By Rep. Christopher W. Babbidge

This is another big week in Augusta. As I write this on Monday, I’ll share with you the four events that are unfolding just today.

First, today the senate finally voted on L.D. 1932, the first education “correction” bill that was intended to represent the department of education’s easiest fixes to the school district consolidation effort. Given the far-reaching consequences of this topic, this bill has drawn considerable debate both in committee and on the floor. My understanding as I write this is that it will come to the house with a provision to permit negotiation on cost sharing above EPS, that the minimum mill rate of 2 mills for education has been stripped, and that a “superunion” inclusion has been added. The latter, added through a senate amendment introduced by Sen. Dennis Damon of Hancock County, permits local school boards to retain their jurisdiction even as several of them share central administration. I’ll have a clearer picture tomorrow.

Second, the financial report is not good. I’ll begin with some background.

This session we’ve been dealing with the bleak economic news that revenues are down resulting in a $95 million budget shortfall. It should be noted that we don’t use the word deficit because, unlike the federal government, we are not, by statute, allowed to have a deficit. We must balance the budget by trimming expenditures so that they match anticipated revenues.     

When economic factors reduce those revenues, the basic choices are to 1) reduce programs that have already been flat-funded or previously cut, with painful consequences to Maine citizens as described by the front-page article in a local paper; 2) reduce General Purpose Aid to education, resulting in a greater burden on local property taxes; 3) reduce the funding stream back to municipalities, resulting, again, in local cuts and/or in a greater burden on local property taxes; or 4) raising revenue, probably with a sales tax hike and further increases in so-called sin taxes.  More cuts will be made as part of the answer, but this menu is not appealing.

Add to that news from Washington that the Bush administration has made rule changes that will cost Maine between $30 and $40 million in federal Medicaid funds, and the financial squeeze increases.

On top of that, the Revenue Forecasting Committee, a nonpartisan independent group that determines Maine’s revenue projections, delivered more bad news today. In light of the national economic downturn, their briefing to state leaders included the prediction that the state will lose an additional $95 million in tax revenues over the biennium, which ends in 2009. The report itself will be available Thursday, going directly to the Appropriations Committee. This announcement means state government faces the task of addressing a budget gap of more than $200 million.

The governor has resisted any new broad-based taxes and taking money from the Budget Stabilization Fund. As matters worsen, though, he is softening on the latter. This so-called rainy day fund is created to buttress the state’s financial condition, and Governors try to resist dipping into it, primarily because it is a one-time fix and needs to be replenished over time. But weighing the pain caused by early-round funding reductions to mental health services and foster care, given the president’s action, and given this new revenue forecast, this option will likely be part of the picture.  

House Speaker Glenn Cummings put out a press release today stating, “The combination of high energy prices, a mismanaged national economy, and devastating Medicaid cuts by the Bush Administration are crippling state revenues here and all across the country… According to the National Conference of State Legislatures, Maine is just one of 26 states that are facing a decline in state revenues as a result of the economic downturn, forcing many states to tap into rainy day funds and make significant cuts to services like education and health care.” 

Third, there is important retirement news for many Mainers. The so-called “cliff” in the Maine State Retirement System has been a source of contention. Adopted nearly two decades ago, the state changed the rules by setting up a two-tiered system of retirement benefits.  As an older teacher I, personally, will not be affected, but over the years I’ve heard many complaints about this unfairness from colleagues who are in the penalized category. 

The good news is that the Labor Committee today reported out a bill to reduce the “penalty” by half, but even that compromise position drew a partisan 8-5 divided committee report. The reality is, however, that if this bill passes the floor of each chamber with any sort of fiscal note attached, unless some very positive things happen in the next eight weeks, it faces an uphill battle in the Appropriations Committee. 

Finally, the bill to permit all the citizens of Kennebunk to be served by their own utility, the Kennebunk Light and Power Company, will be heard on the floor of each chamber this week.  This quasi-municipal entity now serves all but the most eastern portion of Kennebunk, which, in turn, is serviced by Central Maine Power, now a subsidiary of a Spanish conglomerate. This puts the citizens of eastern Kennebunk in the unusual and disadvantageous position of sharing liability for KLP without having access to its service, which they’ve actively sought for decades.  

To be fair to consumer-owned KLP and the shareholders of privately-owned CMP, if a price for the exchange cannot be successfully negotiated, a fair price will be determined by the Public Utilities Commission.  The town of Kennebunk, including the 80 plus percent not in the designated area, expressed its support by a vote of nearly 90 percent last fall. This bill has been a long time coming and Sen. Nancy Sullivan, Rep. Gary Connor and I have worked hard, as have Senate co-sponsors Phil Bartlett and Barry Hobbins, and we appreciate the bipartisan support of all York County legislators.

The challenges are many, but many able people, with good minds and honorable intentions, are dedicating themselves to find the most favorable outcome.  And, of course, interest groups, public and private, are striving to protect their interests.  Citizen input can be very helpful to elected officials, particularly in a citizen-legislature;  we want to hear your ideas.  You can contact me at babbidge@roadrunner.com or in Augusta at 287-1400 or repchris.babbidge@legislature.maine.gov, or you can contact my legislative colleagues on various committees by exploring the state Web site at maine.gov. or going directly to www.maine.gov/portal/government/edemocracy/lookupofficials.php.

style="margin: 0.0px 0.0px 0.0px 0.0px; text-align: justify; line-height: 10.0px; font: 9.0px New Century Schoolbook"> Chris Babbidge represents House District 141 in Kennebunk.