Baldacci signs historic budget
Gov. John Baldacci yesterday signed the state's $5.8 billion two-year budget, marking the first time since the 1970s lawmakers have passed a budget smaller than its predecessor.
The biennial budget reduces spending from the last two-year budget by $500 million, from $6.3 billion to $5.8 billion. It had strong bipartisan support, passing in the Senate with 33 of 35 votes and in the House with 119 of 151 votes. "Today's circumstances place demands on the Legislature that we haven't seen in generations," Baldacci said in a statement. "Instead of giving into the path that has lured many of our colleagues in other states to gridlock and stalemate, Democrats and Republicans - conservatives and liberals, and folks in the middle - came together to pass a state budget that is fair, reasonable and responsible."
Major provisions of the budget include:
• $1 billion in 2010 (up from $983 million in 2009) and $947 million in 2011 for K-12 education. This maintains funding levels in 2010 and gives school districts time to plan for reduced state aid in 2011
• $26.5 million for debt service that allows for investments in transportation, conservation, research and development and more through a multi-year bond package
• $1.6 billion for the Department of Health and Human Services
• Reduces Medicaid spending for high-cost specialty drugs by purchasing them through preferred providers, reducing the cost of prescription drugs while continuing to give patients access to life saving medicines
• $96.7 million in state funds and $276.3 million in federal funds (total $373 million) payment to Maine hospitals to settle disputed payments
• Changes the MaineCare reimbursement rate to Critical Access Hospitals from 117% to 109% of cost
• Increases MaineCare reimbursement rates to private physicians from 53% of Medicare to 70% of Medicare
• Approximately $270 million for property tax relief through municipal revenue sharing, the Homestead, BETR, Tree Growth and Circuit Breaker programs
• The following changes to the above mentioned property tax relief programs result in a savings to the state of $24.3 million: a 5% reduction to the Tree Growth Program, a reduction to Revenue Sharing, a 20% across the board cut to the Circuit Breaker, and a reduction of the Homestead Exemption to $10,000 in FY 2011, leaving it as-is in FY 2010
• A two-year savings of $16 million through suspension of the Net Operating Loss Carry Forward
• 10 state government shutdown days in both 2010 and 2011 and a provision that requires state employees to pay a portion of their health insurance commensurate with their salary. Employees can earn back a portion of their premium by successfully participating in a state wellness program
• $30 million in savings from a commission on streamlining government
• $55 million in funding for the Legislative Branch, a reduction of $4.3 million
• $138 million for the Judicial Branch to operate the Courts
• $77 million in revenue bonds to consolidate and modernize court houses in Piscataquis, Kennebec and Washington Counties (debt service is $700,000 for the biennium)
• $535 million for Maine's colleges and universities, a two year cut totaling $6 million
• A partial freeze in the indexing of individual income tax brackets, resulting in $13.9 million in saving
• Stepped up enforcement of state tax collection will result in $14.6 in additional revenue over the biennium
• Makes use of $116 million from the state's Rainy Day Fund and the Working Capital Reserve Fund
• Transfers $2.2 million from the state's Clean Election Fund and reduces the initial disbursement to candidates by 5%
• Increases fees for licenses and permits at the Departments of Inland Fisheries and Wild Life and Marine Resources
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