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Governor considers immediate curtailment of state spending by $35 million

Governor LePage will assess options in a thoughtful and meaningful manner

AUGUSTA – Governor Paul R. LePage has received notification from Department of Administrative and Financial Services Commissioner Sawin Millett to immediately reduce State government spending by $35 million. Governor LePage is currently reviewing the recommendation, which came Monday afternoon.

The recommendation came on the same day the Revenue Forecasting Committee (RFC) formally submitted its December 2012 Report. The report indicates that State expenditures exceed anticipated income and other available funds in fiscal year 2013 by $35,452,373.

Whenever it appears to the Commissioner of Administrative and Financial Services that the anticipated income and other available funds of the State will not be sufficient to meet the expenditures authorized by the Legislature, the commissioner is required by law to report in writing to the Governor, and send a copy of the report to the President of the Senate and the Speaker of the House and the majority and minority leaders of the Senate and House. Commissioner Millett notified the Governor and all leaders of the Legislature simultaneously Monday.

“In the interest of attaining budget balance, it is important that we begin to curtail allotments as soon as possible,” wrote Commissioner Millett. “I am therefore recommending you curtail $35,452,373 in FY13 General Fund allotments.”

Now that the Governor has received the report, he may make a decision to temporarily curtail allotments equitably so that expenditures will not exceed the anticipated income and other available funds. A decision has not yet been made to temporarily curtail spending.

“The State of Maine is facing its own ‘fiscal cliff’,” Governor LePage said. “Action must be taken to achieve a balanced budget, which the Constitution requires. I have begun to assess the options regarding the best approach to reduce spending, and I will do so in a thoughtful and meaningful way,” the Governor added.

As a way to reduce spending immediately, previous Maine governors have utilized the curtailment process. Recent curtailments under the Baldacci Administration totaled more than $180 million between the years 2008-2010.

If a curtailment is issued, the Governor is required by law to immediately, upon the curtailment of any allotment, notify the President of the Senate and the Speaker of the House and the majority and minority leaders of the Senate and House of the specific allotments curtailed, the extent of curtailment of each allotment and the effect of each curtailment on the objects and purposes of the program affected.

*Please note: The body of the RFC’s December 2012 report and Appendices A through D have been posted to the RFC’s web page and available through the link below.

http://www.maine.gov/legis/ofpr/revenue_forecasting_committee/current/index.htm.

The full report with all appendices will be posted to that web page when compiled and sent to the printer. A limited number of copies of the full report will be available in the Office of Fiscal and Program Review, Room 226 of the State House, when they return from the printer.

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