“It’s not everything that the industry was hoping for, but I believe it’s a workable compromise.” That sentiment, expressed by Gary Hammond, a member of the Maine Dairy Industry Association, sums up the conclusion many in and out of Augusta have reached on the nearly $6 billion budget approved by the Legislature’s Appropriations Committee. That “workable compromise” now heads to the full Legislature where it deserves support.
The budget approved by the committee early Tuesday morning includes $5.8 billion in spending, $500 million less than the current two-year budget. This spending reduction is appropriate given the economic conditions, said Josh Tardy, the House Minority Leader.
He, like his Democratic counterparts, praised the Appropriations Committee for working together to craft a budget that reduced ongoing expenses. The state employees union also deserves credit for accepting necessary, but unpleasant, money saving changes.
The budget introduces employee contributions for their own health insurance. Employees would contribute toward the cost of their health insurance based on their salary. A wellness incentive plan also will be introduced to encourage state workers to make healthy choices, which also aims to reduce long-term health care expenses.
The budget plan includes 10 government shutdown days in each of the coming two years. This will save close to $14 million. A freeze on merit and longevity pay will save another $12 million.
While not raising taxes — a political nonstarter because the budget must pass by a two-thirds vote — the budget does delay changes in the state’s rules that will put off reductions in taxes. It also, by necessity, takes more than $90 million from state reserves to balance the budget for the current fiscal year, which ends on June 30. Another $24 million would be taken from the rainy day fund next year.
School funding will be reduced by $69 million in 2011, a portion of long-standing state reimbursements to hospitals will be delayed and MaineCare spending will be reduced through changes in benefit management and some program cuts.
The school funding cut and reductions in municipal revenue sharing likely will result in increased property taxes, so the claim that legislators didn’t raise statewide taxes is a bit disingenuous. Likewise, the use of $400 million federal stimulus money to balance the state budget is a short-term fix that is not an alternative to further trimming government spending. The budget creates a Commission to Recommend Streamlining of State Programs and Services and books $30 million from this work. There have been numerous previous efforts to streamline government and reduce spending that have not resulted in significant savings. However, putting a number on paper will make the panel take its work seriously.
This budget offers a reasonable way to bridge the shortfall while setting the state on a path to a more sustainable financial future.