The 124th Legislative Session -- Impacts to the River Valley

Now that the 124th Legislative session has been adjourned for a couple of weeks, the dust is starting to settle and it seems a good time to take stock of what happened during the session and how the decisions made in Augusta may impact the River Valley. I’ve spent the last week reviewing the Legislative summaries and talking to leaders in government, business and social services in our communities to measure the outcomes from the work in Augusta in 2010. First, I want to thank all the people who took the time to talk with me about how the legislative session will likely impact our community.

Budget Concerns

Overall impressions are that the session was a difficult one -- but the results were better than anyone really expected based on the first projections of the state’s fiscal situation and the expected budget impacts. To put this in some context -- the supplemental budget passed for the fiscal year that will begin on July 1 of this year is roughly equivalent to the budget passed for the first year of the Baldacci administration -- eight years ago. Given the cumulative rate of inflation over those eight years -- this means that the new budget is a reduction of approximately 20% in real dollars over that period. Inflation in areas like energy and health care costs was higher than 20% over this period, and since a larger portion of the state budget is devoted to such areas, the overall reduction in real state spending may be greater than the 20% would indicate.

In short, we once again met the constitutional mandate to provide a balanced budget and we did that by making significant cuts to programs and restructuring other efforts. There were no broad based tax increases, nor were there any real “budget gimmicks” that would book significant one-time savings. As a result, the Legislature passed a strongly bi-partisan budget that was supported by all the members of the Appropriations Committee and large majorities in both the House and Senate.

We had some help in solving the problems in this budget cycle that may not be available next year, so everyone is already preparing for a difficult budget session next year. One of the biggest aids in resolving the budget shortfall was the infusion of additional federal dollars -- particularly in the area of health and human services that came from the American Recovery and Reinvestment Act of 2009 that provided stimulus funds in a number of areas. These funds filled some gaps, but they will not be available for the next budget cycle so additional cuts may have to be made if the economy continues to lag.

Many of the River Valley leaders I spoke with left the impression that we did about the best we could, having been dealt a bad hand. Financial impacts were kept to a minimum, but there will be some real changes as a result of this year’s budget.

First, state aid to education will be reduced to RSU 10 by approximately $1 million or a little more than 3%. While this is not as bad as was first projected since close to $350,000 was added back near the end of the session—this will still mean either cuts to the budget or an increase in local share, or both. School leaders have developed new budget proposals based on these changes, and we will all feel the impacts -- in the classrooms and in our tax bills.

The towns were similarly affected with reduction is Revenue Sharing. For example, Rumford will see Revenue Sharing drop from approximately $1.1 million to about $800,000, with the $315,000 needing to be made up through reduced services or increased revenues. Compared to the reductions for other municipalities, it could have been worse, but it is still a reduction in resources from the state to assist Rumford citizens.

The agencies that serve River Valley citizens in meeting their physical and mental health needs were very concerned at the start of this year’s session. Most already felt they did not have the resources to meet the needs of people in our community and the initial rounds of cuts would have eliminated so much support that many programs risked being discontinued entirely. A few services may well be curtailed in the River Valley, but in the short term both our institutional and community based services will remain intact. Providers are bracing for deeper cuts in the next session and are already working to find creative ways to do more with the diminishing resources. Having served on the Health and Human Services Committee in the last session, I was very engaged in these issues and I understand many of the challenges on the road ahead.

Jobs and Development

There were a number of initiatives that could have major impacts -- both positive and negative -- on jobs and economic growth in the River Valley. Fortunately most of the news in this area was positive. For example, one bill involving the use of bonded Canadian labor in wood harvesting could have had the impact of raising the overall cost of raw materials for the mill. The bill would have impacted the cost of timber throughout Maine’s wood-basket, potentially impacting the Mill, local loggers, and landowners. Fortunately, a compromise was reached that will mitigate most negative impacts.

Other similar issues, including those to balance the needs of workers and the needs of businesses were carefully considered as we work together to restore Maine’s economic health and vitality. Many of these issues come up almost every session, so we can expect that the dialogue will continue in future Legislatures. Finding a balance is always a key.

Energy and Windpower

At the end of the session, a bill was passed that enables local areas to have a greater say in the development of energy corridors. This can be an important opportunity for the River Valley since we live in an area with existing and emerging energy resources. Our gas fired generation facility, permitted and proposed wind energy facilities, our hydro resources, the potential for bio-mass co-generation, as well as our proximity to Hydro Quebec power resources all make the River Valley an energy gateway. This new energy corridor legislation may create opportunities for citizens and businesses to work together on initiatives to build new employment in our region.

Windpower continues to be an important topic, and initiatives will likely emerge in the upcoming Legislative session to continue to look at permitting and health issues related to the operation of these facilities. Although major legislative initiatives were not considered in the last session, they will certainly be on the agenda in the upcoming session, with the goal being an evidence-based approach to permitting new land based wind facilities to insure that they do not have unwarranted impacts on the health and safety of local citizens. These topics are sure to lead to lively discussion and exchanges -- and hopefully some sound policy judgments in Augusta.

Looking Back

Veteran legislators tell me it is a lot easier to serve when you can carry home good news to your community rather than bad news. This was not the year for funding new projects or new initiatives. This was a session to look carefully at expenditures and set priorities for our hard earned tax dollars. Next session promises to be more of the same -- maybe even tougher. I appreciate all the ideas and input from people in the River Valley -- before, during, and after the session. I want to keep up the conversation and if I am fortunate enough to return to represent you in the 125th Legislature, I will need that input even more. Thank you again for the opportunity of a lifetime to represent the River Valley in the Maine Legislature.