Gov. Paul LePage issued a package of spending cuts Thursday that will put much of the burden for closing a $35.5 million budget gap on public schools and human services.
The curtailment order is designed to balance the state’s two-year budget, which faces a shortfall that was forecast in late November, as revenue fell behind projections. The reductions, anticipated for several weeks, represent across-the-board spending cuts among state agencies.
State law empowers the governor to curtail state spending to balance the budget. However, the law specifies that the cuts must be somewhat equitable among agencies. Additionally, the Legislature will have a chance to change the cuts, some of which don’t go into effect for several months.
That’s because LePage will include the curtailment reductions in a supplemental budget designed to bridge an additional shortfall in the current two-year budget. The LePage administration is expected to releaase the supplemental budget by Jan. 11.
Including the curtailment in the supplemental budget doubles as a challenge to the Democratic majority because it will have to propose different cuts if it doesn’t accept LePage’s proposal.
LePage, in a prepared statement, said the curtailment order was a temporary fix. He challenged lawmakers “to sustain a balanced budget for the long term,” adding that “Democrats and Republicans must acknowledge that from year to year we have only put a Band-Aid on the problem.”
“Not unlike Washington, we must rein in spending before Maine falls off its own fiscal cliff,” he said.
Democratic leaders said they had questions about the effects of the governor’s curtailment order. Senate President Justin Alfond, in a statement, said that Maine “couldn’t cut its way to prosperity.”
Included in the order is a $12.58 million reduction to aid to local school districts and a $13.4 million reduction at the Department of Health and Human Services. The two departments comprise roughly 80 percent of the state’s budget.
The Portland school district will see a reduction in state aid of more than $870,000, according to the Department of Education.
The education reductions varied by district. Districts with higher assessed property values will experience deeper cuts than those with lower values.
The DHHS curtailment order targets $1.5 million in funding to mental health and substance abuse providers, $1.4 million in child adoption services and $1.9 million in foster care services.
DHHS is also facing a projected $100 million shortfall in its MaineCare program. The overrun is the main impetus for the upcoming supplemental budget, which legislative leaders predict will be between $100 million and $150 million.
LePage’s curtailment order cuts $2.5 million from the University of Maine System, as well as $724,451 from the Maine Community College System.
The Department of Corrections will see a $1.9 million reduction.
The Department of Education noted that the state subsidy checks to school districts will not be reduced immediately. Sawin Millett, LePage’s budget officer, said that school districts will have five or six months to plan for the cuts before they kick in.
“None of these cuts are easy,” said Sen. Roger Katz, R-Augusta, “but most of these reductions won’t go into effect until spring. … The (Legislature’s budget-writing committee) will have a chance to weigh in and perhaps they’ll have different priorities.”
The curtailment includes leaving a host of state jobs unfilled. If the Legislature adopts those reductions in the supplemental budget, it may be difficult for Democrats to add them in the next two-year budget.
Rep. Peggy Rotundo, D-Lewiston, House chairwoman of the Appropriations Committee, said the unfilled positions represent a number of concerns for her caucus. She noted that there are several vacancies in the Department of Public Safety, including the Maine State Police.
“Those positions exist because there is work to be done,” said Rotundo, adding that lawmakers needed a fuller understanding of the potential effects of leaving the positions unfilled.
Rotundo also had concerns about reductions at DHHS, including the cuts in adoption support services and a $174,000 reduction in funding for the Office of Elder Services.
Rotundo said the Appropriations Committee will ask the administration about the effects when the panel meets next week, on Jan. 4.
The full Legislature doesn’t convene until Jan. 8.
The Maine Constitution gives the governor authority to make temporary across-the-board spending reductions to bring the state budget into balance. The cuts must be relatively equitable among state agencies, which means the order could not target one department to bridge the revenue gap.
The governor closed state offices Thursday because of the storm, but his staff was putting the finishing touches on the curtailment order Thursday morning. Millett, LePage’s chief budget officer, announced the order in an afternoon news media conference call.
“We are carefully reviewing the governor’s spending cuts,” House Speaker Mark Eves, D-North Berwick, said in a statement in response to the order. “We need to get to work early to ensure our budget is balanced in a fair and reasonable way.”
LePage also is expected to propose the state’s next two-year budget on Jan. 11.
Steve Mistler — 791-6345