State Budget Update
The Governor Orders Spending Cuts
and Releases His Supplemental Budget
Budget Curtailment
On December 18th, 2007, the Governor used his “curtailment” authority to order spending cuts of nearly
$38 million from the state’s General Fund. The Governor’s curtailment authority lets him make certain
budget cuts without the approval of the legislature when they are needed to balance the budget. Nearly
$14 million of the cuts come out of the Department of Health and Human Services. Seniors, people with
serious disabilities, children, victims of domestic violence and childless adults living in poverty are
some of the people who are hardest hit by these cuts.
The state faces a $95 million deficit over the next year and half. About $38 million is needed to fill
the gap in this fiscal year, which ends on June 30, 2008. The Governor’s cuts went into effect on the day
that he issued the order in December. They will remain in effect until the legislature passes a
supplemental budget. The Governor argued that he needed to make the cuts now because if he waited until a
supplemental budget passed, he and the legislature would have to make deeper cuts to balance the budget
before the end of the fiscal year. By making cuts now he said that he could spread them over six months.
A coalition, including MEJP and MAIN, formed to voice opposition to these cuts. We believe that the
Governor had other options than making these cuts to vital health and human services. Many of the cuts
will prove to be pennywise and pound foolish. While there may be savings from the cuts in the short run,
most will result in larger costs in the long run. These costs will be spread throughout the state budget
and to all others in the state.
Over 200 people gathered at the State House on the night of the Governor’s state of the state address
on January 9th to protest these cuts and bring awareness to the harm they will have on people in need.
Proposed Supplemental Budget
The Governor’s Supplemental Budget was released on January 11th. It includes a continuation of many
of the cuts in the curtailment order, along with new cuts to programs for low-income Mainers.
During these already difficult economic times, these cuts will make it harder for many Mainers to
maintain their health, pay for the fuel needed to warm their homes and make ends meet. Below is a
short list of a few of the proposed cuts in the supplemental budget.
The Supplemental budget includes these harmful proposals:
- Families receiving TANF would be ineligible for General Assistance. This means that families on TANF
who face an emergency, such as running out of heating fuel, will no longer be able to turn to their local
General Assistance program for help.
- The freeze in enrollment in MaineCare’s noncategorical program that began in the budget curtailment
would continue. (More details below)
- People in the noncatagorical MaineCare program would have new co-pays of $10 for physician and hospital
services. Those who remain on this program will now have to pay co-pays for these basic services.
They will have a harder time getting needed services.
- Eliminate SSI benefits for legal immigrants who have been in this country for five years or less.
This means that legal immigrants who are unable to work due to disability or age will lose the monthly
benefit they receive from the state. This is often the only income that the family has.
We need to help the legislature understand how these cuts will hurt Mainers with low income who are
already struggling to make ends meet.
Important Improvements to TANF in Supplemental Budget
The Supplemental Budget includes two improvements to the TANF program. The state does NOT need
additional money for these improvements because it has some carry over money from the federal TANF block
grant from previous years. Under federal law, these carry over dollars may only be used to pay for
“assistance” to TANF families like the kind proposed in the Governor’s budget.
Increase in Housing Special Need Payment
The Supplemental Budget increases the Housing Special Need (HSN) payment from $50 per month to $100 per
month. Families who pay more than 75% of their income for housing qualify for the monthly HSN payment.
The current payment is the same amount as it was when the program was created in 1992, sixteen years ago.
About one-quarter of Maine’s TANF families receive the HSN benefit. Maine’s overall TANF benefit is still
the lowest in New England and has not been increased since 2001. This proposed increase to the Housing
Special Need payment recognizes that too many TANF families are struggling to pay for the high cost of
housing. It is a small but important step in helping improve the economic security of these families.
Extra Support for TANF Families Returning to Work
The Supplemental Budget proposes a workers’ supplement program that will provide additional food
assistance to families transitioning from TANF to work. Working families who leave TANF will receive a
monthly stipend of $100 per month during their first year off of TANF. In their second year off the
program, they will receive $75 per month. And, in the third year, they will get $50 per month. The
dollar value will be placed on the family’s EBT card. Like the food stamp program, the assistance can be
used to purchase food. The workers’ supplement is being provided as food assistance to ensure that the
benefit does not affect the amount of Food Stamps that families get.
Studies indicate that this type of assistance for families leaving TANF improves their earnings and
employment. In addition, this benefit will actually help the state save money. The workers’ supplement
will help the state meet its federal work participation rate requirement. This means that the state can
avoid monetary penalties from the federal government. If imposed, these penalties could cost the state
more than the amount paid to families under this new program.
The Special Housing Need payment and the workers’ supplement are important and needed improvements to
the TANF program. They do not take the place of the safety-net assistance that the General Assistance
program provides, however. These families are still living on very low incomes. Many will still face
emergencies for which they will need immediate help. For that reason, MEJP and MAIN support the increases
in the HSN payment and the new worker’s supplement program while strongly opposing the cut to General
Assistance.
Governor Freezes Enrollment in Noncategorical Program
The Governor’s Curtailment Order froze enrollment in the noncategorical program. The noncategorical
program provides MaineCare coverage for non-disabled adults between the ages of 21 and 64 with no minor
children at home.
Prior to the freeze, enrollment in the program had been capped at 19,800 people. As people left the
program, people on the waiting list were able to join. With the freeze, people on the waiting list will
not be able to get onto the program. Program enrollment will drop steadily each month. We expect an
average of 1,100 people to fall off the program each month, with over 6,700 people losing access to health
care by the end of June.
The Governor’s supplemental budget continues this freeze. It is unclear in this proposal how far it will
last into the next fiscal year that begins July 1, 2008.
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