Governor Baldacci Sets Administration Priorities for Budget Restorations

Press Release

Governor John E. Baldacci today released his priorities for an anticipated increase in federal support to the State.

This week, the U.S. Senate passed legislation that will extend for six months enhanced Medicaid match rates originally included in the Recovery Act. The U.S. House of Representatives is expected to take action soon. The extension will result in more than $86 million for Maine that can be used to restore State services threatened by declining revenues.

"The federal support will help Maine's economy recover from the worst recession since the Great Depression. These resources offer a bridge to better days," Governor Baldacci said. "But it does not relieve us of our obligation to make structural changes at all levels of government, to reduce costs and to be more efficient."

Governor Baldacci emphasized that the federal support is one-time money and that it remains critical that Maine continue to restructure the way it delivers services at all levels.

"While our first priority is balancing the current two-year budget, we must keep an eye out for the future," Governor Baldacci said. "We must continue to make the changes that will leave our State in the best position for economic recovery and growth while also protecting the most vulnerable."

In addition to the $86 million in increased federal support, the Governor has identified $10.8 million in other savings that should be placed in the State's Budget Stabilization Fund to begin restoring reserves. The amount is a combination of personal service and accounting savings and $3.6 million in current budget language.

"The changes I'm proposing today clean up the current two-year budget, and also make it possible for us to improve Maine's ongoing financial circumstances," Governor Baldacci said. "The new savings identified in this proposal begin the process of rebuilding Maine's reserves. We can't afford to miss this opportunity to protect the State's financial standing and prepare for the future."

The Governor proposes to:

Fill the $35 million placeholder proposed in the current budget for increased federal Medicaid support;

Restore $33.6 million in proposed reductions in health and human services, including proposed cuts to the Drugs for the Elderly program, hospitals, nursing homes, service providers and crisis services;

Restore $5.6 million to a proposed reduction in the Circuit Breaker Program, which benefits 13,000 low- and middle-income homeowners;

Restore $5 million to municipal revenue sharing in fiscal year 2011;

Restore $5 million to General Purpose Aid to Education;

Restore $1.1 million for schools who voted to support the State's education reform law but whose partner districts rejected administrative consolidation;

Restore $580,000 for adult education;

Provide $470,000 in debt service for the University of Maine System to bring facilities at the University of Maine into ADA compliance and remove asbestos and mercury contamination;

Provide $200,000 for the Maine Uncontrolled Hazardous Sites Cleanup; Restore $80,000 to the Maine Judiciary.

Restorations in GPA and the Municipal Revenue Sharing are intended to blunt the impacts of declining revenues on local governments and schools, the Governor said.

"I have set my priorities after consultation with Democrats and Republican leaders," Governor Baldacci said. "It is my intention that this plan offer a roadmap to balance the State budget, restore important services and continue our efforts to make government more effective and efficient. I am committed to a bipartisan budget and believe that we can get there if we continue to work together in a spirit of openness and cooperation. Maine people want solutions, not political wrangling."

Commissioner Ryan Low of the Department of Administrative and Financial Services presented the details of the proposal to the Appropriations and Financial Affairs Committee of the Legislature today.

The current proposed changes to the two-year budget close a gap of about $310 million created by declining State revenues.

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