Restrictions Tied to Stimulus Prevent Reform

State officials have now publicly admitted that restrictions tied to federal funding will not allow them to significantly reduce spending or reform some of our most bloated social service programs. 

State lawmakers grappling with increasing budget shortfalls learned Tuesday that federal law will greatly limit what cuts they can make to Maine’s two largest agencies — Health and Human Services and Education. Combined, the two agencies make up about 80 percent of the state’s general fund budget.

“There are clearly restrictions in different areas of federal laws, both normal federal law and the Recovery Act, that will prevent, or slow us down in making substantial reductions in some of those areas,” Finance Commissioner Ryan Low said. “It is a challenge we are working through right now.”

Health and Human Services Commissioner Brenda Harvey told members of the Legislature’s Health and Human Services Committee that her agency is limited by long existing spending requirements to state programs receiving federal funds as well as by the Recovery Act.

In other words, even though we know we cannot afford what we’re about to spend, the law requires us to go into millions of dollars in debt.  The chief culprit, of course, is the so-called stimulus money Augusta took from Washington that allowed state officials to pump $300 million into programs in dire need of reform.

The truly astonishing claim is that our public officials just “learned Tuesday” about these limitations.  How can that be? Followers of this blog have known for months that this was going to be a major problem. (As I told the Augusta Insider in August, “Instead of making the tough choices, [Augusta] plugged the hole with one-time “stimulus” money from Washington which now legally prohibits us from reforming some our most out-of-control programs. So, when the money runs out at the end of next year, we have an even bigger problem to fix.”)  It’s a primary reason why some states chose not to take stimulus money.  It strains the limits of disbelief to think our own state officials were not aware of these restrictions prior to Tuesday.  This is another example of how poorly managed our state government is today.

But whether they really didn’t know or just didn’t believe this would happen is irrelevant.  We’ve known for decades that our state officials cannot properly manage the budget.  As if emptying our Rainy Day Fund, raiding our Highway Fund, borrowing from future budgets, taking money from Washington, and instituting government-worker furlough days weren’t enough evidence.  Now we’re supposed to believe that stipulations passed in the stimulus last February just crept up out of nowhere.

We deserve better.  Maine needs leadership in Augusta from someone who will hold state government accountable, not cover up the details and wait until we’re in a crisis.  We need someone who understands how an economy works, who has a background in finance, and can see these things happening before they hit.  It’s the only chance we have to preserve our economy and turn it around. I believe that only someone with my private sector experience can bring better management to Augusta.  A career politician or non-profit director can’t put our state back on track.

 

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