March 29, 2024
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Budget woes eclipse governors’ transition

AUGUSTA – State budget problems, which have preoccupied Maine governmental leaders for months, are still dogging outgoing Gov. Angus King and already demanding attention from Gov.-elect John Baldacci.

According to top King aide Kay Rand, the King administration is nearing completion of a plan to be passed along to the Baldacci team that could offset the remaining revenue shortfall for the current fiscal year, which runs through June 30.

“We will have it drafted, ready for their use as they see fit,” Rand said this week.

Eyeing a $44 million fiscal 2003 hole, King administration officials believe about half can be filled by executive actions that are likely to be outlined soon in the latest in a series of curtailment orders.

Covering the rest of the shortfall would require legislative action under the still developing King plan.

Elements could include the use of $7 million from the state Highway Fund and about $9 million from other special revenue funds, Rand said.

It was unclear whether the options to be passed along to Baldacci would call for actual cuts.

Maine lawmakers, at King’s urging, enacted a $229 million budget-reduction measure on Nov. 14 in a post-election special session of the Legislature.

But a week later, on Nov. 21, state forecasters dropped their revenue projections for the current fiscal year again, opening a new hole in the freshly patched state budget.

As troubling as that was for budget balancers, it is relatively small potatoes now.

A legislative analysis pegs the so-called structural gap for the new two-year budget cycle that will begin on July 1, 2003, at around $1 billion.

The structural gap is the difference between anticipated revenue and potential spending demands. Baldacci, who has said he believes the looming gap can be bridged without higher taxes, is expected to present a two-year budget proposal in February.

Departmental officials have been putting together assessments of what impact flat funding would have on their agencies.

“He’s committed to trying to balance it without a tax increase, and we want to help him if we can,” Rand said.

Baldacci, a Democrat who is winding up a fourth two-year term in the U.S. House of Representatives, takes the reins from King, an independent concluding his second four-year term as governor on Jan. 8.

Correction: This is the longest version that ran.

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