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UPDATE: Budget fix in limbo until Monday

By Paul Carrier Portland Press Herald Staff Writer March 28, 2008 05:35 PM

The Maine Senate has called it quits until Monday without taking a key vote on the proposed supplemental budget, leaving the package's fate up in the air until next week.

The state needs a supplemental budget to fill a $190 million hole in the $6.3 billion two-year budget that took effect July 1, 2007. If the Legislature fails to pass a budget by April 1, Gov. John Baldacci is prepared to make a new round of temporary spending cuts on his own, to keep the state in the black until the Legislature comes up with a permanent solution.

The Senate's decision came several hours after the House of Representatives voted 83-57 early this afternoon to hold firm on its version of the proposed state budget.

In doing so, the House rejected a series of changes that the Senate made Thursday night. The strong House vote, which came without debate, put the Senate on notice that the House would not cave in to the Senate's demands, and that forced the Senate to regroup.

By late this afternoon, Democratic leaders in the Senate were poised to have the Senate back down and go along with the House version of the budget. But Senate Republicans opposed that move and Democratic leaders decided they were one vote shy of getting their way.

"We saw no point in running (the budget) when we didn't have the votes" to succeed in abandoning the Senate's version of the budget, said Senate Majority Leader Elizabeth Mitchell, D-Vassalboro.

The Senate's decision to adjourn until Monday ended speculation that the Legislature might work into the weekend to try to resolve the budget impasse.

Both the Senate and the House versions of the supplemental budget would cut state payments to local schools, higher education and social services, but they differ on several key points, including the fate of a legislative watchdog agency that evaluates state programs.

The House version would shrink the staff of the Office of Program Evaluation and Government Accountability from seven to four people, while the Senate version of the budget would leave OPEGA's staff intact.

The Senate budget would require state legislators to pick up part of the cost of their state-funded health insurance, drop some childless adults from the Medicaid program, commission a study of the state's policy of insuring childless adults and eliminate 13 jobs in several state agencies and in the governor's office.

None of those items is in the House version of the budget.

Compounding the Legislature's problems, Baldacci opposes a plan in the House-backed budget to boost a tax on Maine hospitals. That would draw down enough federal Medicaid money to reimburse most of the hospitals for the added taxes and still leave money left over to block threatened cuts in payments to hospital-based physicians.

The fact that that tax remains in the House version of the budget "could draw his veto," said David Farmer, Baldacci's spokesman. So even getting the Senate and the House to agree on a budget will not solve the Legislature's problems if the budget still contains a hospital tax increase that is unacceptable to Baldacci.