Legislators learned Tuesday the state's shortfall for the next two-year budget could be more than $1 billion.
Grant Pennoyer, director of the Office of Fiscal and Program Review, told members of the Legislature's appropriations committee that the Department of Health and Human Services will need about $500 million to fund its services, which added to the estimated $800 million budget shortfall could top $1 billion in the 2012-2013 budget cycle, though he declined to give an exact figure, according to MaineToday Media. The shortfall was attributed to the cost of inflation, the end of one-time federal stimulus funds and an anticipated additional $287 million needed to keep the state's pension plan in the black. The shortfall looms despite a nearly 2% increase in state revenues this year compared with 2009; earlier this month, Gov. John Baldacci said the state ended the fiscal year with a $70.4 million surplus.
The state is facing a $100 million shortfall for the current budget year as Congress delays extending additional Medicaid payments, and state agencies have been directed to identify ways to cut spending.
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