Governor Baldacci Orders Immediate Spending Reductions

Press Release

Governor Baldacci Orders Immediate Spending Reductions

Governor John E. Baldacci today issued an executive order directing State agencies to cut the rate of spending in the current fiscal year by almost $80 million.

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

Earlier this month, the State's Revenue Forecasting Committee estimated that State revenues would fall between $100 million and $150 million short of projections. The RFC is scheduled to meet again Friday to further refine its projections.

"Our country faces a dangerous recession, and Maine, like a majority of States, must deal with declining revenues," Governor Baldacci said. "We have an obligation to make sure we finish the year with a balanced budget. Today's curtailment is the first of a series of steps we must take to bring spending in line with available resources."

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.

"As we evaluated the steps we could take with the curtailment, we worked to limit the direct impacts on the people who need help the most - vulnerable populations, children and public safety," Governor Baldacci said. "After six years of constrained State spending, there are no easy choices."

Governor Baldacci will present a supplemental budget for fiscal year 2009 to the Legislature in December. The budget will contain many of the cuts implemented by the curtailment, along with additional changes in statute to further reduce State spending to meet the current revenue downturn. The Governor will present the FY 2010-2011 biennial budget in January.

"The current budget situation requires us to take action immediately. Every day we wait makes the budget cuts more severe and more difficult," Governor Baldacci said.

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.

"Maine faces significant challenges," Governor Baldacci said. "But I am confident that working together we can find the best path forward."

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