Like the doctor in a classic joke, Gov. Baldacci has some good news and some bad news.

For once, state revenue projections are improving, meaning that between tax receipts and federal funds, the Legislature will have nearly $80 million more to work with.

But while that  might sound like a lot of money, compared to a $360 million shortfall, it barely makes a dent.

Over the last two years, lawmakers have faced the tough challenge of cutting spending to balance the budget while keeping essential services in place. How they handle the latest good news could be the toughest challenge yet.

Every dollar of state spending that is cut hurts somebody. Many constituent groups, from sportsmen to state workers, are represented in Augusta and make the case for why their programs deserve to be saved. But it has been clear from the public debate since the governor’s first proposed cuts were announced that the stakes are much higher for some receivers of state services than others.

BROAD-BRUSH CUTS

In the latest budget revision, the Baldacci administration has rightly put the focus on easing the pain caused by cuts to the Health and Human Services budget. Legislators should dig down and determine if these cuts to the most vulnerable populations, including the elderly, disabled and people with mental illness, still go too far.

Across-the-board cuts are sometimes the best tool for a budget writer trying to be fair, but they can also be unjust. Some nursing homes would have shut their doors if they lost that level of state funding. People with serious medical disorders would have had to go without regular therapy sessions or drastically reduce the number of blood tests they need to stay on the medications that manage their illnesses. The results could end up being more expensive for the state if they were institutionalized or put in jail, but also personally devastating for the consumers and their families.

Whether DHHS and the system of nonprofit providers are the best way to serve these populations is,  unfortunately, a question for  another day. The experience of the last two years suggests that the state revenues do not support the current system, but a strategy to cut without abandoning society’s commitment to its most vulnerable members has been elusive. Keeping faith with those people should be the top priority for lawmakers as they make the final adjustments to the state budget.

Education is the next priority, and since every member of the Legislature represents at least one school district, the pressure is on for them to soften the blow of the initial cuts. Those cuts should be kept in perspective.
Investment in education is crucial to the state’s future and it wouldn’t pay in the long run to be overly thrifty now. But restoring cuts to state aid is not the only way to help schools.

OTHER REVENUE

The Legislature will soon be presented with a plan to change some state laws that would make Maine eligible for federal grants through the Race to the Top program. The item likely to be the most controversial will be a provision that will link student performance to teacher and principal evaluations. Voting for this bill is a crucial test for any lawmaker who claims to be serious about school funding.

In the absence of more state aid,  it’s  up to school districts to make the best use of the resources they have. Communities have the ability to raise taxes if they think their schools are underfunded. They can also cut staff to weather out this storm. While that would be a loss for students and the people who lose their jobs, it does not compare with the impact on lives that would come from too-deep cuts to human services.

The governor’s next priority is to undo take-backs imposed on state employees. Baldacci has proposed reducing the number of furlough days and restoring longevity raises that were cut in the previous budget proposal.

This priority is misplaced. Workers throughout the economy are facing pay cuts and wage freezes as a result of this recession and most are happy that they still have jobs. Unemployment hovers around 10 percent, and those out of work face stiff competition when they look for work.

If state workers were employed by a business that was losing more than $300 million, they would not be expecting raises. While the impacts of this recession are still affecting Maine’s economy, restoring wages to still-employed state workers should not rise to the top of the list when it comes to spending new money.

Lawmakers will have to resist a lot of pressure in the weeks ahead, and may find that adding to the budget is just as hard as cutting it.

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