The 124th legislative session is well under way and the people who create the state budget – the Appropriations and Financial Affairs Committee, of which I am Senate chair – have been very busy.

We have listened to days of public testimony, at the same time working with the 17 committees of the Legislature. We have worked night and day seeking the best possible options for balancing the $155 million budget shortfall for this fiscal year.

The result of our work will be a balanced budget that reduces spending and at the same time protects our most vulnerable citizens. The fiscal year ends on June 30, so I am hopeful that the full Legislature will vote on this supplemental budget by the end of the month.

Writing the budget for the next two years, which will take effect on July 1, 2009, is a great challenge. We must close a gap that could reach $1 billion. We will be looking at even greater, tougher cuts during this cycle. The governor has already outlined a proposal that is $200 million less than the previous budget.

Education and health care, which make up the largest part of the state budget, saw major reductions in the supplemental budget. Local school districts across the state face a $27 million decrease in state funding. The state portion of Raymond’s school budget was reduced by more than $220,000, Windham’s by more than $400,000 and School Administrative District 6’s by more than $500,000. School districts are already trying to compensate for the reductions. These cuts are difficult to take, but the upside is that no further cuts were proposed in next two-year budget.

The governor’s proposed budget also looked closely at hospital revenues and proposed to reduce Medicare reimbursements to hospitals with hospital-based physician practices. As well, it proposed to reduce funding to critical-access hospitals, which are reimbursed by Medicare on a “reasonable cost basis” for services provided to Medicare patients. These hospitals were designed to improve rural health-care access and reduce hospital closures.

Together, these two reductions will cost Maine hospitals almost $13 million in state and federal funding. For Bridgton Hospital in particular, that is a loss of just over $700,000. The negative impact on our rural hospitals is significant. My intention, and hope, is to avoid these cuts and to find another way to provide the funding necessary for these hospitals.

Another issue that the appropriations committee looked at was Maine’s rising unemployment rate and the stress it has imposed on the Department of Labor’s unemployment call centers. As the rate rose to 6.3 percent, demand for assistance also increased, a problem compounded by understaffing at the call centers. Many people calling to file a claim received a message that their call couldn’t be processed and to please try again at another time. With federal money coming available, though, the Department of Labor has been authorized to hire an additional 24 staff people at the call centers. These new workers will be fully trained and ready to manage the backlog of claims by February.

These are tough financial times and we must make difficult decisions. Everyone has to sacrifice during this budget cycle. But we are working together, both Democrats and Republicans, to ensure that the values of Mainers are reflected in these decisions.

Senator Bill Diamond is a resident of Windham, and serves the communities of Casco, Frye Island, Raymond, Standish, Windham and Hollis as Senator of District 12. He can be contacted at 287-1515 or at his Web site, www.mainesenate.org/diamond.

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