “But I am saying I have talked with some of them about it as a better way to achieve the cuts.”
Her plan would save a little more than the governor’s proposal because she would include the legislative branch in the plan.
Democrats on the Tax Committee were not enthusiastic about the governor’s proposal that would have Mainers paying more in income taxes over the next two years and likely additional property taxes. Republicans rejected nearly all of the tax provisions in the governor’s plan, leaving it to the Appropriations Committee to try to reach a compromise.
“We don’t think Mainers can afford any more taxes,” said Sen. Richard Nass, R-Acton, a member of the Tax Committee. “We think there are more cuts that can be made and should be made.”
He suggested Maine’s Medicaid and welfare programs can be cut to “the national average” and still provide an adequate safety net for poor Mainers, a view not held by all Republicans and rejected by many Democrats.
But even Democrats are not excited by the governor’s proposal to freeze personal income tax rates at current levels, eliminating the annual reductions that are built into the tax code. That means approximately 450,000 Mainers will pay about $32 million more in income taxes over the next two years than they would have.
“There is some real heartburn around the cut in municipal revenue sharing,” Millett said.
The governor wants to take about $12.4 million from the revenues sent to cities and towns. That is on top of the reduction they have seen as state income and sales tax revenues have gone down.
“There is a fear that will end up as a shift to the property tax,” said Rep. Tom Watson, D-Bath, the co-chairman of the Tax Committee. “There is a hope they will find cuts at the local level and not raise taxes.”
The committee also is finding additional revenues through fees and expansion of state liquor stores. The panel accepted language that will allow 40 new liquor agency stores in the first year and an additional 40 stores in the second year of the budget. There are now 367 stores licensed to sell liquor in the state.
“These are licenses allowed under the cap in the current law,” Liquor and Lottery Director Dan Gwadosky told lawmakers. He said this was not his proposal. “What this language does is address allowing more licenses to be issued by changing the population requirements.”
The proposal was in legislation sponsored by Diamond. Diamond said creating new population “tiers” would allow additional stores where they are needed and generate about $1 million a year in new revenues.
“In my town, in Windham, we have 17,000 people now and significant growth in the summer,” he said. “This would let us go from three to five stores.”
On Saturday the panel adopted several small fee increases to fund three new positions at the Department of Marine Resources to monitor the state’s shellfish industry. Without that action, federal officials were threatening to ban sale of Maine shellfish to other states and countries.
The panel wants to complete the budget this week, grateful that the Department of Health and Human Services was able to pay Medicaid providers last week with existing resources. The money is expected to run out this week, DHHS Commissioner Brenda Harvey told lawmakers.