The Legislature began its current session on Jan. 6 and the overwhelming concern is the current budget hole. The centerpiece is the supplemental budget that the governor proposed to cut another $438 million from the $5.8 billion total budget that took effect in July. The current tax projections over the summer and fall have come in well below projections. The recession has hit Maine very hard indeed but this comes as no surprise to those out of work or struggling. It has finally come home to Augusta and the realization that this shortfall is nothing compared to what we will face next year.
|
|
Cutting $438 million will present a monumental challenge. But one thing is clear: the next budget will require real structural changes that are sadly missing from the Governor’s current band-aid approach. Without meaningful and permanent changes in the way the state spends for the fiscal years of 2012 and 2013 the next Legislature will face a virtually impossible task.
In the halls and committee room in Augusta both parties now openly speak of falling off the cliff next session. In fact, in an hour and a half before the Appropriations Committee last week, I heard the phrase uttered 22 times. Consider that early estimates assume a greater revenue loss of $300 million from the already historic losses.
Consider also that the state retirement system for teachers and state workers will require a General Fund expenditure of $900 million to $1 billion to cover investment losses and its unfunded obligations. The pension system is being appropriated $436 million in the current budget to carve its unfunded liability. In the next budget the state will constitutionally be obligated to increase funds to the requirement system by at least $500 million. (Overall Maine is $13 billion in debt including $3.5 billion owed to the pension plan. There is also a $5 billion unfunded liability for the retiree health insurance program.)
But the biggest problem of all in the next budget will be the end of stimulus money covering nearly $800 million of the current budget, most of which went to MaineCare, public education, preserving government jobs and maintaining the funding for Medicaid. With no future stimulus funding the current budget would have required deeper cuts that the next budget will. The other problem that stimulus funds brought was that no current eligibility changes could be made. There are literally hundreds of millions of dollars we could not save by making structural changes because the stimulus tied our hands. So the bad news is the next budget hole will be bigger but we will be able to finally make some eligibility changes especially in relation to welfare spending.
I know this is not happy news, but it is honest, the road ahead is not going to be easy the spending spree in Augusta for the last decade plus has placed us in a very hard spot indeed.
How about if the state Lance isnt going to live up to their obligations of funding mandates then municipalities and schools are thus not required to implement them? By the way this is not a recession its a full blown depression. The state should be seriously looking at furlough days for employees etc. Why does education always get hit the hardest? We also need to revamp the EPS formula, its plain wrong right now and has been circa 2004. Now I hear of possible school closures, when is the state going to think holistically instead of departmentally? Many of us are very very angry about the situation. I know bad things are coming, I suggest also we scale back the number of school days required then to save real money instead of the elimination of programs. Basically we have legislated ourselves into this hole. We dont have revenue because basically we do not have enough people and business to create that revenue needed, an over expansion of programs at the state level. Any word from the Mr. Baldacci’s office about suspending Dirigo? Thats should be on the chopping block as well.
Mr. Allen, I agree with you on many of your outlooks, especially the anger. The state needs to look at raising revenue, as unpopular as it seems. Cutting program is just not a viable option at this point. Cutting state employees is an option, mostly the costly department commissioners. While we’re at it, clean house at the DOT. As a former DOT employee, I can tell you that the amount of waste going on there is tremendous. I could give names but I won’t. As for raising revenue, I have several good ideas:
1. Put a $3 dollar surcharge on ski lift tickets. This will not stop anyone from going skiing at our state’s great ski mountains.
2. Triple the registration fees for snowmobiles and ATVs. Once again, the people who operate these machines will pay anything to legally ride them. Heck, quadruple the registration fees.
3. Take away the monopoly on alcohol sales and tax the heck out it. Competition and revenue, good for the free market and this won’t stop anyone from purchasing it.
4. Allow game wardens and local law enforcement to seize snowmobiles and ATVs that are being operated illegally. Then, have an auction of the seized machines quarterly and use the revenue to help fund IFW, healthy Maine Partnerships, and Environmental Education. I don’t own an ATV but I might consider getting one to use as a tool if I knew the profits would help fund one of the few state departments I really believe in.
There you go, a simple four-part plan to help our state’s economy. I should run for office.
Mark,
glad to see your throwing your former employer under the bus.
You must have a thing against snowmobiles and ATVs! Sleep well at night?
I wonder if State troopers should seize automobiles for every parking and speeding violation? Stealing from the people of Maine for their lack of judgment is not an answer. Although their lack of judgment by electing Democrats as put us in this situation.
i know math is a tough subject, so let me walk you through some numbers!
Budget short fall = $438 million
revenue from:
Snowmobiles = Resident $41, Nonresident 3-day $44; Season $89: around 100000 registered in Maine.
If all were residents that would be $4,100,000 you want to triple or quadruple these fees, i will use the quadruple numbers, which would raise it to ($4,100,000 x 4) = $16,400,000
ATVs = Resident $33, Nonresident $68: around 65,000 atvs registered in Maine.
If all were residents that would be $2,145,000. Which would raise it to ($2,145,000 x 4) = $8,580,000
Total $24,980,000 on ATVs and snowmobiles. That’s about 5.7% of the $438 million. (a lot on a small population of the state, not to mention the probable loss of tourism dollars associated with these sports)
i won’t even bother with the ski numbers, and the alcohol sales will just move more sales to New Hampshire.
This problem is very serious and i don’t think you have a full grasp on the reality of it.
Lance,
Now’s your chance: lay out the specific cuts you would make and the savings we would net. Please be certain to include the offsetting costs to businesses that lose revenue–firing teachers is bad for grocery stores. Nonetheless, if you can identify hundreds of millions in structural overspending, this is the time to show leadership.
CSO
I am getting just a wee bit tired of hearing the comments about cutting state employees. I am related to one by marriage, and I am am beginning to wonder why he hasn’t accepted one ofl the numerous offers of far more lucrative employment in the private sector in other states. With his excellent education, strong work ethic, and experience, he could easily find a less stressful and more financially rewarding job elsewhere. Fortunately, for many of us who depend on state services, he continues to share his expertise and perform way beyond his job description. He and his family have made numerous sacrifices so he could achieve his education—let’s not force them to absorb even more furloguh days so that our most talented personnel must consider the state.
CSO, we’ve already heard Lance’s plan during his last campaign: “get a one-way bus ticket out of town.” Not the best solution I suspect. (I still can’t believe he said that.)
All joking aside. Good luck Lance. I hope our legislators do indeed come together with a workable solution to the problem at hand and avoid the partisan bickering. Personally, I wish the negativity of the Websterian-republicans (who aren’t actually the majority of Republicans) and their infatuation with “Maine the nanny state” would go away.
Cutting DHHS, which Lance constantly talks about is really not the way to go. Yes, Lance, people do need to take control of their lives, but your support of slashing funding for our neediest people — most of which are the elderly and children — is counterproductive and totally contrary to a functional society.
Mainerose, I feel that your spouse is in the minority of state employees. After having been one, I can tell you that I had some very dedicated, very responsible collegues. The unfortunate thing is that the incompetent and irresponsible ones were the norm and the overwhelming majority.
Hutch, my numbers are right on. Thank you for proving it. Every couple of million helps. Like I said, the people who operate snowmobiles and atvs wouldn’t flinch at paying more. Same with skiers, especially out-of-staters. It wouldn’t hurt our tourist economy one bit. Start looking at reality.
Also, this is not a republican/democrat issue. You seem to think everything is, Hutch, proving again that you’re part of the problem. This is a politician problem. We’ve had republican leadership on the national level that got us into this mess (leadership isn’t really the appropriate term). We have partisan bickering that is promoted by the cable news, and we have behemoth corporations that are using their immense finances to control our laws so they can add to their immense finances at our expense. This country needs to wake up, turn off fatty Limbaugh and his fascist fox friends, get their butts off their couches and change. Do away with political parties (so Hutch has something else to talk about, maybe football or his favorite ballroom dancing competition) and get something done.
Mr Allen,….I think you should run for office. You will have to run as a democrat though. Only a democrat would try to just tax the hell out of everything and sit back and hope the money rolls in and all is well. What planet do you live on? “People who operate snowmobiles will pay anything to legally ride them”? Wow, great plan.Those dumb snowmobilers and skiers and beer drinkers are way too stupid to figure out somebody is trying to screw them over huh? They would never figure this out, and in doing so,go riding or skiing somewhere else, like New Hampshire, thereby depriving our state of untold millions in gas sales, food,repairs, lodging sales,rentals, etc,etc.etc. . Why didnt somebody else think of this wondrous plan years ago? As for the If&W , it would be in fine shape right now if the empty suits in the state house didnt steal the sportsmans money years ago and incorperate it in the the general fund, thereby making it easier to raid whenever some other worthless, unfunded department needed a financial bailout. If the IF&W was run by itself it would probably be the ONLY state department that was running in the black. Only dim bulb politicians could take a reasonably, well run and self funded department and screw it up. Thats why we need real conservatives in office who have the BACKBONE to stand up in front of the spendaholics in the state house and senate and say ENOUGH!!! Why is it so hard for people to realize that, as much as well intended and seamingly needed programs appear…….if we dont have the the money for them,WE DONT HAVE THE MONEY FOR THEM…..PERIOD! In real world business, if your profits lag long enough….you go out of business. State government is no different. It’s time to end the nanny state these tax and spend politicians have created .They have made a mess of things and need to be thrown out of office and replaced with real conservatives who will make the real, long lasting changes that will bring business back to this great state, and reduce the size of the government we now have.People are going to have to learn how to stand on their own to feet again, and stop holding their hand out, waiting for the state to hold it for them. The time is here, right now.
It’s time to make it less lucrative for teens to have babies out of wedlock and for the fathers of those children to escape the economic consequences of it because they don’t work. The welfare rolls are exploding with the problem and we the tax payers are footing the bill. The costs related to this problem that we the tax payers bear is prenatal health care, hospital care, pediatrician care, subsidized rental housing, food stamps, etc, etc, etc. If the parents can’t afford to care for the kids because of no employment then make them go into the military, garnish child support from their wages, and cut the free love express to life time dependency on the state’s taxpayers.
and after the state of the state address i don’t think the Governor has a full grasp on the severity of the situation.
November can’t come soon enough!
Mr. Whittier,
I never said anything about raising taxes on snowmobiles or their owners. PS I would run as a Libertarian. In all due respect we are really in tough shape and I dont have all the answers,nor do I believe the Gov or the legislature does. I do know one thing we should be borrowing money or raising taxes in this depression. We should be making shaping an economic climate that business can prosper in. We need young people to stay in Maine to raise families and prosper. How do we do that? Im sure everyone has their opinions. Each community used to be almost self sufficient the small towns that dotted western Maine had PRIVATE employment opportunities, now well nothing. We need to make it easier for businesses to come back.
That line should say “I do know one thing, we SHOULD NOT be borrowing money or raising taxes”
Mark,
Typical! This is why I love arguing with liberals, it’s as predictable as gravity!
Lets review Maine with your thoughts, Its been ruled by Democrats for over 30 years, Maine as seen no economic growth, our population is stagnant at best, we celebrate minimum wage call centers as a job creation, we have a failed school consolidation bill, a failed Dirigo health care, $3,835 per capita tax burden with a rate of 10%!!!, rank 33rd for income per capita,
yet its the fault of Republicans on the National level, freedom of speech, and FOX news.
Brilliant! I mean this train of thought is ground breaking!
By the way I am not preaching vote republican (i will never vote for snowe and collins), I preach don’t vote democrat (aka liberalism, progressive, socialist, marxist) because it’s a lie and does not work!
and Mark, please inform us, with numbers, how the rest of your 4 part plan will fill in the rest of the 94% of the budget gap!
Less DHHS+Less Government = Less Taxes. Pretty simple.
Yo Hutch, let’s stop the hate, it’s good to be angry at perceived injustice but you don’t have to be offensive. If you study history with an open mind you will find that at times a liberal course was as valid and effective as a conservative one. It just depends on how and where its applied. For instance the G.I. bill was written and passed by the democrats.A pretty good idea if you ask anyone. Im sure you can cite many succesful programs generated by intellectual conservatives.
As much as conservatives may believe to the contrary no liberal that I know likes to hand out money to people who are perfectly capable of taking care of themselves. But what do you do for the 80 year old lady a broken hip can’t afford food heat and her medications? Or the kindergarten kid whose single mom is an alcoholic who often beats him and sends him to school in the dead of winter without a jacket? (these things really happen here in Maine). I’m interested in hearing your response. And I realize you don’t want to hear any Bush bashing but it really was nearly 8 years of a Republican president and congress that took a $230 billion budget surplus and turned it into a $400 billion deficite. And it really was aTexas conservative that intiateded the repeal of the Glass–Steagall Act which essientally caused the near collapse of our economy. And I doubt the head of the banks that made such obsene profits as a result were marxists. And it wasn’t just poor leadership on behalf of Baldacci and the state’s democratic congress that has lead us to our own huge deficit, but the decressing revenues from the federal government due to Bush’s huge tax cuts as well. And tell me how those huge tax cuts for the rich have helped our economy grow. So maybe you should do a bit of research on your own before simply parroting mutimillionaire talk show host who are really laughing at you all the way to the bank. Do the research dude it will give you some credability.
Thus stated it’s not so much about blame as it is about being honest and knowing what mistakes were made that brought us to this point so, hopefully, we won’t repeat them.
I couldn’t agree more with BP. He is right we need to stop rewarding what was once shameful.
Mr Allen, sorry, my bad……my comments were in response to Hutch……the “tax the heck out of it” guy. not your comments …….btw……chopping dirigo is a good idea.
Greg,
i would start by asking you questions, how many jackets have you donated to children, or how much food have you donated to the needy children, or how many elderly ladies have you helped pay there medical bills?
I believe charity is the best way to take care of these localized needs. It is far more efficient and effective then a large government entity deciding the fate of people based on thousands of pages of eligibility requirements.
and so you can get the record straight, it was not 8 years of Republican rule on the national level!
Year, Congress, President, Senate (100), House (435),
2009, 111th, D, D – 55, D – 256,
2007, 110th, R, D – 51, D – 233,
2005, 109th, R, R – 55, R – 232,
2003, 108th, R, R – 51, R – 229,
2001, 107th, R, D -51, R – 221,
Taxes, my favorite subject, i mean my least favorite, or well lets just say i would like to change the phrase “the only thing certain in life is death and taxes.” You may not believe in trickle down economics, or even know what the Laffer curve is, and you may be one of those that runs around saying “i don’t pay taxes, i got money back!” but we should be able to agree that you know how to spend your money more wisely then government does, thus the more money back in your pocket the better, whether your rich or poor.