March 11, 2010

New funds for Maine
will shrink budget gap

Gov. Baldacci will revise his budget again, possibly softening planned cuts, as the revenue picture brightens.

By Susan M. Cover
State House Bureau

AUGUSTA — The Baldacci administration is again working on revisions to the state budget after learning Maine will receive millions of dollars in additional federal Medicaid funds.

Gov. John Baldacci had accounted for $35 million in his supplemental budget in anticipation of the Medicaid money. He learned late Tuesday that the state will receive $46 million more than expected, said Ryan Low, commissioner of the Department of Administrative and Financial Services. The money is in a jobs bill approved Wednesday by the U.S. Senate.

"The governor is looking to make recommendations in the next 24 hours," Low told legislators on the Health and Human Services Committee.

If the entire $46 million is applied to the current two-year budget, which runs through June 2011, it would lower the shortfall to $314 million. Low said the governor will recommend that some of the money be used to reduce cuts in human services, but some could also be applied elsewhere.

The state budget shortfall has been a moving target for the past few months. It totaled $438 million in December, when Baldacci introduced a supplemental budget to address it. The shortfall dropped to $360 million last week after revenue figures were revised and the state learned it would receive additional federal Medicare funds.

Low said then that the state was awaiting Senate action on the jobs bill, and that at least $35 million more was expected.

Baldacci wants to move quickly on new spending recommendations because legislative committees are taking votes on the supplemental budget, which is expected to go before the full Legislature in a few weeks.

Members of the Health and Human Services Committee welcomed Low's report.

"This is great news," said Rep. Pat Jones, D-Mount Vernon. "It warms our hearts for sure."

At the same time, Rep. Sally Lewin, R-Eliot, warned that federal support will soon run out.

"When this money dries up, we're going to have problems that are going to make this year look like child's play," she said.

Low agreed, saying it would be prudent to look for ways to put some money aside.

"We're going to have the same conversations anyway, but it will be worse if we don't do this strategically," he said.


State House Reporter Susan Cover can be contacted at 620-7015 or at:


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