© 2024 Maine Public | Registered 501(c)(3) EIN: 22-3171529
Play Live Radio
Next Up:
0:00
0:00
0:00 0:00
Available On Air Stations
Scroll down to see all available streams.

LePage to Propose Reforming Maine's Budget Process

AUGUSTA, Maine - For years, Maine lawmakers have funded projects - and, in some cases, programs - by using expected surplus funds. It's a practice known as the "funding cascade."

But Gov. Paul LePage is not a fan. The governor says he will propose ending it in the two-year budget cycle that begins next month.

Most of the state surplus is what it sounds like - revenues in excess of estimates. But it also includes money appropriated, but not spent, by state agencies. Gov. LePage says he does not like the process of spending it before it's actually realized, and this year he plans to do something about it.

"The Legislature always puts a cascade at the end of every budget, so no matter how much you save they spend it before you can put it in the bank," LePage says. "So I am trying to eliminate that this biennium."

LePage says Maine’s economic growth depends on attracting businesses that will invest in the state. He says the states that are booming have better credit ratings, and he says that is a significant factor for many companies about where to invest.

"In order to really fix our credit rating, and to get it back to triple, triple-A, which is - really. if we don’t see that as a goal, we don’t understand economic development," LePage says.

LePage says he wants to get the state’s budget reserves - often called  the Rainy Day Fund, up to $300 million as part of the effort to convince credit rating firms that Maine deserves the highest credit rating.  Reserves are now less than a third of that amount. The governor also says a better credit rating will lower the cost of borrowing for needed infrastructure projects.  

Republican Senate President Mike Thibodeau of Winterport thinks it’s a good idea worth exploring. "I understand the governor's frustration with it. Let’s create a budget, let’s know what we can afford," Thibodeau says. "I think that would be an admirable goal to get rid of the cascade - let’s be honest about our budgeting process."

Lewiston Democratic Rep. Peggy Rotundo is the co-chair of the budget-writing Appropriations Committee, and has served on the panel for a decade. She defends the use of the cascade process to fund state programs.

"The cascade has always been an opportunity for us to fund things that we couldn’t fund in the budget but were important to the people of Maine," Rotundo says. But, that said, Rotundo is willing to look at what the governor proposes as part of his budget.

"We’re ready to work with the governor and the Republicans on any policy that will grow our economy and jobs, and that also protects Maine families, students and seniors and protects our natural resources."

The governor says his budget will spell out his proposal to make sure nearly all surplus funds go into reserves against future budget problems.  He has to submit his two-year state budget just after his second inaugural on Jan. 7.
 

Journalist Mal Leary spearheads Maine Public's news coverage of politics and government and is based at the State House.