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STATE HOUSE

March 12

Budget picture improves

By Susan M. Cover scover@mainetoday.com
MaineToday Media State House Writer

AUGUSTA -- Gov. John Baldacci wants to use additional federal money to help the state's Drugs for the Elderly program, nursing homes, schools and municipalities.

Separately, he is proposing to put nearly $11 million into the state's rainy day fund.

Baldacci released his ideas Thursday, one day after his administration announced it would be getting federal Medicaid money that exceeded expectations. By Thursday, that number had grown to more than $86 million, with $35 million already accounted for in the current state budget.

Earlier this year, Baldacci had proposed a series of cuts to human services, schools and cities and towns because the state had a projected $438 million budget shortfall. Since then, an increase in projected revenues and federal money has reduced the deficit to about $310 million.

"The federal support will help Maine's economy recover from the worst recession since the Great Depression," Baldacci said in a statement. "These resources offer a bridge to better days."

Baldacci's recommendations for how to use the new money eliminates or reduces cuts he originally proposed in several areas, including:

* $35 million to fill the placeholder in the budget;

* $33.6 million for Drugs for the Elderly, hospitals, nursing homes, service providers and crisis services;

* $5.6 million for the Circuit Breaker program, which helps reduce taxes for low- and middle-income households;

* $5 million for municipal revenue sharing;

* $5 million to school funding;

* $1.1 million for schools who supported the state's school district consolidation law, but whose partner districts rejected it;

* $580,000 for adult education; and

* $80,000 to the judicial branch.

The governor also wants to spend these sums, which represent new spending, not restored cuts:

* $470,000 in debt service at the University of Maine System

* $200,000 to the Maine Uncontrolled Hazardous Sites Cleanup

Deputy Chief of Staff David Farmer said that, in addition to the $86 million, the governor has identified nearly $11 million to be set aside in the state's Budget Stabilization Fund, also known as the rainy day fund.

The money comes from unanticipated savings from shutdown days and other personnel cuts, plus $3.6 million that was already set aside in the current budget, Farmer said.

"It's been a priority of the governor to start rebuilding the reserves," he said.

Baldacci's recommendations will now be considered by lawmakers as budget negotiations continue.

Susan Cover -- 620-7015

scover@centralmaine.com