Friday, February 21, 2014: Budget plans and broken promises

The Appropriations Committee met on Thursday and Friday, February 20 and 21, 2014 at the horseshoe.   Prior to meeting in mid-afternoon, the Appropriations Ds and Rs met in separate caucuses to develop plans to address the short-falls in the Biennial Budget.

 

The Appropriations Republicans had initially proposed three separate budget bills – one for Revenue Sharing, a second one to address the FY 2014 budget shortfall, and a third one to address the FY 2015 Budget shortfall.   Appropriations Ds proposed one bill for FY 2014 and FY 2015.

 

Late in the day on February 20, Appropriations Republicans stated that their caucuses agreed only to address the FY 2014 Budget shortfall.   Now, it has been agreed that the line item budget developed by OFPR will be developed into two  budget bills – one for FY 2014 for a hearing to be held on one day, followed by another hearing the following day for FY 2015.

 

Both Appropriations Caucuses have developed items that require funding and possible funding sources for FY 2014.   The FY 2014 budget will range between $52 million and $54 million. These proposals will be merged to cover proposed projects and needs.    The Democratic Committee members have also developed funding sources for both fiscal years.   The Republican Appropriations members have indicated that they too will be working on funding sources for FY 2015 over the next few days.     The Committee also discussed and generally agreed on a schedule by which both budget bills would be on the floor of the Legislature by the end of March.

 

The Appropriations Committee also heard on February 20, 2014 from the State Treasurer, Neria Douglas and the Deputy Treasurer, Kristy Carlow, that the Governor via email stated “I will not approve going to market until there is $60 million in the Rainy Day Fund”.   The Treasurer’s Office received the email on February 19, 2014.   

 

The Treasurer, as is the custom, borrowed $51.3 million from the Cash Pool to enable the agencies to prepare to implement their projects, including preparation of RFPs and contracts.   For example, in order for Transportation to undertake transportation projects in the summer of 2014, the Department needs the funds by early July.   Bonds are traditionally issued in June, and the Cash Pool repaid with bond revenues.   This repayment measure, however, is in a hiatus as a result of the Governor’s email and stopping the bonds from going to market..  

 

This issue will be addressed in the coming weeks.

Schedule

Next week the committee will continue its efforts to address the Governor’s shortfalls. The full schedule is available here: http://www.maine.gov/legis/ofpr/appropriations_committee/schedule_agendas/index.htm

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