Governor Orders Immediate Spending Reductions

[MaineDem]

Dec. 18, 2007
FOR IMMEDIATE RELEASE
Governor Orders Immediate Spending Reductions
Issues Executive Order Curtailing State Spending by $38 million

AUGUSTA - Governor John E. Baldacci today issued an executive order directing State agencies to reduce the rate of spending in the current fiscal year by $38 million.

The order, called a curtailment, will ensure that the State finishes the fiscal year with a balanced budget.

In November, the State's Revenue Forecasting Committee announced a $95 million revenue downturn for the two-year budget period.

"Simply put, the amount the State is slated to spend for the rest of this fiscal year exceeds the money we have coming in by $38 million. In fiscal year 2009, the amount is about $57 million," Governor Baldacci said. "The revenue downturn is a serious challenge that we must begin to address now."

"I have a Constitutional duty to balance the budget," Governor Baldacci said. "Today's order will make sure that obligation is met while also protecting our State economy and the vital safety net for Maine people."

Under State law, the Governor has the authority to reduce spending on programs approved by the Legislature with a curtailment order. The curtailment order is temporary and serves to reduce the rate of spending until a supplemental budget can be passed to address the predicted revenue shortfall. The curtailment order applies only to the current fiscal year.

"People and businesses all around Maine are hurting. High heating oil prices and a struggling housing market are forcing people to make tough decisions. Families are struggling," Governor Baldacci said. "They have to tighten their belts, and government must do the same. We can't spend money that we don't have."

Governor Baldacci said that his supplemental budget for FY 2008-2009, which will be presented to the Legislature in January, will mirror many of the cuts implemented by the curtailment. The supplemental budget will also allow some of the curtailments to be adjusted.

"We're already about half way through the current fiscal year. Every day we wait for action, the task of balancing the budget gets more difficult and the cuts become larger and harder to make," Governor Baldacci said. "We are doing what is necessary right now."

The process to identify the curtailments began when State departments and agencies were assigned reduction targets. Each department or agency presented options and program impact analyses to meet the targets. The proposed reductions were evaluated based on a number of factors, including the effects on public health and safety, the extent that the impact could be minimized and whether the proposal, insofar as practicable, followed the intent of the Legislature.

"Until the supplemental budget is passed, the curtailment will ensure our spending doesn't exceed our revenues," Governor Baldacci said. "Right now, we have more money going out the door than we have coming in. That can't continue. We must live within our means."

For more information and supporting documents, please visit http://www.maine.gov/governor/baldacci/policy/Curtailing.html.