State looks to trim $99M from budget

AUGUSTA – Top legislative budget writers have more than doubled the target for savings needed to keep the state General Fund in the black.

Appropriations Committee leaders are asking other committees to recommend ways to reduce spending by $99 million more than the cutbacks already put forth by Gov. John Baldacci in order to close a $95 million revenue gap.

Similar instructions went out Wednesday from Baldacci budget officials to the heads of state departments and agencies.

“We are facing an extraordinary fiscal challenge,” the Democratic chairmen of the Appropriations Committee, Sen. Margaret Rotundo of Lewiston and Rep. Jeremy Fischer of Presque Isle, wrote Tuesday evening to other legislative committee leaders.

“In early January, the governor put forth a supplemental budget bill that was designed to close a hole of $95 million. It has become increasingly clear that the budget hole is much larger than that, possibly as much as $99 million larger” for fiscal 2009, the chairmen wrote.

Rotundo and Fischer said budget problems have worsened by a weakening national economy, pending federal Medicaid rule changes that may eliminate matching federal dollars for services to children, the elderly and disabled, and a potential state revenue loss if a federal economic stimulus package speeds up business equipment depreciation.

Rotundo and Fischer said feedback from other committees would be requested by

midmonth.

“We know that committees are unlikely to find sufficient budget savings by cutting small amounts from each of many programs. After years of trying to perform the same functions with fewer resources, we expect that many departments cannot continue to do the same with less,” the chairmen wrote.

Committees are asked to set priorities and “make a recommendation as to which lower-priority programs or functions should be eliminated.”

Rotundo and Fischer added: “It will be difficult to make these recommendations, but if this growing budget hole is to be filled through spending reductions, the Appropriations Committee needs to know from the committees with expertise which reductions will do the least damage to the state and its citizens.”

The memo to department and agency heads from Baldacci finance chief Rebecca Wyke and budget chief Ellen Jane Schneiter sets a Feb. 11 deadline for responses.

“Proposals that rely on revenue raisers such as increased fees and fines may be offered as an alternative; however, your plan must show actual expenditure reductions that meet your respective target,” Wyke and Schneiter wrote.