AUGUSTA – With more money going out the door than coming in, Gov. John Baldacci on Tuesday ordered $38 million in state spending cutbacks, saying they avoid hitting Maine’s most vulnerable residents and will cause no layoffs.

Baldacci said many of the temporary curtailments will be included in the supplemental state budget he will submit to the Legislature after it returns in January. The governor said bleak economic trends led to his order.

“It’s a scenario being repeated around the country, as states are forced to deal with a slowing national economy and a beleaguered housing market and tightening credit,” Baldacci said.

“Consumer confidence has fallen, record high energy prices and diesel fuel prices are straining family budgets and businesses alike. And there’s the possibility that the national economic news will remain difficult into the future. We must be prepared.”

The Democratic governor’s announcement drew mixed reactions from Republican legislative leaders and social service advocates.

Economic forecasters have predicted a state revenue shortfall of $95 million for the current two-year budget cycle, due in part to slower than expected income from corporate and sales taxes. Baldacci’s order addresses the remaining six months of the present fiscal year.

Baldacci said the curtailments leave core services intact and will “protect the most vulnerable people in our society.” The cuts are also targeted so no federal matching money is jeopardized, he said. They don’t call for layoffs, but preserve a hiring freeze already in place.

About $34 million of the total curtailments would affect two of the state’s largest departments – Education and Health and Human Services. Highways, bridges and other transportation programs are not addressed in Tuesday’s order.

In Health and Human Services, many of the reductions remove people not eligible for MaineCare from a variety of state-subsidized programs. The state will also cut out child care payments for children in foster care when their adult caretaker does not work outside the home.

Among other DHHS cuts are school- and community-based domestic violence and sexual assault prevention programs and funding for home-based care services for elderly people who are on a waiting list.

The Education Department will cut spending in programs in general purpose aid over which it has discretion. It also reserves the right to delay aid payments to local school units if desired savings can’t be achieved.

Baldacci’s order won praise from House GOP Leader Josh Tardy, who said the governor “has done the right thing by tackling the problem now and not waiting for the Legislature.”

“The sooner the spending imbalance is addressed, the better,” said Tardy, R-Newport, who also commended Baldacci for addressing the shortfall without calling for a tax increase “but by judicious spending reductions across the board.”

Critics said the cuts to at least one human services program will result in a loss of federal money. They also said the administration should have looked at other ways to offset the shortfall, such as drawing from the state’s Rainy Day contingency fund or raising new revenues, even if only temporarily.

“Our state’s budget is the clearest statement of the shared values of those of us who live here,” said Betsy Sweet, who represents several nonprofits. “The cuts proposed do not fall equitably on all; in fact they hurt most those who have the least.”

In his announcement, Baldacci acknowledged that “families and businesses all around Maine are struggling.”

“They have to tighten their belts, and government must do the same,” he said.


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