Governor orders $27M in spending cuts; lawmakers surprised

AUGUSTA – Gov. John Baldacci surprised legislative leaders and members of the Legislature’s budget panel Monday evening when he ordered $27 million in spending cuts be developed by his administration before April 1.

“We are preparing to further slow spending until the Legislature acts to bring the state’s budget into balance,” Baldacci said in a statement released at about 6:30 p.m. “We’re taking prudent action to make sure that state spending does not exceed revenues while we diligently work toward a bipartisan budget.”

The statement indicated the $27 million would have to come out of what is currently budgeted for the last quarter of the fiscal year, which runs from April 1 to June 30.

The governor informed only some members of legislative leadership of his decision before releasing the statement. Lawmakers who themselves have been working on various proposals to balance the budget by April 1, appeared to be caught off guard by the governor’s action.

Senate President Beth Edmonds, D-Freeport, and House Speaker Glenn Cummings, D-Portland, stressed in an interview Monday night that while they were informed of the decision in a meeting with the governor late that afternoon, they were not consulted.

“He did give us some warning, [but it] was not a consultative warning,” Cummings said. “It was clear he was going to move forward regardless. We felt at that point he had made up his mind so we didn’t try to make it a debate.”

A governor’s curtailment order has the effect of law and can only be superseded by the Legislature passing a new budget.

Edmunds said she does not believe the governor’s curtailment order will be needed because lawmakers plan to pass legislation to balance the budget, not only for this year, but also the second year of the two year budget.

“We’re going to tell our people what we have been telling them – that we are on target to get this done by April 1 and we are going to get it done by April 1,” she said. “I think all of our caucuses have been working in good faith. In my mind this is unnecessary.”

Some other Democratic leaders did not know about the governor’s statement until after it was released. Senate GOP Leader Carol Weston, R-Montville, said the governor called her and informed her that the curtailment order was being prepared.

“I wasn’t given any details at all,” she said. “I asked for some, but he said there weren’t any, only that Becky [Wyke the Finance Commissioner] was working on it.”

Weston said she shared the concerns of Cummings and Edmunds that another list of spending curtailments could cause confusion as lawmakers are working toward a bipartisan budget.

Wyke, in an interview Monday night, acknowledged the action could cause confusion, but she said there is already considerable confusion caused by the economic downturn and the series of budget changes proposed and made.”We had the work of the committee over the summer and fall to find $10 million in cuts and then we had the first curtailment order [in December] and then the supplemental budget and then the change package,” she said. “It’s part of the price we are paying for the decrease in revenues and the need to balance the budget.”

She agreed that lawmakers are working hard to reach a bipartisan budget package, but said it takes considerable time and effort to develop a curtailment order.

“We felt we had to start that process now so we have it ready April 1st if we need it,” Wyke said.

No details of the proposed curtailment are available, Wyke said, because they are just being developed. She is preparing a formal letter to legislative leaders, as required by law, informing them that the curtailment order is being prepared.

Last month the Revenue Forecasting Committee revised the state’s projected revenues down by $95 million. Combined with a similar forecast in December, anticipated state revenues have been reduced a total of $190 million this budget year.

Wyke said she would use basically the same guidelines in drawing up the new curtailment order as she did in drafting the December order. She said she plans to follow a number of guidelines, including how proposed cuts might affect public health and safety, how the impact of cuts can be minimized, and whether the proposal, insofar as is practical, follows the intent of the Legislature.