A HEARTBURN BUDGET

Building a state budget, like most political action, is an exercise in compromise. Therefore, the budget passed Thursday night by the Appropriations Committee contains plenty of measures to dislike – cuts that go too deep and not enough state jobs eliminated, for example. The question for the Legislature as it considers the budget next week is whether these are compromises they can accept to patch a budget shortfall while also reducing state spending in the long term.

The budget, supported 8-3 by the committee with no Republicans voting for it, achieves many important goals. It addresses a nearly $200 million revenue gap without raising broad-based taxes and without dipping into the state’s rainy day fund, which could be needed if the economic downturn continues or worsens. It does this by cutting state spending going forward, which helps address the long-standing problem of state expenditures exceeding revenues.

Does it go far enough in reducing spending? Probably not, and lawmakers will again face difficult decisions about what programs to eliminate and which to shrink when they write the next biennial budget. This work will take on urgency as lawmakers confront expected cuts in Medicaid funding from the federal government.

Cuts to health and human services proposed by the governor were a major area of concern. The Appropriations Committee restored much of that funding, reducing cuts in areas such as foster care services, domestic violence prevention and response, and health care and prescription coverage for poor single adults. It covered these expenses largely by adjusting a tax on hospital revenue and more quickly selling unclaimed stock market holdings.

The committee also reduced the governor’s proposed cut to higher education funding, devoting an additional $5 million to the University of Maine System and Maine Community College System. Efforts to tie the funding to increased efficiency failed.

Because it is unlikely that two-thirds of the Legislature will support the Appropriations Committee document, lawmakers have only until April 1 to complete a budget and pass it with a majority vote. If they don’t, Gov. John Baldacci has said he will issue a second curtailment order to balance the budget for the remainder of this fiscal year, which ends June 30. Such an order can only reduce spending, but not change the internal mechanics of programs, making it a much cruder way to close the budget gap than through legislative negotiations.

In addition, if lawmakers miss the April 1 date, two-thirds support is necessary to pass a budget, which would likely mean bigger cuts to social services to get Republicans to support it.

House Majority Leader Hannah Pingree termed the budget “middle ground,” which means “some people feel heartburn about the cuts; others want more cuts.” What is important, however, is that the budget gap was closed without tax increases, dipping into the rainy day fund or resorting to gimmicks, she said.

With plenty of antacids on hand, lawmakers must do the difficult work of passing a budget next week.