Legislative Budget Update by Senator Bill Diamond for the Lakes Region Weekly, April 27, 2009
When the Appropriations and Financial Affairs Committee began our work on the $6.1 billion biennial state budget in January, we were well aware that this budget was more than $200 million less than the previous budget and that we had to close an exceptionally large gap. As a committee, we closely examined state spending, worked with the legislative committees, as well as each department and we tried to balance these cuts across state government.
Originally, we planned for the budget to be voted out of committee before the end of April, where it would then go to the House and Senate for debate and passage, if two thirds of the Legislature voted for it. But as the national economy worsened, so did Maine’s. This prompted the state’s revenue forecasting committee to update their report, and now they are predicting that the state budget deficit for the next two years will grow by more than $560 million.
The Consensus Economic Forecasting Commission updated their economic forecast in March, to say that the recession has hit Maine much harder than they projected in November. The increase in Maine’s unemployment rate (now at 8.1 percent) and continuous news of Maine businesses cutting jobs, brings this point home and hard.
Now, the Appropriations and Financial Affairs Committee needs to revisit every discussion we have had while dealing with the budget and put many things back on the table in an effort to find every possible savings. This will mean more cuts than we expected, but it does not mean new taxes. In this economy, Mainers cannot afford new taxes. We will have to make difficult decisions and look to further reductions in state government. This will mean cutting services and programs, more reductions to education and cutting jobs. Every community will be affected by this shortfall; every Maine citizens will feel its effects.
This information is coming to us at a time when we also need to address the fact that if we do not pass a budget by May 8th, Medicare funding will expire. This will leave roughly 7,000 providers (hospitals, nursing homes, individuals, etc) unpaid. $65 million of the stimulus funding that Maine will receive will go toward addressing this shortage. And the Governor has proposed that we use another $40 million in each of the next two years to deal with future needs.
This is no small task that the legislature faces. Our every decision will be result in some of the toughest cuts Maine has seen in a long time. The people of Maine must be prepared for what is to come and the challenges that lie ahead.
As always, I look forward to hearing your thoughts. Please don’t hesitate to contact my office at the State House, if you have any questions or comments, by calling 287-1515 or visit my website, http://www.mainesenate.org/diamond.
Senator Bill Diamond is a resident of Windham, and serves the communities of Casco, Frye Island, Raymond, Standish, Windham and Hollis as Senator of District 12.
Send questions/comments to the editors.
