Bracing for the Budget Crisis

Last week, Governor Baldacci unveiled his proposed curtailment package to reduce budget expenditures in the current fiscal year in light of lowered revenue projections. At the time, he indicated that this is the first phase of an estimated $400 million in budget reductions in the current fiscal year. As expected, these initial curtailments fell most heavily on human services programs and state aid to education.

This morning, DHHS Commissioner Brenda Harvey, while addressing a work group on long term care, provided the first insights into the likely shape of these future cuts. While present curtailments have targeted state funding and excluded Medicaid funded programs that are matched by the federal government, the next round of cuts for the Department will apparently include deep cuts in current Medicaid funded programs. Commissioner Harvey indicated that cuts to state funded programs will be much deeper, but that she expects that the cuts to Medicaid programs will be $100 million meaning a reduction of these services by approximately $400 million when the federal match of approximately $3 federal to every $1 of state money is considered.

Obviously, removing $400 million dollars from current Medicaid services will have a devastating impact on many citizens and families -- including those who receive the services as well as those employed to deliver these services. I am committed to working with the agencies and providers of the River Valley to fully understand the impact that such cuts may have on the quality of services, the quality of life, and essential employment in our communities. As specific proposals are unveiled in the Governor’s supplemental budget, probably at some time soon after the first of the year, I want to hear from you about the impacts of any proposed cuts and work with you to identify alternatives that may blunt the worst impacts of any proposed cuts.

Colleagues with many years of service in the legislature have indicated that it is much more rewarding to serve in times when the economy is strong and the budget is more easily balanced. I am sure that is true -- but we are now in a very different time, and I am committed to working with you as creatively as possible to find ways to minimize the impacts of these cuts on essential services to our most vulnerable neighbors. Let’s keep in close touch as this situation unfolds. Good information and communication will help me do the best I possibly can on behalf of you and our fellow citizens in the River Valley.

Matt