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July 28, 2010 | last updated December 1, 2011 7:33 am

Budget shortfall could exceed $1B

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.

Go to the article from MaineToday Media >>

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