BUDGET BALANCING ACT

As lawmakers begin a new session in Augusta this week, the state’s growing budget shortfall will demand much of their time and attention. Gov. John Baldacci, through an executive order last month, has already outlined much of his blueprint for cost cutting with more to come when he unveils his supplemental budget next week. His, and other proposals, will be the target of criticism. For such complaints to be useful, however, they must be accompanied by alternatives.

Immediately after Gov. Baldacci announced $38 million in spending cuts, which will remain in effect until lawmakers pass a supplemental budget, there was talk of other ways to bridge the budget shortfall. Raising the state’s sales tax by a penny, for example, would raise about $150 million a year. But, at a time when the state can’t even study the possibility of using tolls to raise money to pay for roads, tax increases don’t have much support. Further, Maine, with among the highest tax burdens around, has little room to maneuver toward higher taxes.

There is more than $150 million in the state’s rainy day fund. While this looks like a large pot of money that could minimize cuts to programs and services, neither this money or a sales tax increase answers the long-term problem of state expenditures exceeding revenues.

So, with the governor’s and many legislators strong distaste for raising taxes, lawmakers will focus their attention to cutting programs and services to save money. Here, too, they will face difficult decisions, especially since most of the state budget goes toward education and human services, with state aid to schools set at 55 percent by LD 1. This law was meant to lower property taxes. That has not happened in all locales while the requirement to meet the 55 percent funding level is a large reason for the current state budget shortfall.

Yet, although approved by lawmakers last year, the state’s school consolidation plan has remained controversial. Bills to change the law range from removing financial barriers to slowing the process down to repealing the law entirely. Any proposal that would delay or eliminate cost savings must identify an alternate source for the $36 million in savings that are already included in the state budget.

Likewise with the governor’s jail consolidation plan, which needs more detailed analysis, but should not be scrapped entirely. If lawmakers don’t like this approach, what alternative do they suggest?

Ditto with the governor’s expected suggestion to merge the state’s natural resource agencies – Inland Fisheries and Wildlife, Conservation, Marine Resources, Agriculture and Environmental Protection. Although he has yet to officially announce such a plan, or more important reveal any of its details, it is being roundly criticized as not saving enough money while disenfranchising hunters, fishermen, farmers and others.

With a $95 million gap between revenues and state spending in the current two-year budget, lawmakers must find real ways to cut expenditures in the long term. The governor’s order and its $38 million in cuts is one option. Lawmakers may decide there are better alternatives, but the end result must be long-term fiscal stability without gutting essential state services.