Republicans are raising the alarm about a projected shortfall in the next biennial budget, which begins July 1, 2025 and is always one of major preoccupations of the legislative session.

Democrats respond, more or less, with the idea that we can handle it. They suggest the numbers – $950 million, split two-thirds to one-third between the General Fund and Highway Fund — aren’t shocking given that the state has about the same amount in reserve through the “rainy day” fund.

Both sides have a point, but neither is focusing on the main challenge: After half a decade of extensive federal pandemic aid and record capital gains receipts, the party is probably over.

Retrenchment is beginning in states across the country. Extraordinary amounts of federal money flowed through the 2020 Cares Act, bipartisan emergency aid voted through when the nation shut down and endured a mind-boggling but short recession.

More was disbursed through the Democrats-only 2021 American Rescue Plan under President Biden, and the Bipartisan Infrastructure Act helped, too.

Maine undertook a record road reconstruction program following decades of dismal investment – though it should have funded a broader variety of transportation projects.

The state also poured dollars into perceived emergencies – failing EMS services, short-staffed nursing homes, mental health and substance use programs and a dozen other areas where structural weaknesses were papered over.

Then there were impressive amounts of municipal and school aid rolled out by Democratic legislators while Republicans proposed, vainly, cutting tax rates instead.

Property tax relief is a proven winner for Democrats, and there’s more than ever before – not only restoration of municipal revenue sharing to 5% of sales and income taxes, up from the 2% Gov. Paul LePage left behind, but 55% of approved school budgets – a height never reached before, and by far the state’s biggest expense.

One anomaly from the federal aid packages is that in Maine, like the rest of New England, county government is vestigial, but got plenty of money from the Rescue Plan, mostly given away in grants.

Possible restructuring of county government to bridge the gap between what the state should take on and what cities and towns can do has yet to be considered. We pay a high price for having no mid-level government in this geographically large but sparsely populated state.

For the next budget, the largest dilemma may occur from fund transfers that were novel and – until lawmakers changed the statute – illegal, moving a projected $236 million next time from the General to Highway Fund, a gimmick created to cover lawmakers’ unwillingness to increase fuel taxes even for inflation; the per-gallon tax has been stuck at 30 cents since LePage abolished indexing in 2009.

Current law makes those transfers the Highway Fund’s second largest revenue source, behind fuel taxes ($421 million) and ahead of registration and license fees ($195 million), also unchanged for years. In fourth place comes another little-known patch, $118 million from state liquor revenues.

With developing shortfalls in the cornucopia of General Fund programs, this robbing-Peter-to-pay-Paul approach must end, making highway operations stand on its own two feet.

Vehicle emissions account for half of all greenhouse gases produced in Maine, and we desperately need to shift away from fossil fuel burning. Increasing taxes and fees moderately is only common sense; instead there’s a myth that the gas tax is “outmoded” – bunk 30 years ago and even more misguided today.

Fortunately, there’s another long-neglected funding source that could help out: surpluses produced by the Maine Turnpike Authority, unlike most state toll roads administratively separate from Maine DOT.

Until 1991, the Turnpike transferred money annually but the provision was eliminated, possibly an oversight, when the Sensible Transportation Act was enacted by referendum.

The attraction is that while gas tax revenues are split about evenly between Mainers and visitors, the bulk of Turnpike tolls are paid by those from away.

With the planned $330 million Gorham Connector apparently headed for mothballs, not only will tolls not need to increase, but there should be plenty of pocket change to share with DOT.

The General Fund situation is too vast and complex to predict, but suffice it to say there are many adjustments on both revenue and spending sides to bridge the gap no matter who’s running the House and Senate.

Gov. Janet Mills remains in office for two more years, and is unlikely to change her basic priorities, whatever the election results.

Next year should provide moderate pressure to overhaul an undisciplined budget process that has seen scant changes for decades. We’ll see whether an experienced governor and a largely new cast of legislative leaders can rise to the challenge.

Douglas Rooks has been a Maine editor, columnist and reporter for 40 years. He is the author of four books, most recently a biography of U.S. Chief Justice Melville Fuller, and welcomes comment at drooks@tds.net.