- Associated Press - Tuesday, February 11, 2014

AUGUSTA, Maine (AP) - The Maine Senate gave initial approval Tuesday to a bill that would prevent $40 million in cuts in state aid to cities and towns, while Republicans and Democrats continued to spar over the timing of the measure and how to pay for it.

Republicans implored their colleagues to wait on the revenue forecast at the end of February and stressed the financial dangers of dipping into the state’s rainy day fund to forestall automatic reductions in revenue sharing next fiscal year, which begins July 1.

But Democrats said many municipalities are planning their budgets now and have to know how much money to expect from the state.

“Communities need predictability and consistency just like businesses do,” said Sen. John Cleveland, a Democrat from Auburn. “They need to plan for the future.”

The bill, which now faces final votes in the House and Senate, would be partially financed by using $21 million of the rainy day fund, leaving that fund with about $38 million. It also would use $4 million from savings set aside for future income tax decreases and about $15 million in new revenue the state expects to see.

Several Republican lawmakers Tuesday tried to amend the bill in the House and later in the Senate, but Democrats shot down all the proposals. If the bill passes the Democratic-controlled Legislature, it then goes to Republican Gov. Paul LePage.

LePage spokeswoman Adrienne Bennett wouldn’t comment Tuesday on what action the governor would take on the measure, but said he would not sign off on any new bonds if the Legislature approves a bill that takes money from the rainy day fund. The administration says that using money from that fund would downgrade the state’s bond credit rating and hamper future borrowing.

“Democrats keep wanting to deplete that fund because they don’t want to make the tough choices,” Bennett said.

Sen. Pat Flood, a Republican from Winthrop and member of the budget-writing Appropriations Committee, urged lawmakers to wait until they get a monthly update from the Revenue Forecasting Committee so they could more accurately predict how much money to expect in the state’s coffers. He pointed to financial matters the state must address this fiscal year, including how to pay for a state-run psychiatric hospital that lost $20 million in federal funding last year.

“If we utilize much of our easily available funds now … for a year ‘15 issue without having enough funding to take care of our current and more urgent year ‘14 obligations that need to be cleared up before June, that need to be done before April, then we have seriously missed the mark.”


Follow Alanna Durkin on Twitter at https://www.twitter.com/aedurkin .

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