State budget shortfall sparks committee debate Finance chief defends governor

AUGUSTA – Budget-writing lawmakers questioned and occasionally jousted with King administration officials Friday over the severity of Maine’s fiscal problems, which are reflected in the short term in a revenue shortfall of $248.6 million.

Gov. Angus King’s finance chief, Janet Waldron, defended the governor’s action to date in addressing the biennial shortfall, pegged at close to 5 percent of General Fund revenue.

Waldron also said the administration was trying to bridge the gap without proposing new taxes or reducing state aid to local schools.

“We will have a balanced budget to present to the Legislature in early January,” Waldron said.

According to Waldron, a state Rainy Day Fund holding slightly more than $100 million in uncommitted money is being treated as a source of “last resort.”

A recent recalculation of revenue projections created the shortfall of nearly a quarter-billion dollars for the current two-year budget cycle. The recalculation by the state’s Revenue Forecasting Committee took into account tax collections that have been lagging behind estimates.

Budget officials said Friday there was a General Fund balance of about $4 million that could be applied to reduce the gap slightly.

Looking toward more substantial measures, officials said the King administration still was working to develop a proposal for revising the current budget to bring it in line with the more pessimistic revenue figures.

State Budget Officer John Nicholas said the administration basically had outlined “the framework of what the budget will be,” but added that “there needs to be a lot of refinement.”

Nicholas said officials could not guarantee but would attempt to have a budget package before lawmakers when the Legislature convenes for its 2002 session on Jan. 2.

House Republicans on the Appropriations Committee took the lead Friday at a committee meeting in calling for more aggressive action by the governor to cut spending.

The administration has said unilateral steps including a freeze on some hiring and a reduction in grants have generated savings of more than $15 million.

“We should be doing more now,” said Rep. Richard Nass, R-Acton, arguing that the sooner initiatives are undertaken to rein in spending, the smaller will be the gap left for the Legislature to deal with in January.

Nass and other committee members, including independent Sen. Jill Goldthwait of Bar Harbor, also warned of a potentially more sizable revenue shortfall looming in the next two-year budget cycle, which would have to be addressed by the next Legislature.

Nass said the King administration appeared to be content to “mosey along and let’s hope things get better.”

Nass told Waldron: “You’re in denial.”

Waldron said the recently revised revenue estimates were subject to further review and asserted, “I think we’re on top of this as a state.”