Pending Budget Curtailment Order

INFORMATIONAL LETTER: 38
POLICY CODE: DB

TO: Superintendents of Schools
FROM: Susan A. Gendron
DATE: November 10, 2008
SUBJECT: Pending Budget Curtailment Order

The latest projections for the current fiscal year indicate that state revenues will be $110 to $150 million below expectations. There is a strong possibility revenues will drop even further before the fiscal year ends June 30, 2009. In response, Governor Baldacci has charged each state agency with making recommendations for curtailments this fiscal year.

The Department of Education, which accounts for nearly 40 percent of the state’s General Fund expenditures, is responsible for recommending to the Governor $54,793,297 in curtailments for the current fiscal year. These reductions will cut deeply and because nearly all Department funding is General Purpose Aid (GPA) to Education, that is where most of these curtailments will have to be made. I must submit recommendations to the Governor by Thursday, November 13.

An Executive Order is expected from the Governor soon after November 13 with the final curtailments. Once that Executive Order is made, I will inform you as quickly as possible of the details. The Legislature may subsequently take action of its own to make changes to the curtailment through a supplemental budget.

These are extremely difficult economic times with very difficult choices for us in the days ahead. As I indicated recently, we are facing the probability of flat-funding, at best, for the next two-year budget, beginning July 1, 2009. It is possible that new revenue projections from the emergency meeting of the Revenue Forecasting Committee on November 21 will also be lowered, resulting in further impacts to GPA in the next two year budget. If you have questions or specific recommendations, please contact Jim Rier, 624-6790 or Jim.Rier@Maine.gov .