AUGUSTA (AP) – As legislative budget writers sat down again Wednesday to look for new savings, state finance officials offered an indirect warning that budgetary pressures may increase.

“Flat consumer sales and a slowing in year-over-year withholding growth to 2 percent over the three-month period ending in August suggests that the Maine economy continues to be hit hard by volatile energy prices and weakness in the residential housing market,” the Appropriations Committee read in a report from Baldacci administration budget chief Rebecca Wyke.

“If the national economy slows as much as some economists are projecting over the next few quarters, the Maine economy will face additional challenges,” the report said.

The Appropriations panel this week is taking a look at an $11.3 million package of proposed spending cuts offered by the Baldacci administration as a way to meet a target set in the new $6.3 billion biennial state budget.

The spending reduction package put forth for consideration by the Appropriations Committee, slightly bigger than the panel’s $10.1 budget target, suggests an implementation of competitive bidding for therapeutic foster care to realize $2.1 million in savings and the increased placement of children in state custody into family settings for savings of $1.4 million more.

Also attached to the administration package is a proposed change by the state treasurer’s office that would consolidate cash pool investment earnings to benefit the General Fund by $1 million.

Another $1.6 million in savings would be netted from standardizing lottery agent commissions to put them more in line with other states, according to the administration proposal. The proposal also suggests a custodial staff reorganization that would in part eliminate one position and save overall $19,538.

The whole package would do away with 10 positions.

Also up for review are suggestions from the public received through a virtual suggestion box created by the Appropriations Committee staff.

The Appropriations Committee is expected to coordinate its efforts with a special Committee on Future Maine Prosperity, which met for the first time Tuesday.

Including four senators and 11 voting members of the House of Representatives, the panel was created at the urging of legislative leaders to study how to bolster the state economy in lasting ways.

Chairing the panel are Sen. Dennis Damon of Trenton and Rep. John Piotti of Unity, both of whom are members of the Legislature’s Democratic majorities, and Damon and Piotti took the lead at the opening session in summarizing their personal backgrounds and suggesting how they have influenced their economic thinking.

Damon recounted change along the Hancock County coast, while Piotti declared his belief that economic development and good planning can go together smoothly.

Other panelists also indicated interest in having the committee adopt a long-range view, with members from border communities among those saying any comprehensive examination should look beyond Maine for possible guidance.

“For a lot of people in our area, it’s hard not to compare,” said Republican Sen. Jonathan Courtney of Sanford.

AP-ES-09-26-07 1441EDT

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