AFTER THE BUDGET

By passing a budget with a mix of cuts and cost savings, and without substantial tax increases or withdrawals from the state’s Rainy Day fund, lawmakers filled a $190 million gap between state revenues and spending. Eliminating that gap must remain a top priority.

Maine has a long history of spending more than it collects in revenue, leaving lawmakers to find ways to plug so-called structural gaps. This is especially true when the national economy slows, which is currently the case.

This year, lawmakers were faced with a $190 million shortfall in the state’s two-year $6.3 billion budget. They made up the shortfall by cutting government services, especially for the mentally ill, reducing government expenditures and raising a handful of fees.

Although they agreed on the majority of the budget changes, Democrats and Republicans parted ways on health care cuts and reductions in state government employment and spending. Republicans also opposed reductions in staffing and funding for the Office of Program Evaluation and Government Accountability, a nonpartisan group that looks for government waste and inefficiency.

Lacking two-thirds support for a budget plan, which would have allowed it to take effect immediately, Democrats were forced to pass a majority budget by March 31, so it could go into effect by July 1, the start of the next fiscal year.

With the budget debate largely behind them but more bad economic news expected on the horizon, lawmakers must continue to look for ways to cut state spending.

This budget helps lay the groundwork with at least $130 million in permanent spending reductions. Lawmakers were able to pare back deep social service cuts proposed by Gov. John Baldacci and to retain services the federal government will no longer pay for by re-examining and reducing spending by state agencies. These include small savings from better coordinating the use of state aircraft by multiple state agencies, reducing state employee travel and eliminating duplicative equipment.

Larger savings come from reducing utilization of the state employee health plan, eliminating some positions and not filling vacant ones, and delaying when the state provides 55 percent of kindergarten through 12th grade school funding.

If such cost savings can be quickly found during a time of fiscal urgency, many more could be found with a thorough review of all state spending. Further, prioritizing that spending within and between state agencies is long overdue.

Retaining OPEGA – and maintaining its independent, nonpartisan status – and following its recommendations offers one avenue for this work. The broadly supported Prosperity Task Force is another as is continuation of work begun this summer by the Appropriations Committee to look for ways to reduce state spending.

This supplemental budget allows Maine to balance its books, but it also highlights the work that remains to be done.