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Schools, Social Services to Bear Brunt of Maine Budget Curtailments
12/27/2012   Reported By: A.J. Higgins

Gov. Paul LePage responded to declining state revenues today by signing an executive order for a budget curtailment of just under $35.5 million. Hardest hit among state targets was the Department of Health and Human Services, at just over $13 million, and a decrease in education funding for more than 200 state school units, of a little more than $12.5 million. Legislative leaders say they are ready to deal with the curtailment as part of a pending supplemental budget package from the governor. A.J. Higgins has more.

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Originally Aired: 12/27/2012 5:30 PM

With only six months left in the current budget cycle, Gov. LePage was forced to take the curtailment action to offset projected tax revenue losses. Sawin Millet, the governor's chief of finance, said LePage's executive order for the budget cuts laid out the cold, hard facts of Maine's struggling economy.

"It references not only the statutes and the rationale for doing this, but the constitutional requirement that we have a balanced budget, and without taking action as proposed in this order and the curtailment plan that is attached, we would not be in that position, given the forecast that was handed down on Dec. 1.," Millett said.

The curtailment plan now moves to the incoming new Legislature's Appropriations Committee that is being called into action early by Democratic majority leaders. One of the areas hit hard is the General Purpose Aid funding that assists more than 200 state school districts. Millett says the reduction to schools totals just over 12.5 million.

But some districts will lose more than others. Portland, for example, stands to lose $870,000 as the result of declining state revenues, and Bangor would lose $270,000 dollars. Still, Millett says the state will hold off on immediate monthly cutbacks to schools until the Legislature has had time to hold public hearings on the governor's supplemental budget package that is expected to be released by Jan. 11.

"We will not start reducing payments to those local units until the Legislature has weighed in on this proposed curtailment, so we're not looking at immediate impact on the monthly flow of money to the local school systems," Millett said. "It can either be done proportionately for the months remaining in the fiscal year once the Legislature endorses a plan, and that could be spread out over one, two, three or four months."

State health care services for low income, elderly and those dealing with mental health issues are receiving an even larger reduction under the governor's order. The Department of Health and Human Services will have to absorb just over $13 million in cuts -- much of which will be borne by agencies that contract with the state to provide health services. Democratic House Speaker Mark Eves says his staff is just beginning to get a grasp of how deep some of these programs cuts could be.

"Three areas really stand out for me in the HHS budget, and that's adoption assistance, foster care and the mental health cuts to contractual services," Eves said. "These services have been cut in the past and, really, we're wanting to know what the impact is going to be, and that's why we're bringing the Appropriations Committee in early."

"We have to be fiscally responsible, and what the governor has done is the fiscally responsible thing to do," said House Republican Leader Ken Fredette. "We can't spend more money than we take in."

Republican leaders like Fredette approved of LePage's curtailment and said the longer revenues are not aligned with spending, the deeper the cuts are likely to be in the upcoming supplemental budget. He expects the temporary cuts to be painful. Assistant Senate Republican Leader Roger Katz said that while the revenue picture is bad news for the state, things could be worse.

"The good news is that it sounds like most of these cuts won't actually have to get made until sometime during the spring, so it will give the Legislature a chance to hold public hearings to get public input and decide if this is exactly the right place to make these cuts," Katz said. "Again, it's going to be part of a larger supplemental budget."

Other areas that received significant reductions under the curtailment order included the state university system, at $2.5 million, and the state Department of Corrections, at $1.9 million.


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