Maine state budget

From Sunshine Review

National Taxpayers Union
State budgets Public employee salaries Public pensions States with spending online Collaborative transparency projects Model transparency legislation State Budget Solutions
Action center
Sign up for e-updates Take action

Maine has faced a succession of state budget revenue declines and forecasts. The state operates on a biennial budget schedule. The state announced on July 20, 2010, that it ended Fiscal Year 2010 with a surplus of more than $70 million.^[1] Gov. John Baldacci said that the surplus resulted from higher-than-expected revenues from corporate income and sales and use taxes, and also from limiting spending by state agencies. State law requires the surplus to be allocated to a number of state funds, including the rainy day fund, the Finance Authority of Maine's Loan Insurance Reserve Fund, the General Fund's operating capital and the state retirement system and retiree health fund.^[1]

The state included Congressional funds for Medicare in its budget.^[1] Congress did approve those funds and Maine will receive approximately $127 million total from the federal government under H.R. 1586, a $26 billion plan to give states money for Medicaid and education that the President signed into law on August 10, 2010.^[2]

See also: The Maine State Budget on State Budget Solutions

[edit] Fiscal Year 2010-11

For FY 2011, Maine was facing an expected $438 million budget gap.^[3] At the time the state's budget was passed, the gap was $310 million, less than originally predicted due to increased federal funding and optimistic economic predictions.^[4]

On March 30, 2010, the Maine State Legislature approved the state's supplemental $5.7 billion two-year budget^[5], which closed a $310 million gap between revenues and expenses.^[6] The Senate voted to approve it by 110-35, and the Senate tally was 31-2.^[6] The budget includes cuts to social programs such as MaineCare, revenue sharing and school subsidies that legislative leaders called painful, but the budget also includes no general tax or fee increases.^[6]

Gov. John Baldacci signed the bill on April 1, 2010.^[7]

Rep. Sawin Millett, the ranking Republican on the Appropriations Committee, worried that the budget's reliance on one-time money will means more cuts for the next two-year cycle.^[5] He said that the current budget will leave the state with a structural gap that will exceed $1 billion in the future.^[5]

Two of the state's largest departments, education and human services, were the focus of most of the cuts. The budget bill cut $47 million from the Department of Education and $22 million from the Department of Health Human Services.^[6] Other measures in the budget include higher education cuts amounting to nearly $8 million and revenue sharing reductions amounting to $16 million.^[6] The cuts tot he Maine school system will help make up for the $100 million of derailed federal funding.^[8]

Other highlights of the FY2011 Budget^[5]:

• Reduced fees for vital records by providing general funds to cover the lost revenue. Fees for birth and death certificates will be lowered from $60 per copy to $15.

• Set up two initiatives to encourage delinquent taxpayers to pay outstanding balances through programs set to run from September through November.

• The State Planning Office is required to come up with a plan by Nov. 30 to reorganize and save $225,000. The general fund portion of the office’s budget is $2 million.

• The State Liquor and Lottery Commission to enter into an agreement to offer the new lottery game Mega Millions.

• The Department of Conservation will install “iron rangers” – fee collection boxes – in certain unstaffed areas of state parks and historic sites.

• A work group to study the delivery of mental health and substance abuse outpatient services will be established.

• The state librarian must designate a nonprofit organization to provide private support for the library.

• The budget provides $3.5 million to pay for the state’s share of disaster assistance dating back to flooding in 2005.

Expenditures 2010-11 Biennial General Fund Budget^[9]

Category	Amount
K-12 Education	$2,433,577,775
Health Care-Medicaid	$1,203,267,461
Public Safety, Justice and Law Enforcement	$581,606,666
Economic Development	$75,529,848
Health Care: Non-Medicaid	$685,144,869
Higher Education	$544,262,787
Debt Service	$244,154,949
Property Tax Relief	$70,103,958
Other	$104,395,230
Natural Resource Management	$147,723,172
Legislature	$59,323,475
Arts and Humanities	$17,568,312

[edit] Budget figures

Maine's top 2 sources of revenue are Individual Income Taxes (43.4% for the 2010-2011 biennium) and Sales & Use Taxes (32.3% for the 2010-2011 biennium).^[10]

Maine's shortfalls:^[11]

FY 2009	FY 2010	FY 2011
$129 million	$196 million	$244 million

Maine's General Fund Revenues in billions (estimated FY 2010-2013):^[12]

FY 2008	FY 2009	FY 2010	FY 2011	FY 2012	FY 2013
$3.09	$2.83	$2.78	$2.77	$2.87	$2.97

[edit] Fiscal Year 2012-13

[edit] Pensions

The state retirement system will need an additional $287 million in the next budget cycle compared with the current state budget to keep it in the black.^[13] Maine Public Employees Retirement System executive director, Sandy Matheson, said that the system will need approximately $448 million in 2012 and $468 million in 2013, for a totaling $916 million for the FY2012-13 budget cycle, compared with the current budget cost of $629 million. The fund lost nearly 19% in FY2009 and had gained 11% as of June 2010. The state is required to pay off all the debt by 2028.^[13]

One of every 10 taxpayer dollars goes toward state employee and teacher pension funds, and the [pinetreewatchdog.org Maine Center for Public Interest Reporting] predicts that within five to six years pension costs could account for 20% of the budget.^[14][15] The state owes the retirement system $4,432,000,000, to be repaid by 2018 in accordance with the state constitution.^[15]

[edit] Transparency

See also: Evaluation of Maine state website

[edit] Government tools

The following table is helpful in evaluating the level of transparency provided by a state spending and transparency database:

Criteria for evaluating spending databases

State Database	Searchability	Grants	Contracts	Line Item Expenditures	Dept/Agency Budgets	Public Employee Salary
None	n/a	n/a	n/a	n/a	n/a	n/a

• The Maine Arts Commission has made a list of grants available.

[edit] Budget Background

On or before September 1st of even-numbered years, the judicial branch, the legislative branch and each executive branch department or agency prepare a budget request for the next two fiscal years. The most important restriction on the Legislature in enacting a budget is the Maine Constitution’s guarantee that the State’s budget will be balanced in each fiscal year of the biennium which results from its prohibition on deficit financing. There are two sections in the State Constitution which address the issue. Article IX Section 14 prohibits the State from incurring long-term debt of more than $2,000,000, except for certain specified emergencies, without a vote of the people. In addition, Article V, Part Third, Section 5 prohibits the use of proceeds from the sale of bonds for current expenditures.^[16]

The Consensus Economic Forecasting Commission (CEFC) was originally established by Executive Order on May 25, 1992, in order to provide the Governor, the Legislature and the Revenue Forecasting Committee with analyses, findings and recommendations for state economic assumptions to be used in developing state revenue forecasts. Creation of the commission was in response to a recommendation of the Special Commission on Government Restructuring in 1991 to establish an independent, consensus process for state economic and revenue forecasting. Public Law 1995, chapter 368 enacted in statute the Consensus Economic Forecasting Commission, maintaining both the structure and intent of the original Executive Order.^[17]

The CEFC is required to develop two year and four year economic forecasts for the State of Maine. In performing this duty, the commission is required by statute to meet twice each fiscal year. No later than November 1st and February 1st annually the commission must develop its findings with regard to the economic assumptions or adjustments to the existing economic assumptions for the State of Maine. The commission submits its findings to the Governor, the Legislative Council, the Revenue Forecasting Committee and the Joint Standing Committee of the Legislature having jurisdiction over appropriations and financial affairs. The Revenue Forecasting Committee is required to use the economic assumptions and forecast of the commission in developing its four-year revenue projections.^[18]

[edit] Accounting Principles

Main article: Maine government accounting principles

Maine’s audit reports are published online by the Department of Audit. The Maine Department of Audit's primary responsibility is to audit the financial statements of the State of Maine and expenditures of federal programs. Neria R. Douglass has been State Auditor since 2005. The Auditor’s statutory authority are under Title 5, Chapter 11 of Maine’s Revised Statutes.^[19]

The Institute for Truth in Accounting (IFTA) rates Maine “Tardy” in filing the state’s Comprehensive Annual Financial Report (CAFR) – The annual report of state and local governmental entities. IFTA rated 22 states timely, 22 states tardy, and 6 states as worst. IFTA does not consider Maine’s CAFRs, and those of the other states, to be accurate representations of the state’s financial condition because the Generally Accepted Accounting Principles (GAAP) basis does not include significant liabilities for the pension plans and for other post employment benefits, such as health care.^[20] Maine's CAFRs are published online by the Office of State Controller. Edward A. Karass is the State Controller of Maine.^[21]

[edit] Economic Stimulus Transparency

Maine will receive approximately $127 million from the federal government under H.R. 1586, a $26 billion plan to give states money for Medicaid and education that the President signed into law on August 10, 2010.^[22] Maine will receive an estimated $683,807,294 ^[23]

As of August 200, 40% of stimulus funds for transportation projects went to Pike Industries, who received $48.5 million of the nearly $121.3 million given to the Maine Department of Transportation.^[24] The largest part of the contract was for the I-295 corridor which cost $31.2 million.^[24] Pike Industries is the only company to have a lobbyist in Augusta. The lobbyist spent $18,500 on lobbying efforts in 2009 and an additional $11,000 during the first four months the legislature was in session in 2010.^[24]

Six Maine agencies will also collectively receive $7 million to weatherize the state’s old housing stock.^[25][26]

• The economic recovery website to show how legislators and government officials in Maine are spending Federal funds is available here.

[edit] Error in ARRP

On November 16 and 17, 2009, many errors were found in the $747 billion plan that showed the plan set aside money for districts that do not exist. According to Recovery.gov, the plan shows its funds will go to 884 Congressional Districts, though there are only 435.^[27][28]

Maine more than doubled its number of Congressional Districts, adding three more to its existings two, according to the ARRP tracking website.^[29]

[edit] Independent transparency sites

The Maine Heritage Policy Center has created a website, www.maineopengov.org, that provides transparency information for citizens.

[edit] Public employee salary information

Main article: Maine state government salary

Maineopengov.org provides state salary information. Users can search by first name, last name, agency, department, subdepartment, position, pay year, and wage range.

A study by the Institute for Truth in Accounting has said that Maine taxpayers have lost on average $3,000 in 2010 because of investment losses at PERS.^[30]

[edit] See Also

• Maine taxpayer-funded lobbying
• Maine Legislature
• Maine state budget (2008-2009)

[edit] External links

• State Budget Solutions, Maine
• Model transparency legislation from the American Legislative Exchange Council is available at this link.
• Maine Heritage Policy Center
• Maine Department of Administration and Financial Services, Bureau of the Budget
• Maine Leads
• Maine Public Spending Research Group
• Maine Taxpayers United

[edit] References

v • d • e State Budgets Cost of state transparency websites • State budget issues • Pubic employee salaries • Public pensions • States with spending online • Glossary of state budget terms Alabama • Alaska • Arizona • Arkansas • California • Colorado • Connecticut • Delaware • Florida • Georgia • Hawaii • Idaho • Illinois • Indiana • Iowa • Kansas • Kentucky • Louisiana • Maine • Maryland • Massachusetts • Michigan • Minnesota • Mississippi • Missouri • Montana • Nebraska • Nevada • New Hampshire • New Jersey • New Mexico • New York • North Carolina • North Dakota • Ohio • Oklahoma • Oregon • Pennsylvania • Rhode Island • South Carolina • South Dakota • Tennessee • Texas • Utah • Vermont • Virginia • Washington • West Virginia • Wisconsin • Wyoming •

	v • d • e State of Maine Augusta (capital)
Transparency	Freedom of Access Act | Transparency Checklist | Government corruption reports | Transparency Legislation | Open Records procedures | Transparency Advocates | Transparency blogs | State budget | Taxpayer-funded lobbying associations |
Divisions	State | List of Counties | List of Cities | List of School Districts | Evaluation of county websites | Evaluation of city websites | Evaluation of school district websites |
Government	Maine State Constitution | Executive | House of Representatives | Senate |
Judiciary	Maine Supreme Court | Circuit Court of Appeals | District Courts | Judicial Nominating Commission | Judicial news | Judicial activist organizations |
Ballot Measures	Ballot measures by year: 1911-2008 | 2008 ballot measures | Statewide ballot initiatives (2009) | List of citizen initiatives | Procedures for qualifying an initiative | Amending the constitution | History of direct democracy | Campaign finance requirements |