Published in the Current
With a projected state deficit of more than $100 million, further cuts to schools will be needed and that means officials in Cape and Scarborough will have to revise next year’s school budgets in the coming months.
In what was already a tough budget year in each town, Scarborough stands to get about $90,000 less than it was expecting, and Cape expects to lose nearly $40,000.
In March, Maine Revenue Services had predicted a $90 million shortfall for this fiscal year, and a similar shortfall for next year.
But now that April and May revenue numbers are in, the state is expecting a further reduction in revenue of as much as $25 million.
In light of that, $10 million has been cut from General Purpose Aid to education. The Department of Education revised the money each school district will get in what is being called an “emergency curtailment” of the funds.
Gov. Angus King also has proposed taking $10 million from funds for the laptop initiative and other cutbacks, including mandatory furloughs for state employees.
The state Legislature’s approval is required for about half of the proposals, according to King spokesman Tony Sprague, but legislators and the governor are reluctant to hold a special session this summer to deal with the problem.
Local legislators are upset about the cutbacks, but say there is little they can do.
“It stinks,” said Sen. Lynn Bromley, a Democrat. But, she said, “GPA is such a big piece of the budget” that it’s hard to ignore when cuts need to be made.
Most legislative leaders, she said, were hoping to avoid a special session. Bromley is among them, she said, because reopening the budget discussion may make matters worse for her constituents.
“It’s not going to get any better,” she said.
Bromley will be holding a series of community meetings about the issue in South Portland, Scarborough and Cape Elizabeth, in coming weeks.
“We absolutely need tax reform,” Bromley said.
One of the subjects she wants to discuss is the way school construction is funded, which presently takes away money from the funds available to GPA, and provides state funds to build schools in communities that have trouble paying to keep them open, she said. “We need to think about how to do more things in a regional way.”
Bromley also expects the Legislature to reopen discussions of other ways for communities to raise money, including the local option sales tax, or broadening the sales tax.
Bromley’s colleague, Sen. Peggy Pendleton, also a Democrat, is unhappy with the cuts to GPA. “I think they’re really unfortunate,” she said. “That is a very wrong move. It shifts the burden back onto the property taxpayer.”
And if a special session is required, Pendleton said, she wants the governor to communicate his plans first. “We’ve had no briefing on this from the governor,” Pendleton said.
She also expects the state’s entire budget to be laid open again. “We have to look at the whole budget,” Pendleton said, especially those funds in the current budget that are for programs not slated to begin until 2004.
Either way, she said, “before I get called in, I want to have the information.”
Rep. Larry Bliss, a Democrat, said he wants to reopen the budget process. “Some of the things the governor wants to do, he can’t do without legislative approval,” Bliss said.
He said the GPA money should be preserved. “Do I think the money should come out of GPA? Definitely not. Cape Elizabeth and South Portland really got hit hard already,” he said.
Bliss also said he likes the laptop idea a lot, but given budget constraints, “this might not be the right time.”
Referring to claims by the governor that the state’s contract with Apple may be as expensive to get out of as to fulfill, Bliss said he had originally heard that the contract included a low-cost way out for the state, but is now being told otherwise.
Rep. Harold Clough, a Republican, wants to go back into session to deal with the crisis, though he admitted he didn’t know what would happen. “I don’t know what to expect,” Clough said. But he advised meeting soon.
“The problem is getting worse by the day,” he said. “The sooner you deal with it, the better.”
Specifically, he said, the governor’s proposal to save money by furloughing state employees is flawed.
“We need to really get at the overspending that we do,” Clough said.
Sprague in the governor’s office and Laurie Lachance, an economist at the State Planning Office, both say Clough’s hurry is unwarranted.
“The proposals that (King) put forward do not rely on a specific date for the Legislature to have acted,” Sprague said.
He pointed out that last year, the total amount distributed via GPA was $700 million. Under the governor’s revised plan, the total would still increase to $720 million, but that is less than originally hoped for, he said.
But if the revenue projection has declined, he said, it would be expected to be lower next year, meaning the budget shortfall could change from $180 million over two years to as much as $230 million.
Lachance said her office has not had a chance to review and analyze the new projects from the Maine Revenue Service, and said new “official” revenue projections won’t be available until August, because final numbers for the 2002 fiscal year, which closes June 30, will not be available until mid-June.
“Year-end results are very important,” she said.
After Sept. 11, 2001, the revenue forecast declined, and King used some “rainy day fund” money to balance the budget, Lachance said.
“That has moved the balancing problem into fiscal year 2003,” she said.
If the projections fall further, 2003 could be a far tighter year than this one, she said.
And looking forward, the numbers don’t get any better, with state economists predicting between $350 million and $750 million in “structural
gap”–the difference between costs to fully fund all of the state’s legal obligations and the revenues available to pay for them – in 2004-2005.