New budget cycle could mirror past Analysts estimate more structural gaps for state in 2006-07 fiscal year

AUGUSTA – Working piecemeal to adjust state spending plans already in place, Maine lawmakers may well face more of the same for the foreseeable future.

Legislative analysts, without substantive quibbling from the Baldacci administration, issued a report Thursday estimating a potential gap between spending demands and expectable revenue for the next biennium of $934 million.

A structural gap of that magnitude for fiscal years 2006-2007 would be only slightly less than the gap lawmakers faced for the current biennium when they got down to work a year ago.

The struggle to bridge last year’s gap and make the patches made so far stick is continuing. Already, however, concerns over another looming finance cloud are on the rise.

Last March, lawmakers overwhelmingly approved a $5.3 billion budget package that set in place a blueprint for financing state government operations through June 2005.

The two-year spending plan avoided broad-based tax increases and relied on three roughly equivalent tactics – increased revenues from various sources, cuts in human services and reductions in other programs.

His early months in office were heady ones for Democratic Gov. John Baldacci. In fact, among other notable accomplishments, before April was over, Baldacci won bipartisan backing for budget legislation three times.

Most recently, though, victory has become harder to come by.

Just last month, over fierce Republican opposition, Baldacci and his Democratic legislative allies enacted their preferred plan for offsetting a $109 million Medicaid shortfall through June.

Still to come is a proposal by Baldacci and subsequent legislative deliberations over a similar package of remedies for fiscal 2005, which begins on July 1.

The Legislature’s Appropriations Committee, which heard details of the newly projected structural gap on Thursday, now is expecting to hear at least some details from Baldacci administration officials next week on the size of the 2005 shortfall that lawmakers will be asked to fill.

State officials, according to the Baldacci administration’s latest revenue report, are assuming that “Maine’s economy will initially lag the national expansion but should follow the national trend starting later in the year.”