March 22, 2013- State and Local Government

The Appropriations Committee, in conjunction with the Committee on State and Local Government, met today to review the Governor’s Budget proposals regarding:

Morning Session

The Department of Audit,

  • The Governor’s Office and operations, including communications and the Blaine House,
  • The Office of Policy and Management,
  • The Municipal Bond Bank,
  • The Secretary of State Department – Archives and Elections Bureau,
  • The Office of the Treasurer

Afternoon Session

The Department of Administrative and Financial Services and its sub-units and programs.

 Major Issues

 Office of Policy and Management [OPM].    The Office of Policy and Management which has replaced the former State Planning Office, is required to identify $10 million of savings to be achieved administratively in FY 2014, and $20 million in 2015 to be achieved administratively or by program eliminations – using zero-based budgeting [Part F].   With respect to FY 2014, the $10 million of savings would not be approved by the Legislature.

Part S which, in part, repeals the provision that requires notification and reporting of new federal mandates,

 Part BBB, which repeals a provision of state law that prohibits the state from charging a rental fee for vending facilities in state-owned facilities that are operated by blind persons,

One-Day borrowing.   Part KKK provides for a transfer of $70,450,000 from “Other Special Revenues” to the General Fund Unappropriated Surplus on June 30, 2014.   On July 1, 2014, $70,450,000 must be transferred from the General Fund Unappropriated Surplus to “Other Special Revenues.”

Statewide Radio Network.   This has been highly controversial.   A $47.1 million contract with the Harris Network to create a statewide radio network is now 5 years old, but the radio system is not currently active.   The issue relates to interoperability.   The State Police will be using a trunked, digital radio system, while county, local, and tribal emergency responders will use VHF analogue radios.   The issue is whether county, local, and tribal emergency responders will at the same time, hear the signal that alerts the State Police of an emergency.   In addition, the question is raised whether county and local responders can communicate with State emergency responders in a timely manner.   In other words, will local and county emergency responders hear only what the State Police want them to hear compared to the current system when county and local responders hear all emergencies?

 Increased Attrition Rate.   The budget increases the attrition rate of state employees from 5% to 6%, which is used to budget for state employee wages and salaries.   There has been a significant increase in state employee retirements over the last 2 years, which has increased the attrition rate.   There is a question as to whether the attrition rate will remain the same over the next two years.   If it is less than 6%, the savings attributed to a 6% rate will be much less.

Identification of 100 positions, both vacant and filled to be eliminated.   The Bureau of the Budget and the Office of Policy and Management are required to identify 100 positions for elimination, whether elimination of positions is feasible or not.

Legal representation by the Governor without approval of the Attorney General.    The Budget requires a $300,000 transfer of funds each year of the Biennium from the Attorney General’s budget to the Governor’s legal Fund in cases in which the Attorney-General refuses to represent the Governor or State.    The Attorney-General is the chief legal counsel for the State, and current law prohibits the Governor or anyone else from representing the State in a legal matter without the approval of the Attorney General.    The Attorney-General reserves the right to determine whether an issue rises to the level of legal action, but the budget violates this provision of current law.

Statewide Savings – Executive Branch and Independent Agencies.   The Budget provides for cuts and savings across state agencies as follows:

Reductions 03222013

The savings incurred at the expense of active and retired state employees are significant.   State employees have had no merit increases, COLAs, or increased state funding for health insurance for 3 years.   The budget continues this policy – A freeze on merit pay, longevity pay, and health insurance funding – for an additional 2 years.

State and Local Government (SLG)

Portions of the Governor’s budget in the purview of the SLG committee may be found here: State and Local Government (SLG)

Office of the State Auditor

State Auditor Pola Buckley presented testimony in support of the items in the Governor’s budget related to the Office of the State Auditor.

Executive Department

Deputy Chief of Staff to the Governor, Kathleen Newman and the Governor’s Legal Counsel, Michael Cainchette presented testimony outlining the Governor’s proposals related to the Executive department.  The committees raised concerns over the legality of the Governor’s plan to withhold $300,000 from the Office of the Attorney General.  Cianchette responded to questions about those concerns and is pledged to continue conversations and provide written confirmation of the Governor’s authority to take this step.

Office of Policy and Management (OPM)

Director Richard Rosen presented testimony in support of the initiatives relative to the Governor’s Office of Policy and Management.  Committee’s expressed concern over the large mandate of the office as well as the scope of its charge to find $30M in savings over the next two years.

Secretary of State- Archives

Secretary of State Dunlap presented testimony regarding the State Archives.  Dunlap also detailed over $1M in requested initiatives not included in the budget by the Governor.  The initiatives seek to better secure, store and make available to the public, government records that tell the story of our state.

Office of the Treasurer

State Treasurer Neria Douglass presented her testimony regarding the administration of the Office of the Treasurer.

In the afternoon both committees returned to hear testimony on initiatives impacting state employees, state facilities and proposed one-day borrowing.

Department of Administrative and Financial Services (DAFS)

Commissioner Millett returned to present testimony detailing the Governor’s proposals impacting state employees.

Members of the public and state employees presented extensive testimony in opposition to the Governor’s proposals to further increase the employee share of health insurance and to withhold merit and longevity pay from state employees for another 2 years.

Testimony of Ginete Rivard, MSEA- March 22, 2013

Testimony of Garrett Martin, MCEP- March 22, 2013

Sampling of Public Testimony Part 1- March 22, 2013

Commissioner Millett testified for the rest of the afternoon on the remaining items within the jurisdiction of the SLG committee including: the attrition rate, state vehicles, state facilities, the Statewide Radio Network, the Governor’s proposal to eliminate 100 further positions throughout state government and one-day borrowing.

Schedule

Monday, March 25th at 3:00 PM AFA will meet offsite in Brewer to hear testimony of those initiatives in LR 1046 affecting municipalities including but not limited to: Business Equipment Tax Reimbursement (BETR) Program and Business Equipment Tax Exemption (BETE) Program; Maine Residents Property Tax Refund (Circuitbreaker), Homestead Exemption for Maine Residents, Excise Tax; State-municipal Revenue Sharing; and Language and Initiatives related to General Purpose Aid for Local Schools.

Tuesday, March 26 at 1:00 PM the Appropriations committee will return to Room 228 in the State House to conduct a public hearing on items in its purview including:

  • ·         Legislature
  • ·         Retirement
  • ·         General Fund Bond debt service

The full schedule may be found here.

Audio

Please feel free to join the committee as they do their work. You may also listen online using the following link: http://www.maine.gov/legis/ofpr/appropriations_committee/audio/index.htm

Thank you and please let me know if you have questions.

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