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Maine Finance Chief Recommends Budget Curtailment to Close $35.5 M Gap
12/03/2012   Reported By: A.J. Higgins

The process for initiating a possible $35.5 million dollar state budget curtailment officially got underway today, after the LePage administration's chief finance officer formally notified the governor of the need to immediately address the revenue shortfall. Gov. Paul LePage will be reviewing his options this week, and could issue an exectuive order to begin the process of reducing state spending to keep the budget balanced. Democratic leaders say they want the governor to consider all budget options. But Republicans are recommending curtailment as the best solution. A,J. Higgins has more.

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Millett and Bennett

Maine Finance Chief Sawin Millett (left) with Gov. Paul LePage's spokeswoman Adrienne Bennett.

It's hard to predict how the governor's possible curtailment order will take shape. But it's clear to Sawin Millett, the governor's chief finance officer, that immediate action is needed to deal with a $35.5 million budget gap that state revenue forecasters predict will open up over the next seven months.

"My recommendation is, in writing to the governor, that I feel steps need to be taken soon to assure that we not get further and further into the fiscal year and find ourselves in the difficult position of not having as much latitude or opportunity to lower and slow down spending," Millett said today at an Augusta news conference.

Often regarded as a blunt instrument for achieving budget goals, a curtailment by executive order affects numerous General Fund allocations. The guiding goal governing the process, Millett says, is fairness. Under a curtailment, he says, the administration can't cherry pick areas it perceives as ripe for reduction.

"The law does require that the curtailment not only be temporary, but be equitable, and that it not terminate any programs; and that further, it must, if done, show the effect of any curtailment upon each and every cost center and allotment that is curtailed," he says. "The purpose of those latter two is to make sure that we are staying consistent with the intent of the Legislature, and the budgeted program spending levels and what underlies those programs by statute, and so on."

In a statement, LePage says that Maine is facing its own fiscal cliff as it prepares to balance its budget. The governor also says he's beginning to assess his options. But his communications director, Adrienne Bennett, said the administration would not speculate on what areas might be cut.

"It would be premature at this point to talk about any of the so-called low-lying fruit or options on the table before we talk with everyone that is involved with this process," Bennett said.

Among those involved are the Democratic and Republican leaders of the Legislature. Senate Majority Leader Seth Goodall of Richmond said Democrats have not met with the governor since last month's elections returned his party to power in the House and Senate.

He says such a meeting is scheduled for Tuesday and that Democrats are anxious to share their views with the LePage administration on what shape a possible curtailment order might take.

"I think the important thing is to make sure that we start working together now," Goodall says. "Because even though there's not a budget bill in front of us there's many things that we can do, whether it be working closely with the governor, or working with legislative leadership on both sides of ther aisle to solve these problems. It's a big challenge when we have a supplemental budget that we know is coming -- the curtailment order is allowed under law, but most importantly is that if we get working togerther, all get around a table, we can solve these problems."

Republican House Minority Leader Ken Fredette says Republicans favor quick action by the governor in order to save as much state funds as possible under a curtailment order.

"And so to the extent that it is a revenue related problem, we would support curtailment at this time because, quite frankly, we're really coming up on half of the fiscal year having expired, that we're going to have only six months within wich to solve the much larger problem, which will be the supplemental budget," Fredette says.

If the governor issues the curtailment order this week, he will immediately issue a notice detailing how the budget reductions will be implemented.

Photo by A.J. Higgins.

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