AUGUSTA – The news is good and bad for Maine’s 154,000 veterans.

A proposal to close five of the seven Veterans Services offices in the state has been scrapped, but offices in Portland and Machias would close July 1, if the Legislature approves Gov. John Baldacci’s budget. The Machias office serves veterans in Washington and Hancock counties.

Two employees in Machias and one in Portland are slated to lose their jobs July 1.

The cuts are estimated to save about $417,000 over the next two years in the Department of Defense, Veterans and Emergency Management. About $4 million has been budgeted for the Bureau of Veterans Affairs to run the five remaining offices in Springvale, Lewiston, Waterville, Bangor and Caribou in the biennium.

Baldacci’s communications director, Lee Umphrey, said Friday the department would “maintain a presence in Portland and Machias but in rent-free offices. The plan is to maintain services at new locations.”

There would, however, be fewer staff members to maintain the services because they would have to travel to Machias and Portland from other offices.

The plan to close the two offices that serve veterans might reduce the projected $1 billion deficit, but it would cost the state millions in federal benefits, according to veterans advocates. The original plan to close five offices was estimated to save $1 million but cost the state $24 million in benefits.

The Portland and Machias offices are the only ones in the state that pay rent. In contrast, the Bangor office is located in the Maine Veterans Home near Bangor Mental Health Institute and the Caribou office is located in a National Guard armory.

If the latest proposal would save about 40 percent of that $1 million cited in the original plan, the rough cost in estimated lost benefits would be about $9.6 million instead of $24 million. But the veterans counselor in the Machias office said the work he and the office secretary do can’t be measured in dollars alone.

“Last year, our office had 183 claims approved that brought in $2.3 million that went directly into the pockets of vets or their dependents in Washington and Hancock counties,” said Aubrey “Skip” Carter. “The claims we file that bring money into the state account for just a small number of the people we serve. We file claims on a lot of other issues that don’t involve benefits that bring in dollars.”

He said that in addition to helping veterans apply for medical benefits, including prescription drugs, and education benefits, veterans counselors help widows and widowers get markers that distinguish grave sites as belonging to veterans. Carter said he also helps veterans and their dependents apply for federal and state benefits such as property tax exemptions.

“Everybody wants to focus on the money we bring in, but what we really do is help make their lives a little easier,” he said. “We help them when they don’t know where to turn. Normally, we have an answer, but when we don’t, we find out where to get the answer.”

Tentative plans call for veterans and their families in Hancock and Washington counties to be served by staff in the Bangor office. That would include picking up the eight days a month Carter spends in itinerant offices in Calais, Eastport, Lubec and Ellsworth. How that would happen has not yet been determined, according to Gloria Nadeau, the secretary in the Bangor veterans services office.

Carter doubted the Bangor office could maintain the same level of service that his office had. The Bangor office is the busiest in the state and processed 500 claims last year, according to Nadeau. It maintains itinerant offices seven days a month in Corinth, Dover-Foxcroft, Millinocket, Lincoln and Milo.

Roland Lapointe, director of Maine Veterans Services, said earlier last week that operating hours in Portland and Machias would have to be staffed on a limited basis.

“We can’t be five days a week in all circumstances if we have three folks less,” he said.

News about the proposed cuts has been trickling out to legislators. Rep. Edward Pellon, D-Machias, was not aware until Friday that the office in his district was slated to be closed.

Nadeau urged veterans across the state, especially those served by the Machias office, to write their legislators and urge them to oppose the plan.