AUGUSTA, Maine — State agencies received word this week from the finance commissioner’s office that they will have to identify $100 million in general fund cuts for the current budget year.
When the state budget was adopted earlier this year, it assumed Congress was going to extend aid to the states through the Medicaid program for another six months. That has yet to happen, although members of Maine’s congressional delegation support an extension.
“We hope that Congress will act, but we have to prepare for the worst,” Gov. John Baldacci said Thursday.
Targeted cuts amid the curtailment range from $39.7 million for the Department of Education to just $22 for the Maine Fire Protection Services Commission.
“We will get by if Congress does not act,” Baldacci said. “We are starting this process and there will be hard choices, but we will get the job done.”
He said after the agencies have filed their plans to reach the targets assigned, he will review them and decide what spending he will actually curtail and what will be deferred for legislative decision.
Rep. Emily Cain, D-Orono, the co-chairwoman of the Legislature’s Appropriations Committee, said she was not surprised at the targets set in the instructions sent to agencies. She said most spending is for education and human services, and they account for nearly 70 percent of the $100 million overall target. DOE has a target of $39.7 million and the Department of Health and Human Services has a target of $29 million.
“I hope that when people see the result of this level of cuts they will realize how difficult it was to make the cuts in the budget we made earlier,” she said. “If we have to make this level of cuts again on what we have already made, it will do harm.”
Cain said cuts to education, both elementary and secondary schools as well as the state’s higher education facilities, are in addition to significant cuts already made.
“I suspect I will get a lot of calls when these targets become widely known,” she said.
The Department of Health and Human Services has a target of $29 million.
Sen. Richard Rosen, R-Bucksport, the GOP senator on the panel, said he was not surprised at the targets and agreed with Cain that if they must be implemented they will cause a lot of concern.
“The curtailment process is a blunt instrument, it really amounts to an across-the-board approach,” he said. “What we need to do is use the scalpel and set spending priorities.”
Rosen said the “scalpel” approach would have to involve the Legislature because it would mean changing state laws and setting spending priorities.
The budget targets affect all agencies receiving state funds. Chief Justice Leigh Saufley said the court budget is all people, except for exempt spending like debt payments on courthouses, so the cuts will be painful. The judicial branch target is $2.1 million in cuts from a $49 million budget.
“We will have to go through the exercise that we have done before,” she said. “We will determine various methods of reaching that target and all will be extremely painful for the public that is trying to get access to justice.”
Saufley said the courts already have reduced hours at some courthouses as part of earlier budget reductions, but she said further reductions have to be considered. She said the courts are holding several positions open to save cash.
Senate President Elizabeth Mitchell, D-Vassalboro, is the chairwoman of the Legislative Council’s budget committee. She said the legislative leaders already are taking steps to reduce spending in the legislative branch. The Legislature is not subject to a curtailment order, but its proportional share of the $100 million target is $1.3 million.
“We will certainly meet our share,” she said. “We have always done that. At this point we are doing it by spending as little as possible. We are managing vacancies, and we have cut out travel except where absolutely necessary.”
Acting Finance Commissioner Ellen Schneiter said out of the $2.7 billion yearly general fund budget, $417 million is exempt for constitutional reasons. The largest single amount exempted is $231 million at the Department of Education for teacher retirement payments.
“There are some expenditures we absolutely have to make,” she said. “We take them out of the base [amount] that we start with for figuring the $100 million in targets.”
Other areas exempt are debt payments for state bonds and other debt such as borrowing by the governmental facilities authority.
The Department of Inland Fisheries and Wildlife has most of its $23.4 million budget exempt because of a constitutional provision that requires appropriations to the agency not fall below the amount in fees the agency collects. It is required to find $16,000 in cuts from the $368,000 of its budget that is not exempt.
Independent agencies, such as the University of Maine System, the community colleges and Maine Maritime Academy, all have cut targets. UMS has a target of $8.4 million, the community college system a target of $2.4 million, and MMA has a target of $370,000.
All of the agencies’ plans to reach the targets are due Sept. 1. The governor is required to issue a curtailment order by Oct. 1 if Congress has not acted to extend aid to the states.