Maine lawmakers late Monday evening passed and Gov. John E. Baldacci signed into law a supplemental budget to address the $190 million shortfall it was facing for its $6.3 billion, fiscal 2008-09 biennial budget. The revisions included no new taxes and did not dip into the state's rainy-day fund.
"This has been a difficult budget process," Baldacci, a Democrat, said in a statement. "Maine has been forced to deal with a $190 million revenue downturn caused by a struggling national economy. The decisions have been difficult, but the end product is a reasonable and responsible budget that puts us on firmer financial footing moving forward."
The largest adjustments included budget cuts of nearly $65 million out of health and human services and another $34 million out of state aid to K-12 education. The budget revisions also included smaller cuts across the board within government agencies.
The House passed the budget around 9 p.m. on Monday with an 84-to-55 vote, which was mostly on party lines with a Democratic majority. The budget then moved to the Senate, where it passed with an 18-to-17 vote along party lines with a one-person Democratic majority. Baldacci then signed the package of revisions before midnight.
While budgets in Maine that are passed with a two-thirds majority vote take effect immediately, those that do not have a two-thirds majority need 90 days to officially become law. The Legislature just made its deadline in order for the budget to take effect on June 30, the last day of fiscal 2008. Maine law requires that the budget be balanced before June 30.
The parties split over a Republican proposal that would restructure eligibility in Medicaid programs to cut long-term costs and save an additional $20 million. Democrats said that would cut funding for health care for about 22,000 people living in poverty. Instead, Democrats found places in the budget to make cuts so that the Medicaid programs could remain intact.
While Maine was already facing a $95 million revenue shortfall for fiscal 2008-2009, the state's Revenue Forecasting Committee in February added an additional $95 million shortfall to the forecast.
Revenues were down in Maine in a number of categories, including sales and use tax, individual income tax, corporate income tax, and cigarette and tobacco tax, according to officials in Baldacci's office. Lottery revenues, however, were up.
Of the $190 million expected revenue shortfall, about $65 million of it is in fiscal 2008, while the additional $125 million is in fiscal 2009.