Maine state budget

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Maine has faced a succession of state budget revenue declines and forecasts. For FY 2011, Maine is facing an expected $438 million budget gap.^[1] The Maine State Legislature sets a biennial budget on odd years. The Legislature met from December 3, 2008 to June 13, 2009.^[2] Gov. John E. Baldacci presented his budget on May 1, 2009 to close the $129 million budget gap for FY 2009, which ended June 30, and the estimated $440 million gap in fiscal years 2010-11. Gov. Baldacci presented in January a budget plan that reduced General Fund spending for the two-year budget from $6.3 billion in 2008-09 to $6.1 billion for 2010-11.^[3]

The General Fund 2-year budget was reduced to $5.8 billion, including:^[4]

• Increased health insurance cost sharing for new State employees;
• Elimination of planned merit increases;
• 12 government shutdown days per year in 2010 and 2011; and
• Creation of a Commission to Recommend Streamlining of State Programs and Services.

Gov. Baldacci's plan also reduced funding for:^[5]

• K-12 and higher education;
• The Department of Health and Human Services;
• The Homestead Exemption program;
• The Circuit Breaker program;
• Municipal Revenue Sharing; and
• The Milk Subsidy, by capping the amount available.

The budget relies upon $75.5 million from the Budget Stabilization Fund in 2009 and 2010 and $40.6 million from the State’s Working Capital Fund. Taken together, the two funds represent the State’s reserves.^[6]

Maine's shortfalls:^[7]

Maine's General Fund Revenues in billions (estimated FY 2010-2013):^[8]

[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.^[9]

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.^[10]

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.^[11]

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).^[12]

See Maine state budget (2008-2009) for more details.

[edit] 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.^[13]

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.^[14] Maine's CAFRs are published online by the Office of State Controller. Edward A. Karass is the State Controller of Maine.^[15]

The Office of the State Controller has the following functions: ^[16]

• Statewide support Bureau in all areas of responsibility
• Statewide accounting and appropriation control
• Review, approve and consolidate all accounting transactions for all agencies within the *Executive, Legislative and Judicial branches of government
• Establish and monitor State accounting policies and procedures
• Establish and administer State travel and expense policies
• Review, compile and report all statewide accounting information
• Review Statewide and agency level internal controls.

The Office of the State Controller has five divisions: ^[17]

• Administration, responsible for all Financial Reporting
• Financial Reporting and Analysis, prepares and distributes the State’s Comprehensive Annual Financial Report
• General Accounting & Records Management, monitors expenditures against appropriations
• Internal Audit, reviews Statewide and agency level internal controls
• Payroll, examines and audits all State payrolls

[edit] Accounting transparency checklist

Comprehensive Balanced budget Timeliness Usability

[edit] The good

• The website has Comprehensive Annual Financial Reports (CAFR) dating back to 2000.^[19]
• An independent auditor’s report is published on page 2 of the document.^[20]
• It provides supplements to the budget workup, such as non-major Governmental funds, starting on page 102 of the document.
• The budget is posted using organized and consistent methods of financial reporting.
• Maine law requires a balanced budget.^[21]
• It includes all costs incurred by the government, including long-term liabilities, starting on page 7 of the document.
• The CAFR compares estimated and actual budgetary numbers, such as on page 102 of the document.

[edit] The bad

• The Maine office was not precisely timely in submitting the budget.
• The CAFR is posted in PDF format, so it’s not searchable online.

[edit] Transparency

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

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

[edit] Website evaluation

Budget Usability Elected Officials Administrative Officials Ethics Audits Contracts Lobbying Public records Taxes

Maine.gov is the website for the state of Maine.

• Main article: Evaluation of state websites

[edit] The good

• Site has a search function and is fairly easy to navigate.
• Budget is published.^[22]
• Comprehensive information on making public records requests is provided.^[23]
• State ethics commission information is provided.^[24]
• Audit reports are published.^[25]
• Service^[26] and labor contracts are available.^[27]
• Tax information is posted.^[28]
• Elected officials are available with contact information in a searchable database.^[29]
• Administrative officials listed with contact information under respective agency.^[30]
• Provides list of registered lobbyists and lobbying reports.^[31]

[edit] The bad

• Does not provide information on state-paid lobbying and agency lobbying contracts.

[edit] Economic Stimulus Transparency

• The American Recovery and Reinvestment Plan of 2009 designated $787 billion to be spent throughout the U.S. Of that $787 billion stimulus package, it is estimated that 69%, or over $541 billion, will be administered by state governments.^[32]

• Maine will receive an estimated $683,807,294 ^[33]

• 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.^[34][35]

Maine more than doubled its number of Congressional Districts, adding three more to its existings two, according to the ARRP tracking website.^[36]

[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

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

[edit] See Also

Maine taxpayer-funded lobbying

[edit] External links

Tax Code Ballot Measure (2009)

• 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 State Legislature
• Maine Public Spending Research Group
• Maine Taxpayers United

[edit] References

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	v • d • e State of Maine Augusta (capital)
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