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Date: 03/03/11

Understanding the basics of the state budget

By Rep. Kathy Chase

As the Legislature takes up Governor LePage's $6.1 billion budget proposal, the State House has been packed by union members, teachers and other public sector employees concerned about changes to the pension system. Consequently, we are seeing much more media attention than usual being paid to the budget, and I've been asked by many constituents about the details of how the process works.

To clear up any mysteries and rumors about the budget, let me explain some of the basics so you will have a clearer understanding of what's happening in Augusta. As a member of the budget-writing Committee on Appropriations and Financial Affairs, I have a ringside seat as events unfold.

The State of Maine budgets its finances on a two-year financial plan known as the biennial budget. It is created by the governor, and for each of the two fiscal years it shows all proposed expenditures, interest, debt, redemption charges, capital expenditures and the estimated revenues to fund all of those expenditures and obligations.

Although it is referred to as "the governor's budget" and advances his program priorities and objectives, it is submitted to the Legislature the same as any other bill. (Obviously, it is far bigger than the others; this one runs 600 pages.) The governor cannot implement the budget by himself. It must navigate through the legislative committee process and then be passed by both the House and Senate - twice each - before it can be signed into law by the governor.

Despite all the hype, rhetoric, spin, outrage or delight you may currently read in the papers or see on the news about Governor LePage's budget, rest assured that by the time it goes through the full process and eventually becomes law, it will be a different document.

Why is that? Because there are two mandates that neither the governor nor the Legislature can avoid. The budget must balance and the budget must pass.

The governor presents the initial balanced budget based on his chosen priorities. Any changes, even the smallest, alter the balance.

For the Legislature, the budget process begins in the Appropriations and Financial Affairs Committee. This 13-member panel is responsible for review of the budget through a series of public hearings, followed by committee workshops. All of the Legislature's 15 policy committees - Marine Resources, Education, Transportation, etc. - appear before Appropriations with reports and concerns regarding their sections of the budget. Proposals for changes are negotiated, participation by legislators is encouraged and adjustments are made to keep the budget balanced.

This is an intense and lengthy process spanning more than six weeks (and usually involving some very late nights). It is the responsibility of the Appropriations Committee to deliver a fully vetted, reviewed and recreated budget. The committee itself votes on the final product, in what is usually a unanimous approval; after all, we have lived and breathed the budget for all that time. The committee then passes the document to the full Legislature.

There are two ways the budget can pass. A so-called "majority budget" - just a simple majority - occurs rarely and reluctantly. It happens only when the more desirable two-thirds majority appears impossible. Difficulties arise because all 186 legislators have their own ideas about what should or should not be in the budget and feelings can run hot. To take effect by July 1, when the new fiscal year begins, a majority budget must pass at least 90 days beforehand. For this particular budget, that would mean by the end of March - a tall order, indeed.

A two-thirds majority budget goes into effect immediately. It could pass on June 30 and go into operation the next day. This is clearly the preferred method, because it shows that the Legislature is more united behind the new spending blueprint.

Either way, it means that of the 186 legislators, at least 76 House members and 18 senators - plus the governor - must agree to the budget.

If you think putting together your household budget is a tedious and trying experience, I can assure you that it is child's play by comparison. But serving on the Appropriations Committee is a great honor for me and one of the best educations I have ever had. ###

State Rep. Kathy Chase (R-Wells), a third term legislators, serves on the Appropriations and Financial Affairs Committee