AUGUSTA – With the national economy in distress, Gov. John Baldacci on Friday began setting the stage for massive state spending cuts when the Legislature prepares the next state budget, and ordered immediate 10 percent cuts in his own office.
Baldacci also directed the Department of Administrative and Financial Services to begin preliminary work on a potential state spending curtailment, and to further tighten controls on state travel and hiring.
“We are laying the groundwork now to ensure that Maine’s budget remains balanced,” Baldacci said. “The choices we will face this year and for the next two-year budget will be extremely difficult. By moving today, before the crisis arrives in full, we will be in a better position later to deal with the worsening national economy.”
Curtailment orders are temporary and serve to reduce the rate of spending until the state budget can be rewritten to reflect expected revenue shortfalls.
In September, Baldacci directed all state agencies and departments to make contingency plans for a possible 10 percent reduction in their budgets for fiscal 2010-11, which will take effect July 1, 2009. The Legislature to be elected next month will have to deliberate and pass a state budget after the 2009 session gets under way.
“These cuts will touch families and businesses throughout Maine,” the governor said in a statement. “As Mainers are forced to deal with a terrible national economy, it’s important for government to show that it is willing to do the same thing.”
Maine’s increasingly gloomy revenue picture prompted Baldacci to take Friday’s steps. State revenues for July and August remained relatively consistent – down about $6 million – the governor said. But the stalled national economy will no doubt affect New England states and others across the country. It has become a dominant issue in states where there are gubernatorial races.
A curtailment wouldn’t be Baldacci’s first.
Citing a slowing national economy, a beleaguered housing market and tightening credit, the governor last December issued a $38 million curtailment order, with the bulk of the cuts applying to human services and education programs.
With a second curtailment order prepared but unissued, the Legislature in April enacted a state budget rewrite that offset a $190 million shortfall in the $6.3 billion two-year budget. That was accomplished through a range of cuts with no new broad-based taxes.
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