Biennial Budget Fiscal Years 2008 & 2009

1. Biennial BudgetFiscal Years 2008 & 2009 Promoting Sustainable Prosperity for the People of Maine

2. Just four years ago… • Economy in recession • Property valuations exploding • State’s reserves depleted to zero • $250 million line of credit • $1.2 billion structural gap = 20% of GF

3. Managing State Spending • Hold the line on broad-based taxes • Cap spending • Rebuild reserves • Shift the burden of local education

4. State workforce reduced by 600 positions since FY2002.

8. Source: Maine Revenue Services

9. FY 06 - 07 Total General Fund Appropriations $5,789.5Dollars in Millions

11. Over the past four years… • General Fund spending increased at some of the lowest rates in recent history. • Growth in the General Fund budget was almost entirely related to the increased state support for k-12 education. • If spending on Education were removed, remaining General Fund programs actually had negative growth in FY 06 and FY07. Growth across all of state government less k-12 education funding

13. FY 08 - 09 Total General Fund Appropriations State Aid to Local Education 32%

14. The Raw Numbers Maine: • 152 Superintendents • 290 central administrative units • 1800 school board members • 200,000 K-12 students • 750,000 property taxpayers

15. The Statistics • Maine has an administrator for every 393 students. • the national avg is 816 students/administrator • Maine has a central administrative unit for every 734 students. • the national avg is 3,177 students/adm unit • Maine is 34th nationally in per capita income • but 8th nationally in per student subsidy.

16. Local Schools, Regional Support Shifts resources from administration to the classroom to achieve excellence in education for all Maine students.

17. Local Schools, Regional Support • Keeps local schools local • Boosts classroom resources • Improves student outcomes • Consolidates administration • Reduces costs • Gains efficiencies

18. Local Schools, Regional Support • Reinvests statewide savings in students and their teachers to ensure all students are ready for: • College • Career • Citizenship

19. Local Schools, Regional Support • Consolidates 152 superintendents overseeing 290 central administrative units to 26 regional administrative units. • Reduces administrative costs from $348/student to $186. • Saving $241 million over 3 years.

20. Benefits ofLocal Schools, Regional Support • A full-time principal for every school • Expansion of laptop program Grades 7-12 • Increased teacher salaries • Professional development for teachers • Scholarships to encourage college access

21. 55% State Share of Local Education Provides $170 million in local savings for property tax relief

22. Local & Regional Efficiency Fund • Fully funded at $2.7 million per year. • Grant funds available for county and municipal consolidation efforts. • Special focus on downtown revitalization efforts.

23. FY 08 - 09 Total General Fund Appropriations MaineCare 21%

24. MaineCare Manage costs without sacrificing our compassion for the most vulnerable among us our elderly, our disabled and our children. No reductions in eligibility No reductions in scope of services

25. MaineCare • Implement managed care for behavioral health • Expand clinical management to all MaineCare adults • Establish standard rates consistent with the New England average

26. MaineCare Provide the right care at the right time in the right place

27. Investments in MaineCare • Provides for the rebasing of nursing home rates. • Provides a fee increase for physicians. • Addresses Governor’s commitment to pay off outstanding debt owed to hospitals.

28. Maine Facts on Tobacco Use • 2,400 die from tobacco use each year • 7 deaths per day • 1,700 kids take up smoking each year • Over one third will die prematurely • Raising the price lowers consumption • 10% increase lowers youth smoking by 6.5% • 10% increase lowers adult smoking by 4%

29. $1 Cigarette Tax Increase • Will lead to 16,400 fewer smokers in Maine. • Saves $238 million in lifetime health costs • $16,000 for every youth who doesn’t start • $8,500 for every adult who quits • $11.61 cigarette tax needed to pay for Maine’s annual smoking-related costs

30. $1 Cigarette Tax Increase • Raises $130 million over the biennium. • Accompanied by increased spending for smoking cessation programs through the Fund for a Healthy Maine: $8.5 million per year.

31. Builds on Current Efforts onAdministrative Consolidation • Enterprise-wide approach to managing: • Information technology • Human resources • Payroll • Accounting

32. New Department of Commerce • Merges Departments: • Economic & Community Development • Professional & Financial Regulation • Focus on business activity • Eliminates a cabinet level position

33. Atlantic Salmon Commission • Merges the Atlantic Salmon Commission into the Department of Marine Resources • Enhances efforts to manage and restore the Atlantic salmon and other diadromous fish. • Eliminates separate agency

34. Overall Administration Reductions • Reduces the number of cabinet level departments by one. • Reduces the number agency heads by two • Combines other offices and bureaus to create efficiencies and reduce costs. • Creates a net reduction of 57 positions.

35. Investment in Higher Education • $28 million investment in Higher Eds: • $14.4 million University System • $11.7 million Community Colleges • $2.1 million Maine Maritime Academy

36. Investment in R&D $5 million increase in Research & Development through the Maine Economic Improvement Fund University of Maine System

37. Investment in Innovation $ 8 million increase competitive grant program for Innovation Clusters through the Maine Technology Institute

38. FY08/09 Biennial Budget Plan: • Streamlines government • Reduces costs & creates efficiencies • Continues care for our most vulnerable citizens • Incentive funds for consolidation of county & municipal services • Provides $170 million for property tax relief • Invests in all levels of education to prepare our children to be the workforce of tomorrow • Invests in R&D and innovation to grow good-paying jobs for our future.