Third Year in a Row, Call for Fundamental Budget Reform
For the third year in a row, the Portland Press-Herald Editorial Page has offered bland praise to our legislators for how they managed the budget and then warned about the need for a fundamental shift in how things are done.
Consider. In 2008, they said a $56 million surplus was “good”, but correctly predicted a $400 million budget gap in the next two-year budget cycle. “This is a problem that’s going to take a rethinking of how Mainers get government services…,” the Press-Herald warned.
In 2009, they called a $3.3 million shortage in August “good news because it could have been much worse”, then recounted the previous month’s shortage of $14 million, as well as a total deficit of $24 million for May and June.
“Whenever they come back, legislators will be faced with fundamental questions about the kind of state government Maine needs. It won’t be enough to stick to what’s worked in the past. The times call for a different structure,” the Press-Herald advised.
And this week, the Page editorialized that closing a $310 million budget hole was, again, “good news” because, again, “it could have been much worse”, but warned, again, that the budget “does not address the underlying weakness of a Maine government that does not collect enough revenue to meet its promises to people.”
For three straight years, the Portland Press-Herald has been saying that Maine state legislators must rethink how they manage the fundamental and underlying problems that create our budget crisis year-after-year.
When will Augusta get the message?
If a $400 million budget gap is not a fiscal wake up call, it’s difficult to imagine what will motivate our current crop of elected leaders in Augusta to do the right thing and properly manage our budget.
Tough choices about what services we should provide and what we can afford need to be made. Money from Washington that prevents us from reforming our most bloated programs should be refused. The Governor’s budget should only assume to spend money collected in this state.
“This is the third September in a row in which the state has been faced with plummeting revenues,” the Press-Herald reported last year.
Without fundamental changes in our approach to budgeting and better management of state resources there will almost certainly be a fourth, fifth, and sixth until Maine’s economy becomes completely insolvent.
Thankfully, Job-Killing Bill Abandoned
Those looking to improve Maine’s punitive business climate scored a significant victory last week when legislation requiring businesses to pay for worker sick leave was essentially abandoned. It was such an awful idea the Labor Committee officially killed even a stripped down version of the bill yesterday.
The legislature isn’t helping anyone by trying to make it even more expensive to do business in Maine. On the contrary, making it more expensive will cost people their jobs – especially low-wage workers. It is particularly unconscionable to impose higher costs in the middle of a down economy when businesses and families are struggling to make ends meet.
So for now, at least some jobs will be saved by preventing the legislature from imposing additional regulations.
To encourage job growth, however, we must aggressively address Maine’s costly and complex regulatory system. It’s one of the primary reasons Maine can’t compete for good jobs.
The first step is to have a competent manager in the Blaine House who believes private sector businesses are not the enemy. They employ our people, create opportunities, and generate the revenue that pays for needed public services like education and infrastructure. Our next Governor must be someone who brings a new, positive attitude toward business formation and job growth.
We can’t continue to punish our businesses for simply locating here. Ideas like mandating sick pay are the kind of bad public policy that have driven away jobs and discourage investment. A strong manager in the Blaine House who understands how an economy works will send a strong message this kind of job-killing legislation will have no traction.
First Televised Forum
The first televised forum of the Republican gubernatorial primary will be held this Wednesday, March 24 at 7:00 pm at Westbrook Middle School.
The auditorium seats several hundred and attendance is FREE so I encourage you to come support our campaign!
If you are not in the area, the forum will be broadcast LIVE on WPME-TV and WLOB Radio (1310 AM), and webcast at http://www.wlobradio.com.
I hope to see you at this very important event.
Full details:
Wednesday, March 24
7:00 pm
Gubernatorial Debate sponsored by WLOB-AM
Westbrook Middle School Auditorium
471 Stroudwater, Westbrook
Augusta: Tax, Borrow, Spend
Fresh off the state legislature’s proposal to borrow $99 million, the Governor has submitted his own plan to sink the state further into debt. Coming in at $79 million, it’s not much of a bargain and still includes many of the same expenditures as the one authored in the State House.
If spending hundreds of millions of dollars were the key to improving our economy, Maine would be doing just fine. Of course, the opposite is true. Our state government spends an average of $200 million per year on economic development programs alone, and yet we continually face budget crisis after budget crisis and are hemorrhaging jobs every day.
The same tired mix of increasing taxes, borrowing from future budgets, and overspending must change.
A better way would be to first properly manage our state budget. It starts by making an accurate assessment of Maine’s fiscal situation. We need to audit every program, department, and agency to determine what’s working and what’s not, where we have waste and redundancy, and how we can streamline and consolidate certain government functions.
We then need tough leadership at the top to send a strong message that state government will spend only what it takes in. Maine can’t continue to depend on one-time money from Washington, raiding funds set aside for other purposes, and budgeting gimmicks like furlough days or a “payroll push” to balance the budget. It’s going to take incredible courage to face down the entrenched bureaucracy in Augusta and do what is right for the long-term prosperity of Maine. That will only come from someone who is not concerned about the next election.
At the beginning of the year, we heard members of the legislature talk about making the tough choices to improve Maine’s economy. More than halfway through the legislative session we’ve only seen more of the same: budget gimmicks, borrowing, and a rejection of nearly all the proposed spending reductions.
Maine must be better managed. Our future prosperity depends on it.
Weekly Campaign Update
My new weekly video update has been posted!
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We achieved an important step this week by gathering the required signatures to be put on the June primary ballot. Our growing army of volunteers spent the final weeks gathering 2300 signatures that were submitted to the Secretary of State. It was a great way to get out and meet voters and potential supporters. I am truly grateful for all their help.
We have a number of exciting events coming up that I hope you’ll be a part of (full details below). Tonight, I have a Meet & Greet scheduled in Sebago. On Saturday, I’ll be attending the North Yarmouth Gubernatorial Forum, and the GOP’s first broadcast debate will be held on Wednesday in Westbrook. I hope you’re able to attend or tune in.
We’re still attracting support and volunteers every day. With less than 90 days to go until the primary, your help is as important as ever. We need volunteers to staff phones, attend events, collect signatures, host meet & greets, walk door to door, and even represent our campaign at the few meetings I can’t attend myself.
Of course, I would be very appreciative if you could help our campaign financially as well. Every $25, $50, or $250 contribution puts us that much closer to bring competent management back to Augusta. There are a lot of ways to help, and it starts as soon as you contact us!
Upcoming Events:
Saturday, March 20
North Yarmouth GOP Gubernatorial Debate
Wescustogo Hall
132 Walnut Hill Rd, North Yarmouth
5:00 pm
Wednesday, March 24
Gubernatorial Debate hosted by WLOB-AM
Westbrook Middle School Auditorium
132 Walnut Hill Rd, Westbrook
7:00 pm
Saturday, March 27
Meet and Greet - Lewiston
Hosted by Peter & Beverly Laverdiere
88 Black Island Road, Lewiston
10:30 am
Charter Schools Are “Innovative”
Another attempt to bring charter schools to Maine has been prevented by Augusta. The Kennebec Journal reports this week that the Education Committee voted down a proposal that would allow the legislature to consider the addition of charter schools as part of a package to attract federal funding. Denying the potential for charter schools hurts Maine’s chances at receiving the funding.
The irony is that opponents of the measure said they preferred to opt for more “innovative” solutions within existing schools. In Maine, charter schools would be incredibly innovative. Ours is one of a small handful of states that doesn’t allow them.
The other argument put forward by opponents is that charter schools will drain funding from traditional public schools. Maine has the 7th highest cost per pupil in the country, so we have a tremendous amount of money going into our educational system. Unfortunately, most of it doesn’t end up in the classroom. Our administrative costs are extremely top heavy. Better management of those resources will reduce costs and we will have the money we need to put into the classroom.
More importantly, the primary focus of our educational system should be improving the educational experience of our young people. Representative Mary Nelson of Falmouth put it succinctly:
“To say that they have to stay in their district because they bring money to their district doesn’t seem to me to be answering what we’re supposed to be doing… and that is educating the children the best we can.”
Exactly.
We Need Better Management, Not More Debt
Just over 4 months ago, tax payers approved a bond issue worth almost $72 million to fund transportation and infrastructure projects. In the two previous elections, voters have approved about $80 million in bonds, most of it also earmarked for transportation improvements. Add to that almost $700 million in so-called federal stimulus money for “shovel ready jobs”. Maine should have raised a lot of additional money for roads.
So this week’s announcement that leaders in the majority party in Augusta would propose another $99 million bond issue for, yes, transportation and infrastructure projects has many people scratching their heads.
The central question is whether Maine can afford to keep borrowing. We already spend millions every year to service existing debt and we certainly don’t want to pursue a course that puts Maine’s credit rating at risk. We can’t borrow our way to a prosperous private sector economy, so we shouldn’t be taking on additional risk without first reducing and prioritizing spending.
The more fundamental question is how this money is being managed. We know that the bulk of the “stimulus” funds went to cover social service programs. Instead of reforming these programs to bring expenditures in line with national averages, Augusta pumped in $300 million to fill the hole without making substantive changes to the programs. We also know that the Highway Fund has been continually raided to fill past budget gaps. Again, if Augusta had better managed those funds then, we wouldn’t be trying to borrow money to patch our streets now.
This year’s annual budget crisis has been particularly painful because the downturn in the national economy has exposed Augusta’s self-inflicted fiscal wounds. Maine came up almost a billion dollars short of paying for what it spends with revenue generated in this state. That’s incredible for a state our size. The borrowing and budgeting gimmicks aren’t going to work anymore. We have to address these problems at a core level – and that means making the tough decisions about what services Maine should be providing and what we can realistically afford.
More Anti-Job Growth Legislation from Augusta
As Maine’s economy continues to lag, Augusta should be encouraging job creation by permanently reducing the cost and complexity of doing business in Maine. However, some in Augusta are again trying to make it even tougher.
Under current law, workers who are laid off but receive compensation for accrued vacation time must wait until that time expires before receiving unemployment benefits. The rule prevents people from “double dipping”, i.e. being paid for vacation and receiving unemployment benefits at the same time.
Last week, however, the House passed a bill that would permit workers to receive unemployment benefits before their accrued vacation time has been exhausted. By allowing workers to “double dip”, employers will have to bear the higher cost of unemployment benefits, which are funded through unemployment insurance. The result could be increased job loss and slower recovery of our private sector.
Maine already has one of the worst business climates in the country. It has a punitive tax structure and a regulatory system that is incredibly complex and costly. Last year, the legislature raised the sales tax and will soon attempt to make employer “sick pay” mandatory. Now, Augusta is trying a backdoor increase in unemployment insurance.
All this adds up to an even worse business climate in Maine. It sends the wrong message to employers who are already here and discourages potential investors from coming to Maine. In short, it is a job killer.
Our next Governor must bring a new, positive attitude toward business formation and job growth to Augusta. He or she must send a strong signal to the State House that this is the sort of legislation which dampens our prospects for prosperity and should be soundly rejected.