AUGUSTA — Gov. Paul LePage has decided to move forward with spending reductions to balance the budget after a projected $35.5 million drop in tax revenues.
LePage said in a written announcement Thursday that he has not yet decided what spending will be cut, but is working with members of his Cabinet to put together a detailed curtailment order.
The order is likely to be issued next week.
“I will be exercising my authority to reduce spending in the quickest manner possible. My commissioners and I are evaluating our options and we will put in place a plan that is practicable and follows the law,” LePage said.
The governor’s staff had already said LePage was likely to issue a curtailment order and his top budget officer formally requested the move earlier this week.
State revenues have been falling short of expectations during the current fiscal year, which began in July. The state’s budget forecasting committee blamed the shortfall on continuing weakness in the economy, as well as consumer uncertainty about whether Congress can avoid a combination of automatic tax increases and spending cuts known as “the fiscal cliff.”
Curtailment is an immediate response to a revenue shortfall and does not need to be approved by the Legislature. The Legislature can modify the cuts when they convene in January, however. Lawmakers already are scheduled to take up budget changes – a supplemental budget – because of an estimated $100 million shortfall in the Department of Health and Human Services.