Maine Faces Budget Shortfalls

Late last week, news broke that the state budget gap is now expected to exceed $400 million.

Governor Baldacci is reportedly refusing to raise taxes to plug the budget hole – instead he has begun to push the state to cut spending levels. Baldacci’s target? A lower spending level than the first budget he submitted in 2003.

The governor’s contention is that raising taxes in the middle of a painful recession will hurt Mainers more dramatically than cutting areas of state government.

On Friday, Baldacci ordered Maine state departments to cut spending by $63 million to take some important first steps to make sure the budget is balanced. The biggest cuts will be to both education and human services.

In his weekly radio address Saturday, the governor insisted that his cuts were necessary. Republicans responded by saying that they will be committed to longer term, structural changes to make state government more efficient and affordable.

The continuing budget problems in Maine simply mean that debates over public tax policy, spending, the efficiency of government, and what state services need to be reformed will continue to be a major campaign theme through 2010.  Expect Republicans to pounce on this on the campaign trail, and argue for wholesale reform at the state level – including the elimination of Dirigo Health, and state welfare reform.