Saying the Democrats don’t have the stomach to make the cuts needed, the chief architect of the people’s veto to overturn borrowing in the state budget is pushing ahead with a petition drive that has to deliver 50,000 signatures in less than three weeks.

“You need to have substantial spending cuts,” in order to rescind the nearly $450 million in borrowing that is currently in the 2006-2007 budget, said Sen. Peter Mills, R-Somerset. “This institution does not have the stomach to make them.”

The people’s veto would put the borrowing, which would be done by floating revenue bonds, on the November ballot. Mills said his organization has 30,000 signatures to date, but not all are certified as being from registered voters. Just over 50,000 have to be certified and turned into the Secretary of State’s Office by June 28.

Mills feels so strongly that time is running out to rescind the borrowing, he said Tuesday he won’t vote for the Part 2 budget – recommended unanimously by the Appropriations Committee Monday night.

“The Part 2 spends money and implies to those constituencies that’s the level of funding they can expect,” Mills said. If the borrowing in the first part of the budget is overturned, “all the spending in the Part 2 budget would evaporate and then some.”

The Part 2 budget restores an estimated $73 million cut in Medicaid funding, by cutting some Department of Health and Human Services programs, taxing services for the mentally retarded and holding back a portion of money promised to hospitals for the Medicaid clients they serve. But because the state identified some unexpected revenue – including higher than anticipated income tax collections – the cuts to programs and the hospitals were less severe than originally expected.

Part 2 also makes up a $24 million hole in the current budget that ends on June 30. A two-thirds vote is needed on the budget so the money can be spent now, rather than waiting 90 days after the Legislature adjourns.

“In eight days, we’re going to say, ‘oops, there’s a whole new level of spending cuts needed?'” Mills asked, saying because the Part 2 budget didn’t address the borrowing, “I don’t see a vehicle,” for dealing with it.

Sen. Michael Brennan, D-Cumberland, the Senate majority leader, said the plan was to get Part 2 tied down and then address the borrowing. He predicted the Appropriations Committee would report out a proposal to rescind the borrowing by this weekend.

The House is scheduled to meet on Saturday, with a deadline of June 15 to finish up legislative business or go into a special session that would require extra pay for legislators of $100 a day.

Brennan said his caucus is still talking about getting rid of the borrowing through 50 percent spending cuts and 50 percent tax or fee increases. The actual amount that needs to be reduced is $250 million that is earmarked for operational expenses. Another $200 million was to be used to pay down the state’s retirement debt, but isn’t needed to keep the lights on.

“There is some support for a cigarette tax, and some support for broadening the sales tax,” Brennan said. There is also discussion about increasing the meals and lodging tax, which currently is at 7 percent.

While Democrats say they could support $125 million in spending cuts and $125 million in tax increases, it isn’t clear whether there are really the votes to do either.

Brennan admitted his party would find it hard to cut $125 million, which he said would be done across the board. The Department of Health and Human Services and education – minus general purpose aid for schools – would take the biggest hits because they are the biggest spenders.

“It comes down to the hard choices,” said Sen. Richard Rosen, R-Hancock, another supporter of the people’s veto petition drive. “Their hard choices come down to do they want to raise taxes or do they want to borrow the money…It doesn’t feel like they’re heading to the kind of restructuring the Legislature needs to face.”

While some moderate Republicans have said they’d support a temporary increase in the sales tax, leadership has said it wants more spending cuts than tax increases. A figure floated recently by Republicans calls for $200 million in cuts and the rest in tax increases, mostly likely through a hike in the cigarette tax.

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