State faces $570 million budget gap

AUGUSTA – Gov. John Baldacci’s administration said Monday state government faces a potential gap of $570 million between available resources and anticipated demands for the next two-year budget cycle that begins in mid-2007.

The structural gap analysis was released in response to a statutory deadline and projects a potential gap slightly larger than the one estimated in July by the Legislature’s Office of Fiscal and Program Review, which ranged from $525 million to $550 million for the 2008-2009 biennium.

Fiscal 2008, the first year of the next two-year state budget cycle, begins on July 1, 2007.

A looming $570 million difference between resources and demands contrasts with projected gaps of $964 million estimated in 2002 before Baldacci took office and $733 million two years ago.

The $570 million estimate for 2008-2009 amounts to 8.6 percent of an assumed appropriations base of about $6.6 billion, according to state budget director Ryan Low.

The 2004-2005 structural gap of close to $1 billion amounted to 16 percent of an assumed appropriations base of around $6 billion, he said.

“At the governor’s direction, we’ve worked hard to streamline services, reduce administration and improve accountability at all levels, but we recognize that more must be done,” Commissioner Rebecca Wyke of the state Department of Administrative and Financial Services said in a prepared statement.