AUGUSTA – Gov. John Baldacci announced about $10 million in state spending cuts during a press conference on Friday.
The cuts, mostly made in the Department of Health and Human Services, will not result in any layoffs and will not include education spending.
“The actions I am taking today are responsible and prudent,” Baldacci said. “They will constrain spending and give the next governor and the next Legislature more options as they work to develop a supplemental budget and the next two-year budget.”
The governor said he was forced to make cuts based on economic uncertainty combined with the fact that earlier this year, Congress passed a smaller state aid package than expected.
Baldacci used his power of curtailment, which allows him to temporarily curb spending in some areas without legislative approval.
The governor said he did not make cuts to education because the school year has already begun and local districts are already preparing to cope with the loss of millions of dollars in federal stimulus money for next year.
State agencies and departments have been preparing for a possible spending curtailment since July, Baldacci said.
About $5.6 million in reduced spending comes from DHHS, but commissioner Brenda Harvey said they would have minimal impact on people currently receiving services.
“Most of these reductions are not service cuts at this point,” she said. “What we have done is tried to absorb in programs funding that we otherwise would have used to expand or increase the program, because as you all know, we have significant demand on services.”
Harvey said the wait lists for services of nearly all the department’s programs have grown due to the down economy.
Other cuts include about $1.4 million in the state treasurer’s office, by adjusting the funding for debt service to match current expectations and about $1.2 million by spending freezes through the Department of Administrative and Financial Services.
Although Maine revenues exceeded projections by about $70 million in the last fiscal year that ended on June 30, the majority of those funds were required by law to go into the state’s rainy day fund.
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