$6.4 billion budget deal all but done

AUGUSTA – Leaving the door open to one last round of negotiated spending, legislative bargainers put finishing touches Friday on a two-year budget package worth close to $6.4 billion that includes a mandatory school system consolidation plan and does without a major tobacco tax increase originally proposed by Gov. John Baldacci.

“We’re going to lose a few of ours and we’re going to lose a few of theirs” when majority Democrats and minority Republicans on the Appropriations Committee send their final product upstairs for consideration by the full Senate and House of Representatives, said Democratic Rep. Jeremy Fischer of Presque Isle, the Appropriations Committee’s House chairman.

But with House and Senate leaders on board and the committee itself strongly united, prospects for passage seem to be positive.

A wild card, however, is the reception for the school system consolidation component, which seeks to address widespread demands led by Baldacci for a cost-saving reining-in of Maine’s far-flung network of local school units while also accommodating legislative and local concerns about top-down regulation.

Baldacci’s original proposal was to establish 26 regional education units, a significant reduction from Maine’s current 152 school administrative systems.

The revised plan prepared for inclusion in the budget envisions 80 units, based on desired student populations of about 2,500. Exceptions would be available, but sanctions could face noncomplying communities. The budget package counts $36.5 million in savings.

Service cuts, funding transfers and numerous other budgetary initiatives are designed to balance the overall package while dispensing with the governor’s proposal for $136 million in new tobacco levies.

To show the depth of spending cutbacks already put forth, Baldacci administration officials this week outlined $130 million to $140 million in savings that had been proposed within the state Department of Health and Human Services.

Still up for debate, participants said Friday, were additional spending initiatives including more funding for higher education. That issue could simmer over the weekend. A final review of new budget language by the Appropriations panel is not expected before Tuesday.

Last Monday, University of Maine System trustees tentatively raised tuition by an average of 12.6 percent while appealing to the Legislature for additional state funding to help soften the blow.

The board authorized Chancellor Terrence MacTaggart to recalculate and lower the tuition hike in the event that lawmakers approve a university appropriation that exceeds the $5 million increase contained in Baldacci’s proposed budget.

Tuition at the seven-campus system has gone up each year since 1996 and now averages $6,450 a year for undergraduates. Last year’s increase averaged 8.7 percent systemwide.

MacTaggart said adding $6 million to the governor’s recommended $5 million increase would lower the tuition hike to 7 percent.

Republican insistence that new taxes be avoided appeared to have been rewarded in the all-but-final package.

Rep. Sawin Millett, R-Waterford, the ranking House Republican on the Appropriations Committee, said the budget total would be about $100 million less than Baldacci requested.

“This budget still takes care of those Mainers who are most in need, but we engaged in a process of setting spending priorities, which is not typical,” Millett said in a statement.

“Even though we are in the minority, we were able to exert influence on priorities. And some of the structural changes we are making in education and MaineCare are critical, so that future budgets will not be driven by unsustainable cost pressures,” Millett said.

Democratic Sen. John Martin of Eagle Lake said he saw no real winners and losers among various legislative factions.

“I’d say no one got anything. It’s bare-bones,” he said.

A late amendment was prepared Friday to reflect a $26 million contract settlement with the largest state employees union. The cost was said to be the equivalent of 2 percent increases in each year of the biennium.