🔒Capitol Update | Kick the can

Fed budget battle looms

Delegation laments inaction

Agreement details still unknown

Returning lawmakers in Congress are questioning whether to continue federal government spending at slightly higher than current levels for the next six months, or pass regular appropriations bills for the budget year. Members of Maine's congressional delegation do not like the idea of putting off tough decisions until after the election.

“An agreement to essentially kick the can down the road and delay consideration of budget issues is irresponsible,” said U.S. Sen. Susan Collins. “It is not going to make the issues any easier to deal with.”

A member of the Senate Appropriations Committee, Collins said the panel has completed work on 12 of the 13 appropriations bills and none have been brought to the floor for consideration even though several were approved months ago.

The agreement sets agency spending for the budget year that starts Oct. 1 at $1.047 trillion, the amount agreed to in last summer's debt reduction deal. It is slightly above this year's level of $1.043 trillion. But the details of the agreement have not been released, which worries all of the delegation.

“Because we have failed to learn from the consequences of our serial abdication of our most fundamental responsibilities in the past,” said U.S. Sen. Olympia Snowe, “we are faced with yet another temporary spending measure in the coming weeks.”

She agreed with Collins that it is “unconscionable” that none of the budget bills have been considered in the Senate. She is worried lawmakers will have little time to consider its impacts when the spending resolution is finally considered.

U.S. Rep. Chellie Pingree said while the agreement does not solve the many long-term budget issues, she said it does prevent the “brinksmanship” where failure to pass a budget has led to the shutdown of many parts of the federal government in past years.

“This has been a Congress that has had a difficult time coming to any resolution on tough issues,” said Pingree.

She said it would be better to adopt the regular budget bills, and hopes that some of the budget issues could be addressed in the lame duck session after the new Congress is elected, but before they take office in January.

The six-month spending bill will not address the many other fiscal issues facing Congress, like the expiring tax breaks and reducing the federal budget deficit. Delegation members expect they will be considered in the lame duck session.

U.S. Rep. Mike Michaud agreed. But, he blamed the Senate for the lack of action on budget bills. He said the House has passed seven bills, while the Senate has not approved one.

“The continuing resolution is not good for the agencies, it is not good for state governments, it is not good for trying to save money,” he said.

Michaud said he is so frustrated with leadership of both parties that he supports setting term limits on leaders and committee chairs and has joined a lawsuit brought by other members of Congress seeking to find the senate filibuster rules unconstitutional.

Public safety agencies face steep cuts

Fed cuts imperil training

Police, first responders alarmed

Law enforcement agencies and first responders across the state are bracing for what they expect will be significant cuts in federal grants, a fear members of the state's congressional delegation say is warranted.

“What we are hearing is that most of the federal grants will be cut by up to 40%,” said Col. Robert Williams, chief of the Maine State Police. “That is absolutely devastating and not just to state entities but to local communities as well.”

He said grants ranging from speed enforcement to Maine Emergency Management Agency allocations for equipment and training of first responders are on the chopping block.

“The states, and not just Maine, are going potentially be in the same place they were pre-9/11,” Williams said.

Caribou Police Chief Mike Gahagan, president of the Maine Chiefs of Police Association, said the expected cuts will reduce the ability of agencies to focus on problem areas, citing grants for speed enforcement and drunk- driving patrols that have allowed police to focus the additional resources without reducing other enforcement activities. He said since the 9/11 attacks, more training has been recommended or required by federal agencies around activities like dealing with suspected terrorist activity and hazardous chemical spills.

“Both the state and federal governments want local law enforcement to do more as part of homeland security,” said Penobscot County Sheriff Glenn Ross, president of the Maine Sheriffs Association. “If they cut the grants, we have no money to pay for that.”

A reduction in funding by the federal government will not be picked up by most sheriffs and local police because there are no extra funds available, Ross said.

U.S. Sen. Susan Collins serves on the Senate Appropriations Committee and says the possibility of large cuts in the various public safety programs is very real.

“Unfortunately, their fears are absolutely warranted,” she said. “The current law would allow these cuts to go into effect, so they are going to go into effect unless the Congress and the president act to block them.”

New liquor contract eyed

Potential for more state revenues

Current contract expires in 2014

Maine's contract with the Maine Beverage Co. to run the wholesale distribution and sale of liquor in the state runs out in 2014 and state officials are developing a new contract instead of simply renewing the existing agreement.

Under Liquor and Lottery Bureau Director Gerry Reid's plan, the state would increase its share of the liquor sales contract with a private, statewide distributor by about $41 million a year. The move would allow Maine to lower prices and regain some of the sales that have been lost to New Hampshire, which he estimates to be conservatively $20 million a year.“I'd like to adjust our retail prices down,” he said. “Our retail prices in Maine are very high. ... It ranges from $2 to $7 a bottle, compared to New Hampshire.” Reid also wants to use some of the additional revenue to pay higher commissions to state agency stores and advertise the lower prices. He told lawmakers on the Veterans and Legal Affairs Committee, which has jurisdiction over liquor issues, that he has analyzed the operations budget of Maine Beverage. He said it makes about $36 million a year in profit, after paying about $7 million a year in actual operating costs. That was a surprising number for longtime committee member Sen. John Patrick, D-Rumford. He opposed the contract in 2003 arguing the state did not maximize its revenue. “I really think the initial Baldacci contract that was signed was short-changing the state of Maine,” Patrick said. Maine is one of 18 states that control the sale of liquor. Local stores can sell liquor in the state, but must buy from the state-controlled monopoly wholesaler.

Finance Commissioner Sawin Millett told members of the Appropriations Committee that several companies have expressed interest in the contract.

Columnist Mal Leary can be contacted at editorial@mainebiz.biz.