🔒Maine’s finance commissioner Sawin Millett expects tough choices ahead

Anyone trying to balance the state budget ought to feel sea sick. States revenues were down in July, up in August, and then $12.6 million below estimates in October. A month later, they were $2.5 million above projections. But as we head into 2012, we're $120 million in the red.

It doesn't appear the situation will smooth out in the weeks to come. Sawin Millett, a longtime legislator and now Maine's governor-appointed finance commissioner, talked with Mainebiz recently about the budgetary challenges facing Maine's policymakers as they reconvene in Augusta.

Millett identified several issues that will impact Maine's budget in the coming year, including the governor's mandate to cut $25 million from the general fund. An edited transcript of the conversation follows.

Mainebiz: What are the immediate challenges?

Sawin Millett: We have [two] ticking time bombs … one is a shortfall in the Department of Health and Human Services, which we opted to address with a supplemental budget. There is total shortfall over the biennium [the state's two-year budget] for DHHS alone of $221 million.

The other … abnormal issue in flux is what's going on in Washington with the failure of the Super Committee to come up with a plan that addressed the long-term debt-ceiling issue with program reductions on both domestic and military budgets. So we're somewhat in the dark now pending what Congress does when it comes back. It may very well impact our general fund budget for probably the second year of the biennium more than the first, but that's the uncertainty we're looking at.

To address the DHHS shortfall, Gov. LePage has proposed cutting Medicaid. How do you think this will play out?

We actually have to make some serious changes in order to live within our means. ... Shortfalls have to be addressed, and it's going be very difficult to get them back into balance between now and probably the end of January [when the supplemental budget will likely be voted on].

The challenges thereafter become more structural and long term in terms of whether we are a pacemaker for states going beyond the minimum mandates of the federal government in terms of Medicaid and the new, pending Affordable Health Care Act. The governor's approach is to try to be in the middle of the pack rather than a pace setter, which Maine has kind of been in recent years, adopting many of the optional programs and establishing new programs like the childless adult waiver, which serves upwards of 20,000 people who would not be eligible for Medicaid.

How do you think the DHHS shortfall should be addressed?

I don't think anyone wants to move forward without ensuring there's an appropriate safety net with quality services for the elderly, the disabled and children … and that's where the real challenge for putting partisan rhetoric aside [comes in] and looking at what can we do that gets us back into balance and puts us into a more sustainable long-term program. [That involves] some difficult priority setting, which has not been done in recent years. … I think the LePage administration wants to take a longer view and set some real priorities and look at what we can afford, as well as preserving an appropriate safety net.

I am, as a former legislator, confident we can arrive at solutions that, while they may be different from what we proposed initially … achieve the real savings and rebalancing that must happen. n