Budget requests face uphill battle Baldacci stresses heating oil funds

AUGUSTA – State departments and agencies have submitted supplemental spending requests in excess of $58 million, with more expected in the weeks ahead. But Gov. John Baldacci says most of those requests will be turned down for inclusion in his budget request to the Legislature.

“I have made it clear to everybody that if they come forward with supplemental requests, they have to come forward with a way to pay for it,” Baldacci said Friday. “My focus is on heating oil for low income seniors and to make sure no one freezes to death this winter.”

In addition to a $5 million appropriation for assistance through the Low Income Heating and Energy Assistance Program, or LIHEAP, the governor said he will propose covering the cost of the Medicare “clawback” demanded by the feds as part of the implementation of the new Medicare prescription drug benefit. That item will cost between $9 million and $10 million, he said.

“We will find savings to pay for those,” he said.

State budget law requires agencies to submit their requests by Oct. 14 to the State Budget Office, but many miss that deadline and some need additional time to assess their requests, said State Budget Officer Ryan Low.

“This is really a work in progress,” he said. “For example, we are still working with the Department of Education and they have not submitted a request yet.”

And there is the likelihood of further federal cuts. Congress has not completed work on the spending bills for several programs that some state agencies depend on for part of their budget. When the final federal spending priorities are set, that could have an impact on the final supplemental budget recommendations the governor makes to lawmakers in January.

The supplemental budget will cover the remainder of this budget year, which ends June 30, 2006, and the budget for the year ending June 30, 2007. So far, agencies have indicated they need at least an additional $22.5 million to get through this budget year and more than $36 million in the second budget year.

“This is a process we go through every year,” Finance Commissioner Becky Wyke said Friday. “We will be meeting with the departments one by one to go over their requests.”

Wyke said the state has about $6 million in surplus from last year and she is waiting for the Revenue Forecasting Commission to meet next month to see if it reprojects revenues. After the first three months of this budget year, the state has about $22 million of unobligated revenues in excess of estimates.

“We always have far more needs than money,” said Rep. Joe Brannigan, D-Portland. “This budget will be no different. Everything has to be on the table, everything.”

Brannigan, co-chairman of the budget-writing Appropriations Committee, said he is very concerned about the impact of further federal cuts. He said he does not want any further cuts for programs that help the “poor and handicapped.”

Sen. Richard Nass, R-Acton, a member of the Appropriations Committee, agreed with Baldacci that agencies need to look to cutting programs with a lower priority to fund absolute needs like increased energy costs.

“I would hope the people coming forward will be prepared to tell us what they are not going to do in their existing budget to make up for their requests,” he said. “I suspect we will have to make cuts [in] other places in state government to make up for these additional needs.”

The biggest requests are from the Department of Health and Human Services. So far the agency has requested about $16.5 million to get through the current budget year and about $13.7 million for the second year of the two-year budget.

Low said DHHS is working to come up with a plan to self-fund the requests, but has not submitted all of the plans to the budget office.

“And that is always a concern,” Brannigan said. “What is cut to make up what is needed somewhere else in the department can be as controversial as the original shortfall.”

Many agencies have requests for funds to pay for the reclassification of certain jobs. While the individual amounts are usually only a few thousand dollars, they will add up to a significant sum.

Some requests are to make up for lost federal funds, like the $1 million to continue the Maine Drug Enforcement Agency in the Department of Public Safety’s budget request. The Department of Corrections is requesting $1.1 million this year and $3.4 million in the next year for several items, including higher energy costs.

The University of Maine System is seeking $5 million to help offset higher energy costs. The community colleges have identified about $280,000 as needed to pay additional energy bills this year, but they are not seeking state funds.

“We are not anticipating the state will be in a position to provide additional resources, so we will have to absorb those costs,” Community College System President John Fitzsimmons said. “If something changes, and there are funds available, we could use the help like all the agencies hit with higher energy costs.”

Baldacci said he expects all agencies will have to “re-prioritize” their spending to pick up the additional energy costs. He said state government has been taking several steps to lower energy bills for more than a year, long before the current spike in prices.

The governor said he will not be making his final budget decisions until January. Brannigan said he expects hearings will be held on that budget in February.