Closing the Budget

By State Senator Bill Diamond

The Maine Legislature is heading into the last few weeks of this year’s session and much remains to be done. Chief among this unfinished business is the completion of a balanced budget for the next two years.

The Appropriations Committee has been working on this for months, and, in terms of dollars, they are about 80% done. What is left, though, are the most contentious portions of the budget and reaching agreement in these areas will be difficult.

Probably the most controversial unfinished business centers around changes to the Maine State Retirement System, which serves as a substitute for Social Security for Maine’s teachers and state employees. The system is burdened by an “unfunded actuarial liability.” In plain English, this is the amount of money the retirement system would be short if everyone in the system now stays in the system until they retire, retires and then lives to their expected life expectancy. Maine is constitutionally required to pay off this unfunded liability by the year 2028, and to meet this goal payments in the next budget would be over $900 million if nothing changes.

To lower this cost, the governor proposed several changes to the retirement system in his budget. These changes would raise the retirement age, freeze pensions for current retirees for three years, lower the maximum cost of living increase from 4% to 2% after the freeze is lifted and increase the amount employees pay into the system by 2%. If all these cuts were made it would lower the state’s required payments by about $400 million over the next two years.

The other major area of controversy concerns cuts in the Health and Human Services Department. These cuts include making changes to the state’s MaineCare program, which is the combined state and federal program that provides health care to Maine’s lowest income individuals and families. These changes will remove well over 50,000 people from the program, many of them elderly and disabled. Additionally, the proposed budget calls for the elimination of the Drugs for the Elderly Program and has major cuts in substance abuse services, child services and cuts $50 million from the Fund for a Healthy Maine.

While I am well aware of our budget problems, I also feel that we have obligations as well. Consequently, I have some serious concerns about both of these issues, especially if they were to pass into the budget unchanged. I’ll be talking both of these matters over with my colleagues, and helping them come up with solutions that can work. This will be a difficult budget process, and there will be a need for everyone to work together to make the necessary cuts.

Your input into this process is very important to me, so please visit my website at www.mainesenate.org/diamond to send me an e-mail or call my office at 287-1515.

Senator Bill Diamond is a resident of Windham, and serves the District 12 communities of Casco, Frye Island, Raymond, Standish, Windham and Hollis.

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