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April 24, 2009 Jay Finegan, 287-1445
Republicans on Appropriations Committee Say Budget Situation ‘Cries Out for Structural Change’

AUGUSTA – Republican members of the Legislature’s Committee on Appropriations and Financial Affairs said today that the projected $570 million revenue shortfall over the next two years may not be the end of the state’s financial difficulties. The Appropriations Committee is working to produce a state budget for the 2010-2011 biennium, which starts on July 1.

“The Legislature has a bipartisan obligation not just to produce a balanced budget for this biennium but to come up with a game plan for the long term,” said Rep. Sawin Millett (R-Waterford), the House GOP lead on the panel. “This is not a one biennium problem. We could be facing another three to five years of economic uncertainty before Maine returns to the statewide employment levels of early 2008. We anticipate that the associated declines in General Fund revenues could last through the 2012-2013 biennium, which would carry the problem through the next Legislature.”

Rep. Millett noted that the deterioration of the state economy may be intensifying. “We understand that the current situation will likely worsen in the second year of the next budget cycle, when the revenue decline is expected to be even more severe,” he said. “The situation cries out for structural change, not just a one-time belt tightening approach to budget balancing.”

State Sen. Richard Rosen (R-Hancock County), the Senate Republican lead on Appropriations, said Republicans continue to oppose raising broad-based taxes to plug the budget hole, a position shared by Governor Baldacci. “We recognize that every family in Maine is struggling in this recession and we will approach it the same way,” he said. “We need to prioritize state spending to balance the budget, but do that in a way that protects vulnerable residents.”

Sen. Rosen also noted that the stimulus funds coming from the federal government provide one-time money designed for “front-loaded” spending. “The stimulus money ends in 2011, when we will face a cliff-like falloff in available funds,” he said. “I would recommend that municipalities, school systems and other institutions that rely on state spending work with us cooperatively to use this stimulus interlude to plan for leaner times ahead.”

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